Author Topic: Obama's stimulus package  (Read 18830 times)

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Obama's stimulus package
« on: January 29, 2009, 03:54:07 PM »

Offline JSD

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I don't like the idea of throwing money at a problem... I'm no economics genius, but won't printing money with nothing "backing it" create massive inflation?

I heard an idea that I liked this morning which involved eliminating the federal income tax for 1 year. I don't have any numbers to back me, but I'm betting that this would generate at least 2X the money for the spending working class and without the inflation...

Re: Obama's stimulus package
« Reply #1 on: January 29, 2009, 04:18:20 PM »

Offline Brendan

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On your inflation question: Yes.

For the TARP it was conceivable that buying distressed assets could solve the liquidity crisis and since the government would layer sell them you could be okay. That turned into the bank nationalization plan (also known as socializing America phase 1.)

But with this PORK fest - we're going to end up with an extra 1-2 trillion dollars (including TARP) in the economy. If this doesn't cause inflation, its a sign that the economy is in even worse shape than most think. Factor in that much of the funds will be dumped in after things should have sorted it out, and it makes it worse. I've been going through the bill and reading others who have, and its really egregious what's being funding. It seems like maybe 1/8th of the bill is geared towards anything that could be considered stimulus, 3/8ths is just pure pork grease to buy off what little morals and scruples are left in congress, and the last 4/8ths is direct pay off to Obama's constituents and donors. (Hey when you raise the most money ever, you have to provide ROI.) Say what you want about Acorn's mission - its not even arguable that they have some shady operation, but how is giving them billions going to stimulate the economy?

Re: Obama's stimulus package
« Reply #2 on: January 29, 2009, 04:42:37 PM »

Offline angryguy77

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i give this topic about 3 seconds before its pulled. But you both are right on this. Instead of giving the money away, they should give tax breaks to business and citizens. I had to close down my business in nov and one of the big things that hurt me since the day I opened was the taxes imposed by the fed and state. I just ran a pizza joint, imagine how much larger companies are forced to pay and what they could be doing with that money to creat extra jobs and expand. If I hadn't had to pay so much, I would still be open and with the intent on expanding. But the government doesn't want business to expand, it wants to milk it for everything that it can and if the owner/shareholders are lucky, they can keep the crumbs for themselves.

Re: Obama's stimulus package
« Reply #3 on: January 29, 2009, 04:45:54 PM »

Offline angryguy77

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one other thing, can somone please tell me how the government can grow the economy by inflating itself. This should be titled "Government Union and Democratic Party Growth Act"

Re: Obama's stimulus package
« Reply #4 on: January 29, 2009, 04:51:35 PM »

Offline Brendan

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Big business is neutral on taxes and regulation. They have the accountants and lawyers to deal with them, and the lobbyists to get their loop holes. Sure they'd like to be more profitable, but its nice having the gov't throw barriers to entry across the marketplace when you already exist.

As for an actual stimulus plan, how about simply eliminating all corporate taxes. Every fat multi-nat would be moving jobs to the US, and every entrepreneur would have more cash to hire and spend. While they are at, eliminate all the regressive taxes (SS, medicare) and flatten the income tax that discourages upward mobility.

According to a bunch of studies I saw Mankiw link, every dollar cut in taxes is worth 3 dollars in spending.

Anyways, this bill has NOTHING to do with stimulus. The actual stimulus spending (whatever its merits) is a tiny piece of the bill and the name is just the marketing necessary to cram it down the throats of the (mostly) naive populace. Its also a huge generational wealth transfer (which for reasons of life expectancy are also highly regressive and negatively effect African Americans more than any other demographic.)

Re: Obama's stimulus package
« Reply #5 on: January 29, 2009, 05:20:44 PM »

Offline Brickowski

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No, because the tax cuts do not result in expenditures where they are needed, such infrastructure repair or renewable energy. Excessive tax cuts might fuel another round of pigginess, which is what got us into trouble in the first place.

There also needs to be a new Resolution Trust Co. to buy bad financial assets from the banks.

Doing nothing is not an option.  The human cost would be staggering. Bailing out the fat cats on Wall Street-- which is what Bush and Paulson did-- is not an option either.

Presumably the government has listened to leading economists and is doing what they have recommended.  Is economics such an inexact (or politically motivated) discipline that there can be no consensus of economic minds as to a reasonable course of action?

Re: Obama's stimulus package
« Reply #6 on: January 29, 2009, 06:33:16 PM »

Offline BigDanz2000

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The Stimulus Package is a joke, according to Obama he claims 2 million jobs will be created, well thats just great for the short term, but those jobs are just temporary. 

Included in his tax cuts and the $500 break for singles and $1000 break for couples, which amounts to about $10 dollars a week, also includes illegal immigrants.  As long as you are working in the Good 'Ol US of A you receive that tax break even though you dont have a vaild US Social Security number.  Unbelievable. Free money for all. Why not?

Jsaad your simple lesson on economics is correct.  More money, more inflation, prices go up, but wages never match the rate of inflation.  Which means, the government keeps you locked into serfdom through credit because in most cases you dont have the money to keep up with the ever rising cost of product.  Couple that with 40% of your yearly income going straight to taxes, January to June you work just to call yourself a law abiding citizen.

Next the nationalization of Banks- Obama has a plan in place to create a bank that absorbs all the bad debt of other banks.

When does the American Republic wise up? Its time for us as People to reject what is not in our best interests instead of sitting on the sidelines and playing Daddy knows best. 

Re: Obama's stimulus package
« Reply #7 on: January 29, 2009, 08:19:23 PM »

Offline Cman

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Interesting topic to read through.

As always on these issues, everyone has an opinion, but no one has much of a clue about how to fix the problem. 

My general take on the bill is that it combines a mix of mechanisms to help stimulate the economy. 

(1) There are some tax breaks, which is good -- it is the simplest way to put money in people's pockets.  Problem is, the money tends to stay there, not get spent. 

(2) There is some infrastructure spending (including spending on schools/ education, which I would lump in there).  This is also good -- it takes a little longer to get spent, but the nice thing is that it actually does get spent.

(3) There are mechanisms designed to help people that really need it (more foodstamp money). 

Now, I am no expert on public finance or macro economics, but I do like that there is a mix of things that are being used to battle the problem.  Are there other things that should be in the bill that aren't?  Are there things in the bill that shouldn't?  Probably.  But it is a start, and it is a FAST start, so I say hats off to the President.
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Re: Obama's stimulus package
« Reply #8 on: January 29, 2009, 09:35:54 PM »

Offline angryguy77

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We don't need the government to "fix" the economy. What we need is for it to get out of the way and unshackle the business owner and the inovators in our society. Only then will we see growth and prosperity. But the mentality in this country is that government is the be all and end all of adversity. I think that people forget that it is our money to begin with and they have no business spending it on waste like they do. Creating more government jobs does not create economic growth. If what makes the economy move is government pay checks, then why don't we make all business gov. run? I would also like to know how extending unemployment benefits to people will creat jobs and improve the ecomnomy. This is nothing more that a New Deal ripoff and history has shown that FDR's plan didn't get us out of the depression.

"No, because the tax cuts do not result in expenditures where they are needed, such infrastructure repair or renewable energy. Excessive tax cuts might fuel another round of pigginess, which is what got us into trouble in the first place."

It was not greed or "pigginess" that got us into this mess. ITs called capitalism. The media and certain ideologies have tried to brainwash the country that large profits are bad and when some guy make a lot of money he must have taken it from his neighbor. The gov. demonizes oil companies about how much money they make a year and how they don't need to make that large of profit. But the funny thing is the gov. makes more money on a gallon sold than the oil companies. Whose the thug here?

Mr. President, just leave us alone and let us decide what we want to do with OUR money.

Re: Obama's stimulus package
« Reply #9 on: January 29, 2009, 09:46:45 PM »

Offline CoachBo

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Uh, no.

It was indeed greed, the byproduct of an unregulated market ripe with investment gimmicks built from the get-go to allow savvy financial geniuses to bilk money.

The unregulated free market only works for those savvy enough to manipulate us. For the rest of us, it bankrupts the economy.

Time to slap the financial markets with some regulations and some laws that spell prison time, not billion-dollar bonuses. Enron Phil Gramm, the self-serving architect of the deregulation bill, and Bill Clinton, the idiot who signed it, should share a cell.

But ... this topic was bound to devolve into a frantic attempt to defend the failed greed-driven ideologies of the neo-cons.

This is one of the rare times when Brick and I will agree: the first bailout package was what almost every government program was during the Bush Reign of Terror - a gargantuan giveaway at taxpayer expense to the allies of the neo-cons. It bordered on the criminal.

Now, to the package at hand: It doesn't do enough in terms of tax relief for the middle class, but its combination of infrastructure aid and aid to the people decimated by the Bush administration is a good start. I'd rather see more middle class tax cuts - if they need to come at the expense of the immortal 1 percent that Bush's entire administration shoveled money to, so be it.

But it's a decent start at rectifying the problems created in the past decade.
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Re: Obama's stimulus package
« Reply #10 on: January 29, 2009, 09:47:10 PM »

Offline Roy Hobbs

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I'm looking forward to the $9 per week in my paycheck.  That ought to improve my financial situation significantly.  :P
« Last Edit: January 29, 2009, 09:57:14 PM by Roy Hobbs »

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Re: Obama's stimulus package
« Reply #11 on: January 29, 2009, 09:54:52 PM »

Offline Brickowski

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The Democrats want to do something.  It may not work.

The Republicans want to do nothing, figuring that the economy will fix itself so long as we reduce taxes enough.

That's that same old Republican mantra that got us into this mess, with deregulation and an economic system where the PIGS got everything and the rest were left holding the bag.

My vote goes to trying something, even if it doesn't work.

Re: Obama's stimulus package
« Reply #12 on: January 29, 2009, 10:29:53 PM »

Offline angryguy77

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:a gargantuan giveaway at taxpayer expense to the allies of the neo-cons. It bordered on the criminal". And who was the party again that controlled the house and senate that passed that?

The republicans do have a plan but they were not allowed into the process by Pelosi and her gang. Funny, I thougt change was comming, but it seems to me that its the same ol thing

Re: Obama's stimulus package
« Reply #13 on: January 29, 2009, 10:34:47 PM »

Offline Brickowski

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The Republicans had a plan?  Err.... what was it? 

As far as I can tell, their plan was for Henry Paulson to fund all of Wall Street's bonuses for 2008 with zero oversight or accountability for where the money went.

Am I missing something?
« Last Edit: January 29, 2009, 11:14:55 PM by Brickowski »

Re: Obama's stimulus package
« Reply #14 on: January 29, 2009, 10:49:59 PM »

Offline EarthBall

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I'm a fan of the democratic (little 'd') process. That is, I think the government should do what the majority of the voting population wants.

That said, in times of crisis, I believe that we should leave the problems to the experts (assuming we have reason to trust their knowledge and judgment - those in the Obama admin have yet to lose my trust in them). In this case, the economic advisors that helped craft the stimulus package know more than any of us. If you have a health problem, do you ask your friend for medical help or go see a doctor?

Let's stop bickering because, face it, we don't know jack.

 

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