Will Obama's stimulus plan work?

[RSS News]

The US Senate has voted in favour of Barack Obama's $787bn (£548bn) economic stimulus plan. Will it make a difference?

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[mikelepore]

Obama is trying to practice Reaganomics. As the Doonesbury cartoonist defined Reaganomics in the 1980s, it's the belief that the problem with the economy is that the rich don't have enough money.

The real problem with the economy -- and it's a contradiction that's built into capitalism and can never be reformed out of it -- is that the working class can never be paid sufficient wages to buy back its own products. Every employer can increase profits by saying no to workers who ask for raises, while also naggng them to work faster, but when all employers do this generally, then the working class as a whole can't get paid enough to buy back what it produces, or even a significant fraction of it. Employers cyclically find that they can't make profits without selling goods to those who, due to those same employers' policies, will never be able to afford to buy them. Capitalists economists call this a "crisis of overproduction" -- they explain to us that the reason we are poor is that we have produced too much. They don't mean that we have produced too much compared to what we could conceivably use. They mean we have produced too much to buy it back with our wages. Because of this permanent contradiction in the way capitalism operates, the system can never be stable. It must always swing to extremes in the boom-and-bust cycle. Capitalism severely malfunctions by its inherent nature.

[deLarge]

Dude no for realz? I thought Obama wanted it.

A little off-topic, but are you a left-hand-path-er?

[Schrödinger's Cat]

It's a troll account. Just ignore it until the administrators come online.


The stimulus will in all likelihood perform its function: (temporary) relief to the recessionary period. For deficit spending to be a "success" the new money introduced into the economy must result in more total wealth than what we receive back in inflation. For example, if transportation improvements allow for less clutter, efficiency goes up. Or, if new construction jobs are created, this pulls the strings on a region's demand. I'm relieved to see that Obama and the Congress has not put too much money into the military - war machines bring little to not wealth at all. I think the stimulus, with all its pork included, will indeed help the economy.

(Not that I disagree with Mike's post)

[Qayin]

I think its going to fail,just as the others did.

[Schrödinger's Cat]

I think its going to fail,just as the others did.

? This is the first stimulus bill/law. The other legislations were emergency bills.

[Kassad]

I've yet to really decide whether Barack Obama is completely and totally incompetent or if the leash that the corporate elite have on him is obstructing the blood flow into his brain. Either way, it's laughable to think this will solve anything. The thing that bourgeoisie politicians continually ignore is the fact that these economic recessions are built into the system they advocate. When you create scarcity, hand in hand with overproduction, you inflate the assorted markets and chaos ensues. It has happened multiple times now.

The thing that gets me is that if we cut the military budget, even just 50%, we would have enough money to pay for universal healthcare, education, housing and proper foot, water and basic commodities for every single person in the United States. No exception. For everyone.

Recessions, depressions, poverty and militarism are inherent traits in the capitalist system and no bourgeosie politician is going so solve it by passing out tiny little checks to the people, which I guarantee you will do nothing more than concentrate wealth deeper in the hands of the elite, just as the original bailout did. Executives will continue to profit of workers misery.

[R_P_A_S]

I must admit, this is an issue I understand very little. =( I hope that by reading other members replies I can manage to "get it"

[kiki75]

I've yet to really decide whether Barack Obama is completely and totally incompetent or if the leash that the corporate elite have on him is obstructing the blood flow into his brain. Either way, it's laughable to think this will solve anything. The thing that bourgeoisie politicians continually ignore is the fact that these economic recessions are built into the system they advocate. When you create scarcity, hand in hand with overproduction, you inflate the assorted markets and chaos ensues. It has happened multiple times now.

The thing that gets me is that if we cut the military budget, even just 50%, we would have enough money to pay for universal healthcare, education, housing and proper foot, water and basic commodities for every single person in the United States. No exception. For everyone.

Recessions, depressions, poverty and militarism are inherent traits in the capitalist system and no bourgeosie politician is going so solve it by passing out tiny little checks to the people, which I guarantee you will do nothing more than concentrate wealth deeper in the hands of the elite, just as the original bailout did. Executives will continue to profit of workers misery.
What, exactly, makes you think he doesn't understand this?

[Niccolò Rossi]

The real problem with the economy -- and it's a contradiction that's built into capitalism and can never be reformed out of it -- is that the working class can never be paid sufficient wages to buy back its own products. Every employer can increase profits by saying no to workers who ask for raises, while also naggng them to work faster, but when all employers do this generally, then the working class as a whole can't get paid enough to buy back what it produces, or even a significant fraction of it.

On the contrary, the fundamental contradiction of capitalism is the inability to realise the entire mass of surplus value produced within it's social relations.

The fact that the working class can not buy back the entire product it produces is irrelevant, given that the bourgeoisie also purchases and consumes commodities. Even if the bourgeoisie was able to - for the sake of argument - depress wages, increase productivity, lengthen the working day, all this would mean is that a bigger surplus would be accrued by the capitalist, allowing him to buy a greater value of commodities, realising the (greater quantity) of surplus value that the working class alone could not.

The reality is however, it would absolutely impossible for the bourgeoisie to spend the entire value of the surplus appropriated from the workers, that is, the income of the capitalist on goods for consumption. The anarchy of the capitalist market imposes upon the individual capitalist the need to reinvest a portion of this income or surplus value in order to expand production and remain competitive.


Employers cyclically find that they can't make profits without selling goods to those who, due to those same employers' policies, will never be able to afford to buy them.

Again, on the contrary, crises of overproduction are not cyclic and temporary. The crisis of overproduction is the permanent crisis of capitalism, unable to find outlets for the realisation of the surplus-value produced within the social relations of capitalism, capitalism has become a decadent mode of production, providing for humanity only increasingly barbaric war, waste and crisis.


Capitalists economists call this a "crisis of overproduction" -- they explain to us that the reason we are poor is that we have produced too much. They don't mean that we have produced too much compared to what we could conceivably use. They mean we have produced too much to buy it back with our wages.

This fact, that the fundamental crisis of capitalism is the crisis of overproduction distinguishes it from all prior modes of production and points to the necessity of communism for any hope of progress for the working class and humanity as a whole.

[Lynx]

No income? No job? No assets? No Problem! There's an example of a stimulus that didn't work.

[MMIKEYJ]

Gov't deficit spending can not help the economy at all..

And Wealth Of Nations is a douche.

[benhur]

Employers cyclically find that they can't make profits without selling goods to those who, due to those same employers' policies, will never be able to afford to buy them.

But even if they can't buy them, the workers are still creating wealth for the capitalists. So even without selling, wouldn't capitalists still have the wealth created by their workers?

[deak]

Employers cyclically find that they can't make profits without selling goods to those who, due to those same employers' policies, will never be able to afford to buy them.

I think you guys are forgetting a major thing: the US economy isn't failing because we are over producing and the people can't buy products, because that could only be the case if the US were producing goods. The US makes hardly anything. Instead we import all of our goods from other countries where labor is cheap because there are no labor laws. The US is converting to a service based economy that relies on imports and expanding forign control (as in setting up puppet governments to keep this control) to make up for this. Our biggest employer is no longer factories or actual industry, but WalMart.

When agrobuisness has destroyed our farming industry, Walmarts and the car industry and other such buisnesses that rely on cheap sweat labor have destroyed our manufacturing industry, where will all the jobs be? We can't have a country full of only retail workers, chefs, and psychiatrists and hope to have a country.

Couple this with unregulated robber-barons ripping of the populace, billions of debt, multiple wars draining out country's resources, and you've got the recipe for collapse. I don't think it has anything to do with "crisis of overproduction".

[Schrödinger's Cat]

Gov't deficit spending can not help the economy at all.. Incorrect. So long as the wealth which derives from the stimulus is greater than the total inflation, it works.

[MMIKEYJ]

Incorrect. So long as the wealth which derives from the stimulus is greater than the total inflation, it works.

but that cannot happen.. Its like expecting a perpetual motion machine to work.

With the latest stimulus, everybody benefits about $1,000.. But everybody also incurs a debt of $4,700. So its putting everybody deeper into the hole.

Everybody automatically loses $3,700.

[Yazman]

but that cannot happen.. Its like expecting a perpetual motion machine to work.

With the latest stimulus, everybody benefits about $1,000.. But everybody also incurs a debt of $4,700. So its putting everybody deeper into the hole.

Everybody automatically loses $3,700.

Thus requiring much larger spending and 'bailout' type action in the future.

[mikelepore]

But even if they can't buy them, the workers are still creating wealth for the capitalists. So even without selling, wouldn't capitalists still have the wealth created by their workers?

To dispose of the surplus by cutting back the rate of production that they can't sell, they lay off workers. But then because of the layoffs the buying power of the population is less, so sales go down further, so they have to layoff more, which makes the buying power of the population less, so sales go down some more, they have to layoff more.

At other times it may spirals upward instead of downward. The more goods people buy, the more jobs this creates, so people buy more goods, which creates still more jobs.

The politicians are now betting that their recent actions will switch the downward spiral to an upward spiral. But the timing is wrong. They're hoping for a new surge of "consumer confidence" that will get people to buy more goods, but it's a time when more people see that they must reduce spending due to record levels of credit card debt, mortgage foreclosures, etc.

[Rjevan]

I think it will only defer the inevitable.

http://94.100.113.48/457000001-457050000/457007401-457007500/457007484_6_hGr7.jpeg

[Qayin]

Japan tried this shit and tried with 6 packages and they didnt work in the past.