Will job market dive after 'fiscal cliff' fix?
Washington's cure worse than disease?
- Duration 9:19
- Date Jan 5, 2013
Washington's cure worse than disease?
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You that's -- -- the trop because up and while alive and well VC.
-- only what we cold and lawmakers already handing out tens of billions of dollars.
For green energy.
-- -- even rum makers in the Caribbean proponents say.
This is great news for jobs but with nearly sixteen and a half.
Million dollars in debt someone here says if we don't start -- -- that that now we're only killing more jobs later so who's right.
What I read about -- -- Bulls and Bears last year.
Hi and you -- the Bulls and Bears -- week.
Gary B Smith Tobin Smith Jonas Max -- along with Gary -- and Caroline -- -- everybody okay -- okay.
The years just one week old and congress are you passing billions in new York and you say bad sign for jobs in the new year white -- Of course look at it and it never ends 430.
Million dollars a Hollywood producers so they do movies in the US vs other places.
That's crazy look when you continue to raise spending.
It ends up being a tax on the economy it keeps the head winds on the economy we're still at seven point 8%.
And if you add in the people that came out of -- the workforce so more like at eleven.
It does nothing for nobody because government is inefficient there is no profit motive and that.
The inefficiencies because a poll that just does nothing for the economy going forward.
Well -- doesn't do something it might create some jobs right in those electric motor scooters that I know him outside.
Can't move it to dodge and those -- from Hollywood though it's not just know how you look.
You can make the case in the long run bit running up the deficit doing pork spending is gonna cause a fiscal collapse and crisis that will lead to a major recession.
-- the short running jobs for -- thirteen.
But just look at the example of just brought up okay you give him a tax credit to make a movie in America.
If they made the -- being handed -- wooden -- less jobs in the US than making the move here the commercial here.
Yeah it's increasing the federal deficit but it's also good to -- jobs this year saying what building NASCAR racetracks.
That you wouldn't have built without credits from the government it's not a great policy long run but it will definitely make jobs in the short one next year.
You weren't the only guy who likes both electric motor scooters and NASCAR.
All right time for an opportunity my scooter out of those tracks OK all right Gary be I have a feeling you don't agree.
I don't -- -- look I do agree with one point the -- made no one can.
Disagree that stimulus spending creates jobs were all in agreement about that.
The real question though is is that dollar better spent by the government or if -- spent better spent by the private sector.
Look this has been studied and the multiplier essentially what does the dollar.
Create in the GDP the multiplier for government spending stimulus spending is point six force so that means every dollar you and I Brenda.
Give from the government import taxes only raises GDP 64 cents.
It says right there are no matter what you think it's -- it's great to have wind farms or are Hollywood producers getting breaks.
They attend the money is spent inefficiently it's much better spent as Gary K points out in the private sector that's why we could spend all the money we want -- stimulus it's not hurt gonna create as many jobs that you and I have spent that ourselves.
Caroline that's called basically crowding out it's an economic turn the bottom line is that the government spend the money there won't be as much in the private sector it crowding it out do you.
See this is a problem for the labor market.
Well now I think that the only way in history is proven that the only way in which we stimulate an economy when it's in a recession such as the one that -- and is through government spending and I would challenge the stats on the multiplier effect.
That has to do a lot with money going to the service sector where it has almost no effect.
Which is dragging that down but most government spending especially the recent stimulus.
Had an incredible multiplier effect in fact -- saying.
That we're talking about my point -- million jobs saved or created.
And other estimates range from one to four million.
CBO estimates so I'm glad we're all in agreement that stimulus spending does stimulate the economy in the.
Only way we -- -- agreement winning that I'm sorry is suspending the there's no agreement on that the bottom line is that when you -- government spends.
It's -- there's no profits they're not making any money out of it it comes out of the taxpayer dollar and we do we deficit spending here and guess what that had to be paid back eventually.
Yeah right -- take it but yet the stock market isn't agreeing with you Wall Street -- agree with agreeing with you had an incredible.
Week that thank god.
It was a best week for spot since December 2000 -- I don't remember that that was you know that was relief rally off for the fiscal -- -- -- -- that -- -- you -- the big story here.
Did you know -- -- -- In this particular round of a pork which is a gigantic -- about 65 billion dollars.
You realize that corporations in the United States the all the taxes they paid in 2012.
Was about a 150 billion dollars so -- -- out of bench scale here what we're saying is is that we're -- almost.
Half of what they've paid -- taxes back to big corporations import.
Now Gary these are -- deals these are not the government putting money in this the government giving a corporation a benefit.
For spending money so if your argument is right Gary bay.
This should be good.
The bigger issue is that we're better at it into an age now where we tests talk the -- About how we regret that you know fess up and do the right thing and then about a dozen mentally he got into 2013.
We did exactly is it big it got us into this -- And -- -- -- -- -- -- events in 2010 we're talking weather stick to our ticket.
Well I don't Gary K because that maybe they're talking -- -- but a -- watts because Wall Street as I said had an incredible week.
Why do you think stocks went up if we -- seeing all this feeding at the -- Free money it's a simple as that you have.
All this money going to that assist them in the near term.
-- not just in this government spending.
But -- got -- the money around the world between all the central banks trillions of dollars being printed.
And when you have a fixed asset like the markets and all this money chase saying.
A fixed asset the asset price always goes up whether or not that goes in the long term I'm not sure could eventually it's gonna be earnings a lot of the things that.
Matter of Gary -- if if but stocks keep go on up on this isn't that isn't that good for the economy good for the labor market.
Well at -- I think -- -- definite disconnect and there has been between what the market is doing bingo and what the employment picture looks like look you have the same.
Unemployment number as you did with all.
When -- when President Obama took office so you know I think Caroline's point you -- -- stimulus spending is wonderful and help bullet it's so great.
I don't see I'm I'm scratching my head to see that -- the end the unemployment number -- he'll look at this dead they use sex number the people that have given up looking for jobs you look at the broader employment number.
Has done nothing since he took office sitting in January -- 09.
That stimulus spending how somehow impact I don't see I can make the argument that government -- in.
Sent -- -- prosper like dug the hole wind farm thing as opposed up oil and coal isn't good effective use of money.
-- -- I'm the government can't toiling Cole who you why do you think -- oil and coal industries are so successful they got funds up front from the government we -- actually developed.
Every major energy source and now we're -- -- energy and you're saying we shouldn't invest like that then god help us develop every major energy source.
That's why I didn't market well -- -- the -- he's what he's not scared annoyed.
It right the only reason that these major and -- these alternative energies get developed and they are alternative at the time they are produced.
Whether we are talking timber coal oil or nuclear is because of massive government investment this is nothing here in fact -- used to invest 1% of our federal budget.
On the alternative energy a hundred years ago and our only investing 110 of one -- -- -- grudgingly even -- green energy spending has created a million jobs in the last four years so yes it does create jobs.
And if this is to compare what's Carolina that we are you saying unemployment hasn't gone down it's certainly hatfill and what it -- one man of that loophole is another man's tax and spend it.
Well I mean here's -- his -- Caroline and -- -- god bless you.
The actual reason that prices have gone up for these resources is been actionable demand it be sensitive market demanded the lowest most cost efficient energy source that is because of -- number one number -- Whatever quote and quote green jobs were created an I.
Listen I go right to the lobby go right to the green lobby what ever -- that grated.
We're -- and -- -- cost about 600000.
Dollars per quote unquote job.
Those jobs only hasn't -- -- -- -- they were getting -- -- nothing as subsidies to select.
All right cat I'm sorry our viewers hate it when everybody talks over each other so I gotta stop you that's got to be the last -- right side.