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REPUBLICAN GOVERNORS ATTEMPT TO TURN US INTO EUROPE


The Republicans tell us that President Obama is attempting to adopt European socialism in the USA. However they are actually trying to establish European separatism as an alternative.  Let's face it; Europe is an amalgam of over 20 separate countries with few mechanisms for coordinated Fiscal Policy. Monetary Policy is centralized through the European Central Bank in the same manner that our Monetary Policy is centralized through the Federal Reserve System. However, Europe does not have a strong central government to design and implement fiscal policy. As a result, even the Europeans have doubts about their ability to recover. Each country is pretty much on its own regarding stimulus issues. That means if Italy tries to increase spending and create jobs the result could be that the new spending ends up creating jobs outside of Italy. This would happen if France decided not to stimulate its economy. As a result wages, and therefore, prices would be lower in France and the Italians who were hired under the stimulus would buy French goods. This would result in sporadic growth in Europe and a prolonged recession.

American governors who refuse the stimulus money would be placing our country in the same boat a Europe. The lack of spending in their own states would lead people to relocate to states where the stimulus money is working. The result would be a continued recession in their own states and a delayed recovery in the country as a whole as unemployed workers cross state lines.  The only reason to seek this type of scenario is to be able to say: "See the stimulus didn't work so vote Republican."  The Republicans are willing to see the country suffer so that they can regain power. It is this selfish approach which can threaten the state of the Union. The Republican Governors are traitors who have stronger loyalties to their party than to the country.


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Governors refusing stimulus money have justifiable concerns. Why should they accept expanded unemployment insurance coverage if the federal spigot will be shut off after a couple years?

Louisiana was the only state to add non-farm jobs in December 2008. I wouldn't be so sure people are going to leave just because they think the stimulus dollars aren't being spent.

People can't pick up and move as easily as you think. But even if they could, they'd be right back to Louisiana after a couple years as they see their taxes skyrocket in whatever state they moved to.

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Bill:
Where you see justification, I see political expediency. You are just as partisan as I am. Remember, most of what I wrote had to deal with the consequences of the governors' actions. Mobility in the USA is actually quite high compared to the rest of the world. In addition, extending unemployment is a temporary measure to cover extreme circumstances.

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PS - are you this partisan in your classroom?

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When I cover normative economics all sides are covered.

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Why do you think people will move? And why do you think that extending unemployment is a temporary measure? How do you take those "temporary" people off of unemployment in the future?

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When people have money to spend,unemployment, retail jobs are preserved and created so that people get off the roles. Without extended benefits and job creation people move for either benefits or jobs. (That is why we needed a national welfare system) We've had extended benefits in the past and when the economy improved we reduced them. Extended benefits have always been intended to meet exceptional circumstances. We even had extended benefits during the Reagan Recession.

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But do you have any data to support your theory that people will move out of states like Louisiana and others that will refuse part of the bailout?

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Former Corporate Treasurer in multinational corporation. Currently teaching Economics and Finance at the college level. BS, MA, MBA

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