Economic stimulus

“ All these improvements make the labourers better off with the. same money wages, better off if they do not increase their rate of multiplication. But if they do, and wages consequently fall, at least profits rise, and, while accumulation receives an immediate stimulus, room is made for a greater amount of capital before a sufficient motive arises for sending it abroad. ”

“ Each of those years would represent roughly a trillion dollars in lost output -- what the economy would produce and what the economy could produce with a significant stimulus.
You could imagine what would happen to our deficit if 5 million more people are applying for unemployment claims -- the money that has to go along with that, the spending that would be involved in that -- as well as what would happen to tax receipts if economic output was, over the course of three years, $3 trillion less than what that economy could produce.
Our failure to act is going to worsen the deficit. ”

“ If, therefore, an attempt be made to increase industry, not by increase of population, and thus of demand, the cause of industry—not by industrial freedom, its encouragement, but simply by increase of the rate of the dollar—the attempt will be a failure. It is obviously absurd to suppose industry can be increased by decrease of rate. Increase, while in progress, acts as a stimulus, and thus appears to be successful for a time ”

“ But if, on the other hand, growth in the supply of money does not keep pace with the economy's current production, then prices will fall, the nations's labor force, factories, and other production facilities will not be fully employed, or both. ”

“ I want to briefly share some news about our economy, and talk about the work that we’re doing both to protect American consumers, and to put our economy back on a path to growth and prosperity.
This week, we saw some signs that the gears of America’s economic engine are slowly beginning to turn. Consumer spending and home sales are stabilizing. Unemployment claims are dropping and job losses are beginning to slow. ”

“ Eational standards of living are justified by coextensive industrial efficiency. Progressive well-being tends to affect consumption and production in direct proportion; indeed, the stimulus to increased production normally exceeds the desire to spend, and no lasting influence towards advancing prices or costs results. If, however, expenditures are permitted to infringe upon the capital of the country, or of any particular group of the population, or even upon the rate of accumulation of savings, the effect on prices and costs will be immediate. ”

“ Notwithstanding the tendency of wages to conform to their natural rate, their market rate may, in an improving society, for an indefinite period, be constantly above it; for no sooner may the impulse, which an increased capital gives to a new demand for labour be obeyed, than another increase of capital may produce the same effect; and thus if the increase of capital be gradual and constant, the demand for labour may give a continued stimulus to an increase of people. ”

“ I see at home, I see here, I see wherever I go, that the stimulus which has excited the existing activity, and is producing the existing prosperity, of the country, is nothing else than the stimulus held out to labor by compensating prices. ”

“ The economy, a mixture of private enterprises of all sizes and extensive government intervention, experienced enormous difficulties in the late 1980s, notably declining real growth, runaway inflation, foreign debt obligations of more than $100 billion, and uncertain economic policy. ”

“ For example, it is just twenty years ago, when, at a time of great prosperity in trade—the regular products of this country being as nearly as possible equal to the demand—a large body of capitalists, finding no other outlet for their savings, gave an unnatural stimulus to production, by buying up and storing immense quantities of our home manufactures. ”

“ Although a greater value is produced, a greater proportion of what remains of that142 value, after paying rent, is consumed by the producers, and it is this, and this alone, which regulates profits. Whilst the land yields abundantly, wages may temporarily rise, and the producers may consume more than their accustomed proportion; but the stimulus which will thus be given to population, will speedily reduce the labourers to their usual consumption. ”

“ And that this latter effect is so necessary, in order to create a continued stimulus to productive industry, and keep up an abundant supply of commodities, that in the cases in which it does not take place, a stagnation in the demand for labour is immediately perceptible, and the progress of wealth is checked. ”

“ Herein flows the lifeblood of material existence. The economic mechanism is intricate and its parts interdependent, and has suffered the shocks and jars incident to abnormal demands, credit inflations, and price upheavals. ”

“ These incentives are sweeping fresh winds of progress across America. Along with restraints on government spending and regulating, they're bringing America the strongest surge of economic growth, jobs, business investment, and spendable income since the 1950's. ”

“ The economy will face difficult moments in the months ahead. But, the program for economic recovery that is in place will pull the economy out of its slump and put us on the road to prosperity and stable growth by the latter-half of this year. ”

“ Nevertheless, the economy has proved to be remarkably resilient. Real output has grown at an average rate of 3 percent per year since I took office, and employment has grown by 10 percent. We have added about 8 million productive private sector jobs to the economy. However, unacceptably high inflation--the most difficult economic problem I have faced--persists. ”

“ Looking ahead, the forecasters are projecting that next year we will enjoy even stronger economic growth. They suggest that the gross national product will rise by a healthy 3.2 percent, which should translate into lower unemployment, more jobs, and higher take-home pay. ”

“ The curtailment of profit, and the consequent increased difficulty in making a fortune or obtaining a subsistence by the employment of capital, may act as a stimulus to inventions, and to the use [pg 552] of them when made. If improvements in production are much accelerated, and if these improvements cheapen, directly or indirectly, any of the things habitually consumed by the laborer, profits may rise, and rise sufficiently to make up for all that is taken from them by the tax. ”

“ It can scarcely be doubted, that one of the main causes, which has enabled us hitherto to support, with almost undiminished resources, the prodigious weight of debt which has been accumulated during the last twenty years, is the continued depreciation of the measure in which it has been estimated, and the great stimulus to industry, and power of accumulation, which have been given to the industrious classes of society by the progressive rise of prices. ”

“ Domestically, problems and risks that have been building up over the years are becoming more evident; the change of pace in economic growth, the difficulties associated with structural adjustments, and the transformation of the drivers of growth present interwoven problems; and downward pressure on the economy 1s growing. ”

“ The consequent shifting of the incidence of industrial returns may be ascertained by enumerating the respective beneficiaries and exploitees of the profit-taking process—the trade advantages of the one class measure the economic disability of the other class; and the attenuation of the incomes of the less favored, as a means to augment the profits of the more favored, is a significant attribute of changing social costs. ”

“ Has the progress of wealth and industry no effect in regard to cost of production, but to diminish it? Are no causes of an opposite character brought into operation by the same progress, sufficient in some cases not only to neutralize, but to overcome the former, and convert the descending movement of cost of production into an ascending movement? ”

“ Number one, there was almost uniform consensus among both conservative and liberal economists that when you have the economy on such a free-fall, that you need a big stimulus to try to make sure that goods and services are still being purchased, and that the decline in demand, as consumers pull back, is being filled. If you don't, then the recession gets even worse. ”

“ The continually growing productivity of industry makes necessary a corresponding growth of the market, if disaster is to be avoided. But to enable producers to sell their growing output promptly prices must be reduced and wages must be raised in proportion as the supply of goods increases. For it is only by combining an increase in the money income of the mass of the population with a decrease in the cost of commodities that a country's home markets can be kept expanding with the progress of industrial methods. ”

“ If, instead of growing our own corn, or manufacturing the clothing and other necessaries of the labourer, we discover a new market from which we can supply ourselves with these commodities at a cheaper price, wages will fall and profits rise; but if the commodities obtained at a cheaper rate, by the extension of foreign commerce, or by the improvement of machinery, be exclusively the commodities consumed by the rich, no alteration will take place in the rate of profits. ”

“ Before the individual will expend his maximum energy upon the economic process, he must see tangible results such as bread, shoes, schools, and holidays. One of the strongest arguments that the present economic system advances in favor of its continuance is the showing of large tangible returns in the form of economic goods. ”

“ The man who has a dollar in his pocket knows that speculators and gold-gamblers cannot, by some juggle, take five cents or ten cents from its value, in twenty-four hours, as they could a few years ago. The public burdens have been largely reduced. Our exports far exceed our imports, and our balance-sheet with the world shows an immense sum in our favor. The boom of business is heard in the land. The preachers of calamity are out of date. Commerce, industry, enterprise, capital, labor, all feel the impulse of substantial prosperity running through every artery of public and private activities. ”

“ In urging a course of strict economy we admit that it is hard, embarrassing, perplexing, onerous, but it is by no means impracticable. A cool survey of one's expenditures, compared with his income; a wise balancing of ends to be gained; a firm and calm determination to break with custom wherever it is opposed to good sense, and a patience that does not chafe at small and gradual results, will do much towards establishing the principle of economy and securing its benefits. Economy has, however, deeper roots than even this—in the desires. It is there, after all, that we control our expenditures. ”

“ When insisting that we needed more currency, they evidently did not consider that during a crisis business contracts itself; that people reduce their expenses; that demand falls off, and thereby production is necessarily discouraged; that capital becomes more than ordinarily timid in its investments; that enterprise grows very circumspect, and confines itself to the safest ventures ”

“ Making timely and resolute adjustments to macroeconomic policies and doing everything possible to maintain steady and rapid economic development We maintained the right direction, focus, intensity and pace of macro control, and adopted a series of policies and measures to promote steady and rapid economic development. In a complex and volatile situation, we actively responded to the severe impact of the global financial crisis and worked hard to make our macro control more proactive, targeted and effective. ”

“ They are pre-eminently qualified to stimulate a brisk traffic in goods under conditions hitherto determined by natural economy and both are significant in economic history as mile-stones along the route of rapid dissolution of old economic organisations, of social crises and of the development of modern conditions, that is to say of the development of commodity economy to begin with, and further of the production of capital. ”

“ First, it shifts our emphasis in public and private spending from consumption to investment, initially by jumpstarting the economy in the short term and investing in our people, their jobs, and their incomes over the long run. ”

“ The labourer may obtain greater comforts; wages in kind real wages may rise. Or the progress of population may force down cultivation to inferior soils, and more costly processes; thus raising the cost of production, the value, and the price, of the chief articles of the labourer's consumption. On either of these suppositions, the rate of profit will fall. ”

“ Within the vitals of the economic system upon which it subsists the plutocracy has found a source of never-ending torment in the form of a constantly increasing surplus.
2. The Knotty Problem of Surplus
The present system of industry is so organized that the worker is always paid less in wages than he creates in product. A part of this difference between product and wages goes to the upkeep and expansion of the industry in which the worker is employed. Another part in the form of interest, dividends, rents, royalties and profits, goes to the owners of the land and productive machinery. ”

“ The nation which would keep its head above the tide must accurately adjust supply to demand, and eliminate waste to the last least particle. Standards of living will most likely descend for millions of people. With the increase of capital, the competition for safe investments, and the consequent fall of the interest rate, the principal which today earns a comfortable income would not then support a bare existence. ”

“ If, on the other hand, the worker will save from his surplus earnings, he will increase the community's capital, and this will tend, directly or indirectly, to cause the production of further commodities, so increasing the supply of commodities and therefore tending to reduce prices. ”