>>WAR: I brought up Bastiat because his "Broken Window Fallacy" has been used to argue against the notion of "War being good for the economy"
http://en.wikipedia.org/wiki/Parable_of ... ken_window
That is of course right, but means another scale of war. The war in Iraq is rather a "conflict", the US doesn't have stretch to fight it.
And just to make it clear: by no means i support the Iraq war, but i simply don't think it hurt the US too much economically (in opposite of the Iraq).
>>You follow up (on Obama's perceived program) by stating that social policies strengthen an economy. Personally I think that is a 'fault' in your argument because it is difficult to back-up (as is
any direct cause-and-effect situation). I think a better argument would be: "It's a shame that such a wealth nation, which thinks of itself as the 'land of opportunity', does have not have policies to help insure that dream". That's hard to argue with, other than "Screw the needy". I think that well balanced social programs do strengthen an economy in the long term, but it is very hard to prove and everyone will have a different perception of what well balanced means.
Actually i made both arguments.

Germany has a real social economy where the US won't come too close in expectable time, but every step in that direction counts. But Germany had the chance to recreate their economy more or less "from scratch" with support (Marshall plan) and great economists (especially Erhardt). That's not comparable to the US, change has to be slow and can be undone by a future government. Inside this limit, Obama works very well.
>>You also contradict yourself in your arguments: you use the notion that increasing the "velocity of money" when given to the poor helps the economy and turn around and say "Shameful jobs" don't increase the GDP. Increasing the velocity of money is always good for an economy and these bad jobs move money faster. And the GDP is simply one of many metrics used to measure the economic health of a nation (I probably should have used the Big Mac index instead).
You got a point there, at least it keeps people busy. But it's not a job where you can sleep well if your corporation has bad times.
>>SHAMEFUL JOBS: If you argued that "It's shameful for people to have to work for misery wages." I might agree with you, but the notion that any honest job is shameful?? Never. And who judges? Why is packing groceries more shameful than: serving food, drinks, sweeping floors, picking up garbage, being an investment banker, an actor, an astronaut, etc, etc. I think opening doors and greeting people with a smile has a bigger impact on society than some post-doc student researching the "influence of chamber music in 16th century literature". Research of this nature is fine, but it impacts virtually nobody.
I don't value those low jobs by the brain usage and i'd never deny that being paid for simply being friendly isn't a good thing in general. Maybe i'm not used enough to friendly people to value that (i'm from germany after all). But the US have an overweight of those service jobs and that is very unstable. Bluntly said, americans serve each other.
Of course this is the result of over production and this will happen to each industrial state sooner or later. The "other option" would be, that people work far less and this way share evenly the production/research of everything they need. This won't work because of global competition ofc.
>>Back to grocery stores: These people also help the elderly get food they can't reach and help them take their food to their cars, which helps these people live independent lives. Most stores will let people phone in orders and have the food delivered by these people. As I mentioned before, the consumer pays slighter higher price for it...they can vote for or against the system by choosing where they shop.
That is business economics: for a single corporation, this pays out. But in national economy, this has no impact, it only shifts customers from one corporation to another, until all corporations have such service people (sparing those firms who can't afford this, they might die out or shrink further, so this basically raises the level you need to start a business). Nationwide, this doesn't sell a single pack of butter more or less.
Elderly people get food as well in other countries (i know since i work at "mobile nursery" and this is part of what we offer) - (partly) payed by the social system btw...
>>As for corporations, if they didn't think that providing this extra service increased their profit, these jobs probably wouldn't exist. Personally I enjoy going to a cafe and being served. It isn't necessary by your reasoning, I could just a easily go order and pay for myself, but the two experience are different.
It increases their profit, but not the nations wealth. You could say that the corporation shares parts of their wealth with normal people, but they could also raise the prices to cover this.
>>NATIONAL DEBT: The notion that national debt is merely numbers on a spreadsheet is dangerous. Virtually everyone knows that an individual attempting to “float” debts (has you have suggested for nations) is driving towards a brick wall and accelerating, given that interest grows at an exponential rate. The only difference is that nations have deeper pockets so it takes a lot longer to hit the wall…but they will be going much faster. If national debt is
hand waving magic , why did Canada go through such efforts to get theirs under control? In an idealized situation, where a country is incurring new debt merely to cover the interest of some old debt and not make payments to reduce that original debt, it will reach the point where the entire economy is working to secure loans. Of course that can’t happen because it is beyond the wall.
National debt is no problem if a country produces or researches valueable goods. In bad times, they can "simply" sell out. In this regard, production is more valueable then service, though.
There are countries in the third world close to this wall - but eventually, their debts are withdrawn. Of course this won't work for a much richer state, even Iceland will get problems.
And just in case this isn't clear: i enjoy this discussion and hope i don't shock too much people, but the world isn't a friendly place either. Wars happen and i surely don't support this, actually i'm happy that i work in a job where i sell goods i can sleep well about.
Despite all economic theory and as we could clearly see in the bank crisis, our capitalism is an artifical construct which only works in times of growth, when people trust each other. To maintain this growth, it is essential to destroy/throw away fully functional stuff, so that new stuff can be bought. So "hand waving magic" is as important as solid growth.