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What on earth is a Permanent Job?
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[QUOTE]Originally posted by The Bigfoot: [QB] It's all about supply and demand. We overstocked in multiple industries and because of that demand was sated. Our economy was headed for a stall out even discounting all the bad paper and fraud that passed the underwriters and regulators desks without hearing a single boo. What critics of the stimulus are basically saying is that the stimulus doesn't create long term demand. Now then, try to come up with a scenario where an entity could create long term demand in an oversupplied market? Short of long term subsidizing or confiscation of excess goods there is no way to do it and both the two options listed above would have a negative targeted economic value that would drive the recession deeper for those affected. What can be done, has been done. Temporary projects working on existing or previously planned facilities while implementing stronger quality controls to upgrade or remove substandard goods from the marketplace in an effort to reduce recurring expenses while waiting for the shock of rampant fraud to wear off and for the market to absorb the excessive production of the last decade. Relentless calls Cash for Clunkers a temporary contract with no lasting value. I agree it was temporary but I call it a short term subsidy of the auto industry with a new car being provided to the taxpayers who chose (and were eligible) to participate. It doesn't increase supply because all vehicles turned in were destroyed, but gives the industry vendors an infusion of capital they can use to survive while adjusting to the new reduced auto market. The secondary effect of cash for clunkers is upgrading substandard vehicles (fuel efficiency/emissions) in the public domain to reduce the recurring expenses of fossil fuel importation and emissions related toxic clean up costs. My fear is that it appears the lesson hasn't been taken to heart. While the American automaker (and auto customer) have finally started putting a premium on efficiency it seems to me the industry as a whole is ramping up to flood the market again as soon as possible. Leasing programs are back in action and soon we will have a greater supply than we have even now if with a new line of vehicles. You can not increase your product sales by 4% per year when the size of the market only increases by 3% per year and expect to remain sustainable. Now attention is turning to homes in the form of the home buyer tax credit extension, the Fed buying MBS and keeping rates steady, and home improvement/energy efficiency credits. Foreclosures are down 8% this month so it appears there are effects taking place. Then perhaps the jobs summit will have a new direction to reduce the unemployment rate while work continues on making headway in overhauling healthcare and reducing medical costs while increasing the health of the nation. You can argue that the stimulus isn't worth the cost if you want, but lets be honest here...the only other option was do nothing. There is no permanent job plan that could have been enacted but was passed up. What is being done is what was available to be done. [/QB][/QUOTE]
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