The Instigator
RoyLatham
Pro (for)
Winning
64 Points
The Contender
rengstrom6147
Con (against)
Losing
23 Points

Obama has botched the recovery

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Post Voting Period
The voting period for this debate has ended.
after 20 votes the winner is...
RoyLatham
Voting Style: Open Point System: 7 Point
Started: 9/6/2010 Category: Politics
Updated: 4 years ago Status: Post Voting Period
Viewed: 9,655 times Debate No: 13084
Debate Rounds (3)
Comments (94)
Votes (20)

 

RoyLatham

Pro

The full resolution is, "President Obama and the Democrats in Congress could have adopted different laws and policies to lead the United States into a more effective economic recovery."

This challenge is intended for an experienced debater; please do not accept the challenge if you are new to debating. This is a difficult resolution because it covers so much ground.

I contend:

1. The economic stimulus package was a failure. According to Obama Adviser Christina Romer, if it were passed unemployment would not exceed 8%, and by now it would be reduced to 7%. http://thehill.com... Unemployment went over 10% and is now around 9.5%. It was supposed to build transportation infrastructure, but only 3.3% of it was spent on that. Most of the money went to bailing out states whose rampant spending, much of it going to employing overpaid government workers whose unions support Democrats.

Some the stimulus money had an effect. It's impossible to spend that much money without having some effect. For example, there were tax cuts early in the program that probably had a positive effect. But by the governments own accounting, on recovery.gov, only about 600,000 jobs were created. That's pathetic.

The greatest incompetence is shown by nearly half the stimulus money being unspent. If there is going to be any stimulus, the money has to get into circulation, and they haven't done that. If there was going to be a government stimulus, it should have gone entirely into tax cuts and outright grants. That could have gotten the money into the economy in six or eight months.

2. The main reason the economy is not recovering on its own is that new legislation and executive policies have so frightened investors and the public that they are afraid to put money into the economy.

a. The health care legislation has $500 billion in new taxes, $500 billion in Medicare cuts, and has done nothing whatsoever to reduce medical costs. http://www.cbsnews.com... In fact, increasing the demand for medical care by 40 million more insured without increasing the supply of medical professionals is certain to make medical costs soar. Just how much remains uncertain, as Nancy Pelosi promised, "We have to pass it to see what is in it." For example, it recently surfaced that the health care legislation has requirement for all businesses to report all expenditures of over $600 to the government. The paperwork involved is enormously damaging to small business. No one knows what else awaits, so people will not hire of expand.

b. The so-called "financial reform" bill is similarly laden with costs and uncertainties. Virtually every financial institution must now have affirmative action offices and race-based loan quotas, totally nonproductive cost paying tribute to political correctness. http://www.nypost.com... New rules will dry up credit for many people. The full impact will not be known until vast bureaucracies are installed to impose new rules, now unknown. http://www.finchannel.com...

c. Energy policy threatens has brought substantial increases in energy costs with much more promised. http://www.cbsnews.com... Obama started with a moratorium on offshore drilling to cost about 100,000 jobs and requires increases in oil imports with associated balance-of-trade deficits. http://www.rawstory.com... The Administration succeeded in getting carbon dioxide, necessary for life on earth, classified as a pollutant. The alternative energy that Obama likes is about four times as expensive, so manufacturing will be forced offshore and consumers and businesses will be forced to spend money subsidizing windmills rather than productive ventures. Exactly what will happen is unknown, but the threat paralyzes investment. No one can plan on building a new manufacturing while there is factor of four uncertainty in energy costs.

d. The Obama Administration is bought and paid for by labor unions. The Stimulus required that union wages be paid by localities, doubling the labor costs of carrying out projects. The Administration wants "card check," under which Vinnie from the union can put his arm around you and suggest that you sign here to get a union. So far the legislation has failed, but the threat remains. Beyond that, the Administration has floated the idea card check can be imposed by the National Labor Relations Board without new legislation. http://www.workforce.com... Obama as put a union lawyer in charge of the NLRB, raising the chances of that happening. Faced with the threat of doubled labor costs, businesses are hesitant to expand.

There is good evidence that both consumers and businesses are paralyzed by fear of the Administration's radical policies. Businesses have $2 trillion that they could invest but are unwilling. Since there is so little hope for economic growth, large companies are looking at acquisitions to increase sales rather than investing in new capacity.

4. Obama and his fellow Democrats are not shy about favoring taxes on the rich. The rich, of course, are he people who create jobs. The Democrats plan to continue the Bush tax cuts in the lower brackets, but let taxes increase on the higher brackets. Much of the new taxes will come out of small business, with serious effects. http://www.portfolio.com... Most of the expansion of small business comes from plowing profits back into business. The government taking the profits ensures that won't happen.

5. What should have been done to spur economic recovery is to remove the fears that are preventing investment. The government should have:

a. Adopted health care legislation that would have lowered costs by tightening qualifications of Medicare suppliers to reduce fraud, enacting tort reform, making insurers compete across state lines, and funding increased training for medical professionals. The rest should have been postponed.

b. Adopting clear measures to increase energy supplies through increased drilling and building nuclear plants. Recycling nuclear fuel should be made legal. Subsidies of uneconomic wind and solar power production should be dropped. The threat of energy taxes should be renounced.

c. Bailouts to states should be authorized only subject to states adopting austerity measures including dramatic cuts in union retirement benefits and requirements to vend out state services. State who don't want or need bailouts need not accept them, and thereby escape. Big spending states in trouble must reform to qualify, and they would be required to repay the bailouts after they have reformed.

d. Financial reform efforts should be focused on the real problems of reforming Fannie and Freddie. That would restore confidence in the economy. The extra expenses required for political posturing should be eliminated.

e. The government should adopt policies of reducing the regulatory burdens on business. A business ended up paying $100K because the mirrors in its restroom were two inches too high. That violates the Americans with Disabilities Act. That kind of ridiculous regulation from the ADA, OSHA, the EPA, and other agencies should be ended. A policy of reform would provide hope to the economy.

What is really holding the economy back is not a lack of stimulus, it is fear of a future in which investment is pointless because there is little hope of surviving. The cure is to remove the threats of increased costs for health care, energy, labor, regulatory compliance, and taxes.

The resolution is affirmed.
rengstrom6147

Con

1. The economic stimulus package was not a failure. Yes, indeed the Obama administration did say that if the stimulus package was passed that the unemployment rate would not surpass 8%, and obviously it was wrong. However, the only thing that proves is that the administration and the American public in general underestimated how bad the economic crisis was. Furthermore, the stated goal of the American Recovery and Investment Act was to stimulate the economy, not fund transportation projects. And no, the majority of the stimulus did not go to state governments, indeed when the stimulus is broken down on recovery.gov we see that sizeable amounts of the stimulus went to tax breaks for everyone, contracts, loans, grants, and spending on entitlements. However, we do know that some of the money did indeed go to state governments, which is good for the economy.
When state governments face budget deficits, the only option they have is to balance it, which usually means massive cuts in spending which ultimately translates into more people being laid off. If the stimulus money had not gone to the state governments, many more people would have been looking for a job than are now.
The governments website recovery.gov now states that the stimulus has created approximately 750,000 jobs. However, according to the CBO, when you look at the effect of the stimulus on the broader economy it increased the number of people employed by somewhere between 1.4 and 3.3 million, lowering the unemployment rate by somewhere between .7 and 1.8 percentage points, and lastly raising GDP by somewhere between 1.7 and 4.5%.
http://voices.washingtonpost.com...
Indeed, the methods that you propose to save the economy, tax cuts and grants, are far inferior in aiding the economy in downturns as opposed to increasing government activity. The reason being that when you hand someone a check many people will save some of it or pay off previous debts, both of which help the economy very little. By giving someone a job, you a creating a source of income for them which then in turn go towards buying necessities as well as saving and paying off previous debts.
The problem with the stimulus was not the stimulus itself, it was more our collective misunderstanding of how bad the economy truly was. If we had known things were going to get this bad in the job market it would have been more appropriate to make the stimulus package even bigger to replace the missing demand within the economy.
2. You offer no reason for us to believe that businesses aren't investing because they are nervous. The real reason businesses are not investing is because there is no demand in the economy.
a. Yes, it is true that the new Healthcare plan does have tax increases and spending cuts in order to remain hopefully deficit neutral. However, what you fail to mention is that these tax hikes and spending decreases happen over a period of ten years, and therefore have 1/10th the annual affect on the economy as you say they do. I'm not here to debate with you how the new healthcare bill will affect health care in the country, rather I'm here to debate how this particular bill will affect the economy.
According to a Harvard study 60% of bankruptcies are caused by health problems.
http://www.consumeraffairs.com...
If we can increase the amount of people that are insured (which this bill does according to your source) then we already have a huge economic benefit right there, a nearly 60% reduction in bankruptcies.
Furthermore, your argument about health care getting more expensive does not make sense. With an increase in demand for health care services the market will work its magic and provide more doctors. Ie. When people hear doctors are needed they will train to be doctors because of the guaranteed job.
As for the required 1099 form for every transaction over $600, its hard to tell exactly whether or not this will be a plus or a minus for the business community. This article:
http://money.cnn.com...
states how the 600 dollar rule will be a pain for businesses, but also argues that this could be good for business particularly because: it provides a brightline for 1099 forms. No longer to businesses have to go over every transaction to see if it needs a 1099, its simpler over $600 and it needs one.
b. I will say, that I'm not here to defend every policy that has come out of the Obama and Democratic Congress, just to prove that overall their decisions have been good for the economy. The affirmative action provision is not good for the economy, but the affirmative action provisions have been in law for over 30 years now. Businesses are used to them and have been dealing with them. This is not a new obstacle to business and will have little or no effect on business.
Secondly, the Financial Reform bill is widely seen to have made Wall Street happy
http://politics.usnews.com...
Overall, the bill did not go nearly as far as it could have, and many pundits have described Wall St as breathing a sigh of relief.
c. I'm not really interested in talking about the Cap and Trade bill. The resolution states that Obama and the Democratic Congress could have adopted, which clearly means that we are only discussing the policies that have been adopted. Which doesn't include Cap and Trade. Secondly, I want to point out that you obviously misread your own source. The source states that the
"The impact of the Gulf of Mexico oil spill was thrown into sharp relief Tuesday, as US data showed rising unemployment in Louisiana and experts warned the disaster could cost up to 100,000 jobs."
It does say at the end of the article that Obama's moratorium could end up costing more jobs, but that seems unlikely as your article points out that only 33 rigs have been put out of commission affecting maybe 12,000 people all of whom are being paid by BP for lost wages.
d. This last section is a joke. Even if this happened, businesses would just increase the price of whatever they make and pass the cost onto the consumer, theres no evidence that businesses are up late at night worrying about the possibility of a dramatic expansion of unions, particularly at a time when only 7% of private employees are members of unions.
4. The increase in taxes would increase taxes on individual not corporations. The rich do not give jobs to the people, businesses do. In fact the rich do not do much for the economy, much of the money that they make does not flow back into the economy.
Indeed I will also point out that this has not been decided yet, and democrats and Obama have differing opinions.
5. The real problem with our economy is not that businesses are shaking in their boots because of the news laws and how they are unsure as to the specific regulations that will be applied to them. The simple fact is that if businesses receive increased costs in the future they will simply pass those costs on to consumers. Businesses are not hiring and investing because there is no demand in the economy.
http://247wallst.com...
As the graph on the website I've attached a link to above notes, consumer spending is down by 1/3 since 2008. This is the fundamental problem in our economy. If people are not purchasing things, businesses have no incentive to create a new factory that will build products. When consumer spending increases, so will business investment.
The other things you have proposed will do nothing to help the economy if consumer spending (demand) does not increase within our economy. This is exactly what Obama sought to do with the stimulus plan, along with fixing some of the problems within our economy such as fixing the financial markets and fixing
Debate Round No. 1
RoyLatham

Pro

I'm glad Con stepped up and took the debate challenge. The issues we are discussing are important, especially with elections coming up.

We know the Obama recovery policies have failed because the U.S. is sorely lagging other nations:

"According to the Trading Economics website, which collected unemployment data for 31 countries from January 2009 to June 2009, America's unemployment spike was worse than 26 of the other nations studied. Eight saw unemployment go down. On average, unemployment increased by 0.8 percent, less than half of the U.S. rise. ... It takes some serious political gymnastics to avoid the conclusion that Mr. Obama's stimulus made unemployment worse and will continue to do so. While unemployment rates in much of the rest of the world are falling, American joblessness continues upward." http://tinyurl.com...

1. One reason that the economic stimulus package was a failure was that it did not put money into the economy fast enough to provide stimulus. We are 19 months into the program and between 40 and 50 percent of the money has not been spent. The only part that made it into the economy quickly were the short term tax cuts. That was the part inspired by Republicans, and indeed that money did some good. But that quickly ended. The failure of the bill is due to it's failure to provide the quick shot that the economy needed.

Why did the Obama financial team fail to assess the depth of the recession? All the numbers were available when they proposed the Stimulus. They simply did not understand what was going on. That is part of the reason they botched the recovery.

President Obama promised that the recovery.gov numbers on job creation would be accurate. Only after they fell short was CBO tasked to come up with creative new measures of job creation. The Government Accountability Office (GAO) assessed jobs created by the Department of Energy under the Stimulus and found that each job cost a whopping $194,213. http://www.ktvz.com...

2. Con said I did not offer a reason to believe that businesses are not investing because they are nervous. the reason I gave, in (2) was that there is $2 trillion in potential investment money sitting on the sidelines.

The situation is well understood by professional economists:

""... according to a new survey, which represents the consensus of a panel of 242 members of the National Association for Business Economics. ... Three-quarters of survey respondents said that President Barack Obama's administration and Congress should do more to support job creation. The best way to do that, according to 41 percent of the survey respondents, is for government to give clarity on future regulation and tax policy." http://tinyurl.com...

The Wall Street Journal summarizes:

"What's missing in these times is a strong desire among businesses and consumers to take on new debt, low rates notwithstanding. Corporations can't even decide what to do with all the surpluses their businesses are generating; they are sitting on vast amounts of cash even though it is earning them minimal investment returns. ... The key word here is "uncertainty." The Obama administration and Congress have dumped a huge load of highly dubious new legislation on Americans, much of it unread even by the legislators who voted for it. ObamaCare is an attempted federal takeover of a vast and complex industry. No one really knows how much chaos the financial sector "reform" act will generate. Hyperactive zealots in federal bureaucracies such as the Environmental Protection Agency have been unleashed to do silly things like attempt to reduce the planet's supply of carbon dioxide." http://tinyurl.com...

The articles goes on to quote the chairman of the Dallas Federal Reserve, "The prevailing sentiment among business leaders he surveys monthly, Mr. Fisher said, is that 'the politicians and officials who craft and enforce the rules are doing so in a capricious manner that makes long-term planning difficult, if not impossible. They are increasingly distressed by the lack of consistent direction coming from Washington. . . . So they are calling time-outs and heading for the sidelines while they wait for the referees to settle the rules of the game.' "

a. Con argues that increased taxes and health care costs are spread over ten years. Insurance premiums are already increasing dramatically to pay for the coverage of children under 26 under parents policies and the onerous new reporting of purchases has hit. Small taxes like the tax on the tanning salons has hit. CBO predicts that health care premiums will continue to rise, and the cut n Medicare is well-publicized. Fears are legitimate, and that it will b years to discover just how bad it will get makes the situation worse.

Con says that avoid bankruptcies due to health care costs will help the economy. It may help individuals, but the medical costs involved in the bankruptcies will not decrease; they will increase due to increased demand on the system. In the past, the medical costs unpaid were spread as hospital overhead among those paying insurance premiums; in the future they will be directly charged.

For some businesses, the 1099 requirement is expected to more than triple their bookkeeping costs. Virtually every small business organization believes it will have a serious impact. http://tinyurl.com... Con says that it will simplify the process of deciding which 1099s have to be issued. Sure, and if tax laws required a person to send every dime earned to the government, that would vastly simplify the system. However, as with the 1099s, the simplification does not come close to offsetting the costs.

b. Con seems to agree that affirmative action requirements are generally burdensome, but argues that businesses are used to them. Some businesses are used to some policies, but the financial industry is not used to the new laws. The large Wall Street firms tend to like complex new regulations, because they are confident they can play the system to their advantage by coping with the new burdens as small competitors succumb.

c. Con says that he won't talk about cap and trade because it hasn't actually been passed into law. My point is that fear is paralyzing business. Promises to put coal companies out of business and to raise energy costs add to the fears that deter business from investing. The correct policy would have been for Obama to renounce cap and trade and promise to veto it if it passed.

The drilling moratorium put 23,000 people out of work directly, but drilling is key to the local economy, causing many secondary job losses. http://tinyurl.com...

d. There are substantial worries over both cap-and-trade and card check. http://tinyurl.com... "Businesses are worried that unionization via card check would lead to the abandonment of the secret ballot system - which traditionally allows companies time to make the case against unionization. ... Unsurprisingly, business advocacy groups oppose it - the National Federation of Independent Businesses, the American Small Business League and the Small Business Association of Michigan are on the record against card check." http://tinyurl.com...

4. If it were true that increased costs could always be passed on to consumers, then no business would ever fail. Costs may not be passed along if consumers do not want the product at the higher price, if larger competitors are better able to cope with regulatory burdens, or if overseas suppliers provide cheaper products or services. Business will invest during a recession if they see a return to prosperity ahead. They make investments in new equipment to lower costs and they invest in new opportunities to expand exports. Consumers won't start buying until they see good times ahead.

Obama has botched the recovery by adopting policies that caused businesses and consumers to lose hope.
rengstrom6147

Con

This debate comes down to whether you believe the economy is not recovering quickly because of a dramatic drop in consumer spending, or the fear that businesses have over an unsure policy future.

I'm going to concede that a few businesses are uncomfortable with recent policy change. However, that does not mean the recovery has been botched.

As I pointed out in the last round, to which my opponent did not respond, the problem in our economy is that spending is down by almost 1/3. As long as that is the case, the economy will not get better.
In fact I have an even more awesome graph on this website:

http://voices.washingtonpost.com...

The first graph shows businesses are concerned not about taxes, but about sales. Indeed, the website notes that concerns about taxes are lower than they were in the 90's.

Now the resolution doesn't call for me to prove to you why the economy sucks. It calls for me to prove to you Democrats have not botched the recovery. Therefore, I'm going to show you not only how my opponent is wrong about Obama's policies, but I'm also going to show you the real reason the economy has not gotten better is the Republicans in Congress.

1. My opponent claims that we can tell the Obama policies have screwed the economy because unemployment here is higher than unemployment in other places. Mind you, his data is from early 2009, a period Obama could not really have affected the economy much. But my most important response to this claim is going to be obviously unemployment would be higher here than in other places. We were the epicenter for the entire economic crash. Obviously our unemployment is going to be highest.

Then my opponent goes on to criticize the stimulus bill. The awesome part about his critique is does anyone here remember getting a check in the mail? That's because you didn't. The stimulus tax cuts cut the amount the government held from your paycheck which means the tax cuts that apparently helped the economy so much were given out in weekly or bi-weekly increments over quite a while. Which means if these tax cuts helped the economy so much and they were given out over a while, why does the government spending that happened over a while not help the economy?

The fact of the matter is over 500 bil dollars of the recovery package has been spent. And no, according to recovery.gov 1/3 of that was on contracts, grants, and loans…so no, the tax cuts aren't the only things affecting the economy.

Then my opponent states the Obama team didn't understand what was going on in the economy, to which I state what economist did? What economist predicted this whole mess happening? It's really silly to blame the Obama administration for not being able to predict the future with regards to the economy.

Then my opponent criticized the stimulus because of how much each job cost. What's interesting here is that he doesn't deny that the CBO estimates that the stimulus created between 1.4 and 3 million jobs. He merely focuses on how much each job cost, but either way the bill created jobs a fact you don't seem to by denying anymore.

Then my opponent goes on to cite a study that polled a few economists on what Obama could do to help the economy. Firstly I've presented data that polled the actual businesses, and they are not saying taxes are on their mind they are saying that sales are on their mind. Secondly, only 41% of the economist polled believed government needed to give clarity on future policy, meaning that a majority of economists do not buy into this argument.

a. My opponent goes on to say the insurance premiums are going up because insurance companies have to adjust to covering people under 26. This claim doesn't even make sense on the surface. Insurance companies love it when young people get added to their rolls. That's more that gets paid to them to cover the young person, and young people are the healthiest of any age group which means they don't go to the doctor and don't cost the insurance company very much money. And honestly, a small tax on the tanning industry is not really standing in the way of the economic recovery.

You're also missing the point on the bankruptcy problem. Fewer people going bankrupt is not just good for the individual its good for the economy. The costs that these people would have paid will now be paid by their insurance. And as I stated last time, health care costs are not going to rise because as the industry needs more doctors, the free market will solve the problem of too much demand by creating supply. Its worth noting you also were unresponsive to my argument as to how the market would solve this problem in your last post.

The 1099 regulation does not come into effect until 2012 we can have a debate about that then, but for right now common sense and my awesome numbers from above indicate it's not the problem on businesses minds.

b. Once again for the financial reform bill this requirements have been required of businesses within the financial industry, see Community Reinvestment Act.

c. If C&T comes into law, businesses might fire people, but so far they haven't and we have no evidence that they are worried about it.

As for the BP issues, I also presented the argument that while the moratorium is in effect, BP is reimbursing people for their salaries that they have lost. Meaning the 23,000 people have not lost their jobs, and neither has there been secondary job losses.

d. Your source on this particular section is even better. Nowhere in the actual article does it say businesses are worried about it, all it says is some businesses in Georgia are worried about it. How many businesses, two? The article in no way gives us any indication of how the business industry feels about this.

4. And yes, the industry can pass most costs on to consumers. Industry as a whole can, that is. If only one business passes on costs of course its going to fail. But a new tax burden that affects the entire industry will be passed onto consumers by the entire industry not giving consumers a choice to buy somewhere else.

Indeed, if anyone has been botching the recovery it has in fact been the Republicans in Congress. Republicans in Congress have called for the budget to be balanced. To quote Rachel Maddow, "Government balancing the budget is what made the depression great."

Indeed, Republicans have even gone so far as to block unemployment insurance for the long term unemployed as they did this June. Even though it's a pretty well known fact that unemployment benefits are particularly good at stimulating the economy because it puts money in the hands of people who are likely to spend it.

http://www.cbpp.org...

Indeed, what most of you don't know is that the unemployment bill in June originally started out as a jobs bill, which was intended to extend the benefits to unemployed workers, provide money to state governments so they wouldn't have to lay people off, and other provisions totaling $120 billion. Passing this bill could have helped the economy enormously. It was an attempt to fix the mistake made in 2009, which was to pass a stimulus bill that was not large enough to handle the economic problems at hand. But the GOP thinks austerity measures are more important, because they blocked the bill using the filibuster.

So if anyone is to blame for the economy not recovering its not the democrats. The new policies are not concerning businesses that much, as my data shows. The democrats have been attempting to fix the real problem with the economy, which is to address the fundamental lack of demand. While the Republicans block their efforts.
Obama has not botched the recovery, in fact if it weren't for him and the democrats in Congress we would probably be in a depression. The recovery has been botched by Republicans in Congress attempting to force austerity on a weak economy.
Debate Round No. 2
RoyLatham

Pro

1. My opponent claims, "This debate comes down to whether you believe the economy is not recovering quickly because of a dramatic drop in consumer spending, or the fear that businesses have over an unsure policy future." I disagree. All recessions have a dramatic drop in consumer spending; it is not possible to have recession without that. The question is whether the policies of the Obama Administration have done a good job of restoring consumer and business confidence so that consumers will start spending again,businesses will start investing for the future. Clearly the policies have failed to restore anyone's confidence. We know the policies have failed for some reason, because recovery in the U.S. is substantially lagging the rest of the world and businesses are sitting with $2 trillion on the sidelines waiting for a promising future.

Let's suppose that the mix of spending in the Stimulus was effective. I think that only the tax cuts had a significant effect, but let's suppose for the moment it was all effective. Then why would it be sound policy to be 19 months into the program with only about half the money spent? The point of stimulus is to inject money into the economy, so there is no possibility that not spending the money is good policy. Either the concept of the Stimulus was botched or he execution was botched, or both. The talk about "shovel-ready" projects makes one conclude that the execution was botched, because the supposed shovel-ready projects were not ready. Even a modest understanding of the government procurement cycle (specifications, solicitation, qualification of bidders, bids, evaluation, award, contracts, project plans, and reviews, all before work starts) would have precluded any foolish notion of "shovel-ready." In fact it didn't happen, and, for whatever reason, is the fault of the Administration.

Virtually all of the recovery effort was in the Stimulus. Therefore, failing to spend the allocated money is reason by itself for affirming the resolution. If it ready did create two million jobs, which I do not believe it did, then all the money should have been spent by now to create four million, and not doing so is incompetent.

Of the Stimulus money that has been spent, Con says that one-third went to tax cuts. I agree with Con that the tax cuts were effective, pretty much for the reasons that Con claimed them to be effective. Where we disagree is on the rest of the money. Not spending the money at all is, of course, ineffective, but spending it to create jobs at the rate of $194,000 per job is also inexcusable.

Con claimed I did not dispute the CBO estimates of 1.4 to 3.3 millions jobs somehow created indirectly, but I did dispute it. The original promise of the Administration was that jobs would be counted on recovery.gov and that we could rely on those numbers. About 8 million jobs have been lost in the recession, and recovery.gov says that 750,000 were created. We need to create an additional 1 million jobs per year just to keep up with population growth. Even the 750,000 is suspect, because those are unaudited estimates of recipients. The original ground rules showed the Stimulus to be ineffective, so the ground rules were changed to the CBO claims. That is reason enough to doubt the CBO estimates. However, the huge range of 1.4 to 3.3 million jobs shows they are just guessing wildly, no doubt under political pressure.

2. The Stimulus was ineffective because of half the money being unspent and two-thirds of the rest being poorly spent. However, rather than focusing on the economy as top priority, the Administration went to extremes to undermine confidence in the recovery but initiating major new and uncertain health care costs, uncertain financial regulations, threats of expanded unionization, and promises of dramatic increases in energy costs.

a. Con says it makes no sense that insurance companies have to increase their premiums to cover children under 26 now forced on to parents policies. It makes sense because it is not possible to insure more people at the same cost. People in the 18-25 age group do not have many disease-related health problems compared to older people, but they certainly have health problems. That age group is also disproportionately susceptible to accidents, drug and alcohol abuse, and gang violence. Ultimately Obama care will cover 40 million people at enormous cost. Most of that cost will be born by health insurance policy holders. For example, the $500 billion coming out of Medicare will have to be made up by the elderly who lost the benefits.

Con dismisses the cost of filing 1099 forms because the are not due until 2012. The costs start immediately because account system changes, like new software, have to make to prepare for the data collection beginning on January 1, 2011. The 1099 costs, like the tanning salon tax, provoke fear of additional surprises buried in the health care bill.

Increasing demand without increasing supply will drive up costs dramatically. Con claims that the free market will create more doctors and medical professionals. The supply is inelastic, o in the free market prices will rise sharply.. There is abut a twelve year lag due to the time it takes to train a new physician. There are serious limits on the sizes of medical school classes imposed by the lack of availability of instructors. Professionals educated overseas must still complete residency in the US, and those slots are currently at capacity.

b. the Financial Reform act poses many uncertainties, and that uncertainty hangs as a fear over businesses and consumers alike. We are already seeing increased bank fees and tightening of credit. The requirement of every financial institution to have an affirmative action office to hire minorities into the industry is rand new and unprecedented overhead.

c. Con claimed that businesses are not worried about cap and trade. How could a business that depends upon energy not worry about doubling or quadrupling energy prices? The reason the legislation stalled in Congress was the worry of representatives from the mid-West about the destruction of heavy industry. California, ahead of the curve, has dramatically increased energy prices. The result was half the heavy industry leaving the state.

The oil industry is second only to tourism in the Gulf States. It is unrealistic to suppose that BP is going to support all the lost jobs forever. If nothing else, it would drive the American subsidiary of BP into bankruptcy. The increase in foreign dependence on oil is not treated at all by BP's temporary relief.

d. The article on the fear of card check said, "Unsurprisingly, business advocacy groups oppose it - the National Federation of Independent Businesses, the American Small Business League, ..." Con erroneously claimed that there was no expression of widespread opposition to card check.

Con claims that costs of doubled salaries can be passed on to consumers. Con did not counter the reasons I gave why that is not true. If labor costs were truly of no consequence, then any country could set a minimum wage of $100 an hour and end poverty. That obviously doesn't work.

4. Most small business are Type S corporations, filing as individuals. Half the proposed tax increases would come from small business. It hasn't passed yet, but it is announced policy that has given business another reason to doubt their future.

5. I gave five ways in which the Administration could restore the confidence of business in the future of the economy. If business had confidence in the future, they would invest. Consumers would gain confidence from the improved business environment. They would believe they could stay employed. consumers could also stop worrying about skyrocketing health care costs, energy costs, and taxes. Con did not refute those claim.

Obama botched the recovery. The resolution is affirmed.
rengstrom6147

Con

1. Yes, I believe we both can agree that in any recession a drop in consumer spending occurs. However, throughout this debate you have suggested that the reason our businesses aren't hiring is because they are worried about the future of regulations. Meaning that fundamentally your arguments do not hold consumer spending as the reason the economy is not recovering, but rather they suggest that this lack of confidence is the reason our economy is not recovering. I on the other hand have been arguing that our current position is because of a lack of consumer spending not related to any kind of worry about regulations and the future of our policies.

Now, you have repeatedly argued that the stimulus is not effective for a variety of reasons whether it be because each job cost so much money, or whether because a certain amount of money has not been spent, or perhaps even because it was not more tax breaks. The fact of the matter is, is that the CBO estimates that the effect of the stimulus on the economy was the creation or savings of somewhere between 1.4 million and 3.3 million jobs, something that you have absolutely no evidence to contradict. Recovery.gov tallies the jobs created directly by the stimulus, but the CBO tallies the job numbers in the economy via the multiplier effect. (when you create one job obviously you create others because the person that just got a job then has more money to spend). And finally I suspect that you do not know much about the CBO because it is regarded as the most non-partisan information provider out there, members of both parties go to the CBO for information about legislation. Now these promises that the you say the administration is breaking, who cares. I'm not here to argue that the administration may or may not have kept their word about this or that, im here to argue that the policies put forth by the Democrats have had positive effect. So I don't really care if Obama broke any kind of promise.

Secondly, of course each job is going to cost a lot to produce, when a company builds a building they are not just billing you for the labor of their workers. You have to pay for the land, the materials to build the building, etc. So obviously each job is going to cost a lot of money.

Lastly on the stimulus your facts are wrong. Its more like 2/3 of the stimulus money has been spent. As for the tax cuts portion it was scheduled to last this long. I agree with you that the execution of the stimulus has not been perfect, many of the projects were not shovel ready. However, the administration has pumped a huge amount of money into the economy in the last 1.5 years, preventing it from going into a depression and leading to its slow recovery.

Lastly, no where did I agree with you that tax cuts are even remotely as effective as government spending. In fact my arguments were just the opposite. I explained to that because there was a strong temptation to pay back debts or save any money given to consumers in tax cuts, that any tax cut was not going to be as effective as government spending.

a. I don't think you understand your argument. My parents for example have to pay to have me on their insurance plans. Children don't get on their parents insurance plans for free, the parent and their employer both pay for the child to be covered. The problem until recently was that once someone's kid turned 22, no more insurance through their parents. The new law merely requires insurance companies to allow children to stay on their parent's insurance until they are 26, it doesn't require insurance companies to do it for free. In fact the parent and the employer will have to continue paying for the child to be on the parent's insurance, so there is no increase in cost in this field. And yes younger people are more prone to accidents, however they are the least likely to have terminal or long lasting illnesses meaning that are dramatically cheaper to cover than any other age group making insurance companies very happy to cover them.

Then Pro discuses the 1099 forms. Whats particularly interesting here is that the cool graph that I put a link to in the beginning of my last post, demonstrates clearly that issues like this are not on the minds of employers sales are. As the article itself said, "there's no reason for us to speculate as to why businesses aren't hiring, we can simply ask them." And they did, and they found that things like this are not on the minds of employers. This argument applies to ALL of the points you made about Cap and trade, about Unions, about Health Care, and the financial reform bill. And it's something that you don't address at all in your last post. YOU DID NOT PRODUCE ANY SOLID DATA THIS ENTIRE DEBATE THAT INDICATES BUSINESSES AS A WHOLE ARE WORRIED ABOUT FUTURE REGULATIONS, I DID AND YOU DID NOT RESPOND TO THIS DATA. so please apply this argument to sections b. and c. on Financial Reform and Cap and Trade respectively.
Then my opponent argues that demand for healthcare is inelastic, which is just a fancy economic term for saying that a change in price has a large affect on the demand for a particular product. The problem with that theory is that health care is a necessity, meaning that what ever the price is we have to have it. Therefore it is actually elastic. Inelastic items are usually luxury items that when the price suddenly goes up, people think twice about buying it, necessities are always elastic.

As for the BP oil spill, the moratorium is only for six months, so it will hardly drive BP bankrupt.

d. Of course the businesses advocacy groups are going to oppose it, the real point here is that as my survey of individual businesses points out, there is no data to suggest that businesses have this on their minds, in fact the data supports the opposite conclusion.

Obviously that wouldn't work to end poverty because businesses would have to raise prices substantially to support such a high minimum wage as I said they would.

4. Please apply my data that indicates businesses are not worried about this kind of stuff to this section

5. Why would the administration enact your 5 steps to restore the confidence of businesses when the only data in the round suggests businesses aren't worried about regulation and taxes they are worried about sales. What we need to be doing is enacting policies that increase demand and consumption within our economy. The stimuls simply wasn't large enough to address the problem. The democrats tried to fix this in June of 2010 with a jobs bill, however the Republicans blocked it in the Senate. Meaning that right now the Republicans are preventing this economy from entering into a sustained recovery, another point that you didn't refute in my last post.

Therefore, I'm going to give you three reasons as to why you should vote affirmative:
1. The only data to be presented in the round indicates that my opponents claims are not true, businesses are not worried about future regulation and tax increases, a key component to his case and what he was advocating. Its important to note that no where in the round does he even criticize or refute the claims of this data
2. My opponent does not refute the claim that Republicans in the Senate are blocking further programs to create jobs, measures that would very well help the economy. He didn't even contract my claim that Republicans were the fundamental reason that our economy is in the crapper right now because of their blocking of serious legislation.
3. If we take away from my opponets case all the points he argued that were based on his assumption that businesses were worried about the regulatory environment in the future, the only arguments he has left are those pertaining to the stimulus. In this section he devotes more time to pointing out Obama's previous words that he has had to go back on, and the expensiveness per job, rather than looking at the larger picture, that the Stimuls has created jobs and th
Debate Round No. 3
94 comments have been posted on this debate. Showing 11 through 20 records.
Posted by RoyLatham 4 years ago
RoyLatham
rengstrom, I question what constitutes "hard evidence." You presented data that shows that consumer demand is way down. That establishes a correlation between a recession and lack of consumer demand, but it doesn't say what causes the lack of consumer demand. Expert opinion is good evidence of the cause, and there is abundant evidence that the reason that consumers are not buying and businesses are not investing is the worrisome economic future. There is also plenty of polling data, which I cited, that there is substantial anxiety. That is reflected in the concerns expressed continually in the financial news. There is plenty of evidence that consumers are worried about the future, and well they should be. Numbers that do not establish cause and effect are not hard evidence.

Jobs create by the government are temporary, When the government money runs out, the job disappears. The only way to get permanent jobs is to restore confidence in the future. If the government set out to destroy confidence, they could do not more than raise concerns over increased taxes, soaring health care costs, soaring energy costs, and massive new regulations with heavy compliance costs. What else could they do to scare people? It hard to think of anything else.

Anyway, perhaps we can debate other topics. Perhaps he virtues, or lack thereof, of pressing the "green economy" would be a good topic. Or maybe the specifics of Obamacare. I'm glad you are willing to step up and defend the liberal side. We have had a shortage of people on the site willing to shoulder the load.
Posted by rengstrom6147 4 years ago
rengstrom6147
It was a really good debate roy, I certainly would not mind debating you in the future.
Posted by rengstrom6147 4 years ago
rengstrom6147
@Roy Ok so at the end of the debate you pretty much take the health care section of the debate because of my epicly dumb moment, but the point I was trying to make on the last post is, what does that really get you in terms of the larger debate? Your arguing that people are worried about this future increase in healthcare prices, but you have no hard data-based evidence that links this concern to the current recovery or lack thereof; whereas I present hard data that businesses aren't concerned about these kinds of things. So even if you take that portion of the debate it really means nothing unless people buy into your argument that businesses are really concerned about these things, which the data indicates is not the case.
Posted by RoyLatham 4 years ago
RoyLatham
There are at least three financial channels on cable: CNBC, Bloomberg, and Fox Business. I defy anyone to watch any one of the three for any two hour period without someone expressing worry about the impact of the health care legislation on business. Employers have no idea what their health care costs will be, and employees have no idea whether or not they will have health care coverage. Before Obamacare, 85% of the population was satisfied with their current health care. After the legislation, no one knows what it will cost, but everyone knows it will be a lot more expensive.

Where I live, in the San Francisco area, the cheapest health insurance available is way over the $8K limit that is subject to a 40% "Cadillac" tax. Most of the costs of covering 40 million more people are going to passed to existing policyholders, and as costs rise, more of those policies will be subject to the tax. I, and many others will be forced to pay the $750 penalty and just drop coverage.

The problem is compounded because not only is there nothing to increase the number of health care professionals, but many say they will retire rather than attempt to cope with government regulations. An astounding 45% of doctors said thy will retire rather than face Obamacare. http://www.investors.com... I doubt that the whole 45% will follow through, but we would be very hard hit if even 10% dropped out. I suspect that what will happen is that an expensive free market for services will develop. The government-regulated market will have long waits for limited services, while the free market will provide real services at a high price. But who knows? In Ontario, in Canada, the government responded by making it illegal to get health care on the free market.

Right now, the uncertainty is the problem.
Posted by rengstrom6147 4 years ago
rengstrom6147
Oh and by the way Mr. Mongoose, in case your wondering here's an actual example in the FIRST paragraph of the FIRST post of Roy citing in the same way that you criticize me for doing so,

1. The economic stimulus package was a failure. According to Obama Adviser Christina Romer, if it were passed unemployment would not exceed 8%, and by now it would be reduced to 7%. http://thehill.com...... Unemployment went over 10% and is now around 9.5%. It was supposed to build transportation infrastructure, but only 3.3% of it was spent on that. Most of the money went to bailing out states whose rampant spending, much of it going to employing overpaid government workers whose unions support Democrats.

Yeah...you notice that link there, all its doing is giving me a place to go that I can verify that fact he just stated in the event that I question said fact. The exact format of all my links.
Posted by Sieben 4 years ago
Sieben
If you think i am arguing for more of the status quo, you have not been paying attention at all. This should be a no brainer for you because, from our previous dealings, I am an austro-libertarian-anarchist.

"the amount of resources that have to be committed to space travel may likely cause people on Earth to starve as well."

^Ethical. You implicitly assumed that helping other people was okay, and then allowed practicality to inform you. Pragmatism is not a *value*. There is no way to ground it without having a system of ethics. Is X practical? Don't know. What are you trying to accomplish - aka what are your ethics...
Posted by rengstrom6147 4 years ago
rengstrom6147
Hi guys, thanks for pointing my ....umm little mistake :p But in any event I'm not that worried about that particular mistake. The reason that Roy brought up the Healthcare bill originally was to show that it was another example of legislation that created apprehension about the regulatory environment of the future. So, even if my little mix up compels you to agree with him on that particular section of debate, I'm not that worried.

Secondly, while I love getting intense criticism, as when I'm writing reviews on debates im very critical myself, Mr. Mongoose I think you need to open your eyes. I ran through my posts and every link I put down had the argument either right before it, as In I'd state a certain fact and just put the link down where I got that fact, or I would explain it even further as is the link to the study that provided me with the data to argue that businesses aren't truly concerned about the regulatory future. So, in conclusion Mr Mongoose, I do believe that nothing is wrong with me, but I rather wonder is wrong with you? Pehaps you need to reread the debate and pay a little more attention. The same way I cited something as in (fact fact fact link) was exactly the same way Roy used some of his internet addresses.
Posted by TheAtheistAllegiance 4 years ago
TheAtheistAllegiance
Sieben:

For one, I don't always support the status quo, and if you don't support it either, then why are you arguing for more of it?

I justify helping Americans based mainly on terms of practicality, not ethics. If people are starving on the moon, then there is little we can consistently do for them because the amount of resources that have to be committed to space travel may likely cause people on Earth to starve as well.

"Radical" and "Absolutist" weren't meant to be arguments, but rather a description of you -- from what I've seen anyway.
Posted by mongoose 4 years ago
mongoose
rengstrom6147, what is wrong with you? You completely flipped the definitions of elastic and inelastic. You need to explain your sources, not just list them. I'm not going to look through your sources and find your arguments. You have 8,000 characters. Use them.
Posted by Cody_Franklin 4 years ago
Cody_Franklin
... That may be the largest economic fail in the history of the human race. Lol.
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