Guns and Butter
 

Many years ago in college, I was introduced in econ 101 to the concept of guns or butter. And I have recently considered the plight of our current "conservative" president.
With a deficit spiraling out of control and no end in sight, what are some of the issues that are facing the U.S. The war in Iraq, the promised rebuilding of New Orleans, the proposed tax cuts and the looming implementation of the new Medicare prescription drug program, what are the consequences of these decisions?
And all of this from a "conservative" president! Go figure.

I prefer guns over butter.

Hmmm... interesting analogy, well for now i guess guns take the cake, but butter is nice too...

i think if you shoot enough bullets you can probably make butter with guns.. i'll try sometime and get back to you.. :D


http://www.investopedia.com/images/terms/gunsbutter.gif

Or, as P.J. O'Rourke put it, "...you'll notice that, at the far reaches of gun-producing efficiency, Howitzers are being manufactured by cows."

This graph can also be used to explain the pricing of Diesel and Gasoline... :D

funny how the economy is growing at 4.5% even with the hurican and war factored in.....

unlike the shrinking economy at the end of Clintons term....

Growing Economy
 

I think it can be said that the executive branch does not have the lions share of the blame when it comes to how the economy is doing - especially in peace time.

But if you listen to Mr. Greenspan (who was around for the last democratic administration too) the spending habits of the current government could have a profound effect on not only our economy but the economy of the world. 320 billion in Iraq (for what I don't know) multiple pork barrel projects, Hurricane Katrina among other things, plus the now negative savings rates of the average US consumer could help to make the dollar crash against other foreign currencies which could do serious injury to the US economy. Not only that, but there are so many economies that depend on us to buy their consumer goods, that we would bring them down too.

Remember when a dollar bought you 1.20 Euros, well now it will buy you .8 Euros and the Yen is slowly creeping up on the dollar also.

We as a nation of consumers have got to look at our spending habits and let the politicians know that they are spending our future right now, and that there will be nothing left when I get to retire in 20 years, let alone when my kids get to retirement age.

From the washington monthly:

Productivity rose by 4.7 percent in the non-farm business sector of the economy from July to September....Real hourly compensation, which adjusts wages and other benefits for inflation, fell 1.4 percent.

This isn't really a surprise. As near as anyone can tell, productivity appears to be primarily a result of technology advances, and neither Democrats nor Republicans have very much to say about that. Compensation, on the other hand, is primarily a function of how tight the labor market is, and Republicans have long done the business community's bidding by pursuing policies that keep the labor market slack. Democrats, by contrast, generally try to pursue full employment policies.

So if productivity is skyrocketing, but labor compensation is going down, where's all that extra money going? Yes, you in the back? Bingo: it's going to the class of people who are willing to turn around and tithe a portion of it back to the GOP and its allies in election year.

Nice racket, isn't it?

well if we let the terrorists fight their crusade here on US turf like so many democrats would preffer the cost would be far higher. Some things need money spent on and conversly others do not....

Pork is one that doesn't and all politicians share the blame on that.

I will write the politicians an nice letter when I've finished my Christmas shopping and max'd my last credit card.

Hmm, maybe we are a government of the people after all...

don't forget the outsourcing rush was at its peak under clinton...not Bush....

I provide the services that allow that to happen...and it has slowed down since Bush took office...

KRUGMAN: Back in August the Census bureau released family income data for 2004. The report, which was overshadowed by Hurricane Katrina, showed a remarkable disconnect between overall economic growth and the economic fortunes of most American families.
It should have been a good year for American families: the economy grew 4.2 percent, its best performance since 1999. Yet most families actually lost economic ground. Real median household income—the income of households in the middle of the income distribution, adjusted for inflation—fell for the fifth year in a row.


KRUGMAN (12/5/05): But the main explanation for economic discontent is that it's hard to convince people that the economy is booming when they themselves have yet to see any benefits from the supposed boom. Over the last few years G.D.P. growth has been reasonably good, and corporate profits have soared. But that growth has failed to trickle down to most Americans.

KRUGMAN: The Bush administration seems genuinely puzzled that it isn't getting more credit for what it thinks is a booming economy. So let me be helpful here and explain what's going on.
I could point out that the economic numbers, especially the job numbers, aren't as good as the Bush people imagine. President Bush made an appearance in the Rose Garden to hail the latest jobs report, yet a gain of 215,000 jobs would have been considered nothing special—in fact, a bit subpar—during the Clinton years. And because the average workweek shrank a bit, the total number of hours worked actually fell last month.

REICH (continuing directly): But to have a Rose Garden ceremony when you're celebrating the fact you've got 215,000 new jobs. That's nice. But the average per-month job growth during the Clinton administration was 240,000 new jobs. And there were very few Rose Garden ceremonies just saying 240,000 new jobs. I mean, you need 150,000 new jobs just to keep up with population growth. This is nothing to celebrate.

nothing like ignoring facts and keeping to the letter of the DNC approved script.

if you are in jail and you don't have a gun,
then you would need the butter ...

and alot of it