This is a short term bandaid. Its an election year. Tax cuts of this size need to be paid for somehow. A tax increase will have to follow sometime down the road.
So the Chinese will buy the bonds that we need to sell so that we can give $1600 to folks to buy more stuff made in China. The virtuous cycle continues!
With 90 billion a quarter of direct MEW money to replace, plus all of the other real-estate related money injections, it would seem bubble replacement costs would run $150-$200 billion per quarter.
His $185B covers one quarter, what about the other 3 quarters?
His first cut was one of the dumbest cuts this country has ever seen, now he is talking about this. With all the entitlements due for the Baby boomers, I cant help but wonder how and when all these cuts will be paid for?
This will just end up hurting us in the long run. Nobody is thinking about the 8 trillion SS problem or the 42 trillion Medicare and Medicaid problem. so lets cut taxes and put us in deeper long term trouble.
Tanta - Unfortunately we dont all qualify for the help. Incomes of 85K and above for single and 110K and above for married will not be eligible for the money.
They should make an exemption from that rule Brian - anyone who didnt take a mortgage from 2001 to 2008 and doesn't own a house should also get the $800. (Hey, I can try.)
what if the stimulus was to, i don't know, pay back some debt? Wouldn't it be just as good for the credit markets, which seem to be one of the problems, if the U.S. gov't stopped borrowing $400 billion each year? Why doesn't Bush just trust his precious free market to fix this?
These won't have to be paid back. The dirty little secret us youngens have is we're really not going to be paying for the boomers Medicare and Social Security! I mean, crap, they already left us a $9 Trillion debt.
$800 won't cut it. Between equity and credit cards, consumers have been overspending by thousands of dollars a year on average. This is, as pointed out above, not going to cut it (I wouldn't call it a drop in the bucket, but the bucket is far from full.)
Congress will probably raise the bet, but it won't work. Consumers are already worried, and I bet that much of the money will simply go to keeping the credit card and mortgage wolves at bay for a month or two.
So many millions of Americans are in a financial hole that gets deeper every month. The most this "stimulus" will do for them is keep the hole from getting deeper for a month or two. Then life resumes a downward trend.
Expect a lot of this money to be spent on nondurable goods and services: food, rent, health care. I don't see anything constructive here except... well, when you hand people money they stop complaining for a little while. With an election coming up, that's probably as far as Washington thinks.
I was interested to hear Fred Thompson, of all people, say on NPR that there's an argument for "letting it burn:" let the bad mortgages go south, let the economy play itself out. He didn't say he was in favor, just that he said the idea had merit and was worth looking at. I'm not tempted to vote for him still, but that was a bit of fresh air.
"The dirty little secret us youngens have is we're really not going to be paying for the boomers Medicare and Social Security!"[ my poor savings account | 12:13 pm]
I'm a boomer, and I hope you can make that stick. No way I support you being saddled with that.
"they already left us a $9 Trillion debt."
Be fair now, we had a little help from Gen X & Gen Y. Half of 'em still think Reagan was good for the country. I just thought he was good for my pocketbook.
.... how much booze, I mean, cough syrup can I get for 800 bucks?
you guys here know a lot more about finance, but to me this sounds like it would cost real money
and won't do a bit of good.
Why not give the money directly to bail out Wall St if that is what worries Bush? It would at least make the Dow go up for a few hours (so I can sell) or somethi
And when things are still bad in July, do we double down and send everyone $3200??? Or are we just on our own then?
And why can't we be on our own now?
i for one would use my 1600 to pay my stupid taxes that i owe since i am renting and have too much income and as a family of 4 claim 0 0 and still owe 2K from 06.
or as someone suggested lowering a credit card bill or student loan..
But I don't get it, if we're not in a recession why do we need a government stimulus proposal. I seem to recall only seeing things like this during recessions.
Sebastian or O-Joe, please help me figure this one out.`
shouldnt it get adjusted for cost of living? 85k is not a lot of money in nyc... 85k in the midwest is a lot... but they are savers by nature.... this will do no good...
'Sell' Taiwan to the Chinese for one trillion, maybe more. (not really sell, but look the other way) Let the fleeing rich Taiwanese move to the US and buy the surplus houses and maybe bring some factories with them.
US gets some real money to buy itself some time. China gets to dump dollars. Dollar stays afloat.
I don't endorse this but I could see Bush doing it. What's to lose?
Bush's economic stimulus not withstanding any economist will say that Americans have been living better than they should, which is by definition the case when a nationÂ’s total consumption is greater than its total production, as AmericaÂ’s now is.
Without ChinaÂ’s billion dollars a day, the United States could not keep its economy stable or spare the dollar from collapse.
Will the Chinese now use this weapon of mass USA economic destruction now that Bushie boy pushed the panic botton ?
Bush had ideas about the cost of his war for oil in Iraq also, and as some here may realize, those estimates and all thinking related to that insanity remains very suspect!
I see CR forgot to mention that we're increasing the price of the newsletter to $800. Now that we know you all have the money.
hmm, I can't afford that. How about we make a deal?
Let me borrow the money from you at a low ARM rate for 3 months, plus I can pay only 1% whenever I feel like and the extra interest payment just gets added onto the principal owed. At the end of 6 months I'll just pay it back in full, like a balloon. Everybody wins!
Can anyone remember why Bush wasnt impeached or why there never was any discussion of treason in either house; what happened with accountability and reality?
Bush wasn't impeached because "he trick-s usss!" is a stupid charge. Intentionally mounting a lying campaign to get the country into a trillion-dollar war is certainly an impeachable act, but the damage has been done and the way things are shaping Bush is going to be the most infamous president in US history, making Nixon and perhaps even Hoover look golden.
This is the lamest, stupidest, most idiotic bullshit I've heard in months -- and that's saying something. Sure, I'll take the money, and I'll send it to Capital One the way I do all the rest of my dough. The last thing I'd ever do is spend it on more cheap Chinese junk (i.e., "consumer goods"). I can't believe anyone hearing of this stimulus package would view it with anything other than contempt.
Things are exponentially worse than anyone with a direct stake in this economy will ever admit, and there isn't any way to fix it. I expect my wife and I to live out my days in a fine abandoned dwelling somewhere in the boonies, surrounded by gardens and a few fruit trees, grateful that at long last the whole stinking shitpile of greed and lies has come tumbling down. I won't miss TV, movies, the Internet, or any of it. All I ask is for a peaceful death in a beautiful place, and THAT is well within my grasp!
I'm already on the edge. You guys with all the play money and the big houses in the city are going to have an infinitely harder time of it, unless you open yourselves to that which hasn't even been imagined yet.
The Chinese don't want to destroy the US, at least not yet. Selling to us is what makes their economy go. They may wish to stimulate internal demand for their products to replace external demand, but that will take some time. For the near future, China needs the US to keep buying , buying, buying.
Market was up 100 and now it is flat. If the stimulus is suppose to be good, why don't the markets like it? I guess we are all in Argentina and hyperinflation now.
Paulson: "Looking at the long-term, our economy is very healthy ... There's nothing more important for the long-term than making the tax cuts permanent." Puhleeze!
I really think they F-ed up big time with this stimulus idea. The problem is, the factor which will really take this economy down the tubes is consumer and business psychology. When people realize we are really in trouble, they hunker down. Consumers save more, spend less, businesses invest less, hire less - vicious circle. Yeh, we had a few bad months, but weve had them before, and all it took was some kind words, and a few data points that looked ok and we could put our happy caps back on. Now, granted, the chance of this game working further was looking a bit slim, but it was probably a better bet than seeing the gubmint capitulate. I mean, when you announce this type of thing, you are basically reinforcing the believe by consumers that they have to batten down the hatches, and changing the behavior of those who didnt need to pull back. So, my guess, whatever tiny stimulus this produces, is more than paid back by a further pullback by scared consumers.
Bribing the population with its own money worked last time. That, and a pointless war in the Middle East, and artificially low interest rates, and the largest real estate bubble the world has ever seen. We're well on our way to endless growth!
The risk here is that people will want to save the money instead of spend it. To prevent that, we should issue these rebates in the form of coupons redeemable at popular big box retailers.
Is it the republican plan to so bankrupt our country, that we have to abandon most entitlement programs? When Bush was running in 1999, he said we needed a tax cut to "give the surplus back to the people". Then in 2001, "we need a tax cut to get us out of recession". Now, we need another tax cut to help the economy? Of course at the same time, these guys increased spending over 60%!!!
We've had six months of "no recession, no recession, no recession,"
followed by six months of "slow growth and a short credit crunch"
All of the sudden after a 4.9% GDP and some data that confirms the growth at 1% theory, we get absolute panic by the Govt to avert a recession that they don't believe will happen.
They are responding to stock prices....period.
There has been no data that couldn't fit into their theory of a short term slowing followed by growth acceleration in a couple of quarters.
What is gonna happen when the recession is confirmed and the prognosis for a quick recovery looks in doubt?
We are at the latter stages of a drug addiction, where every waking moment is consumed with the thought of what may happen if you can't get that fix.
The risk here is that people will want to save the money instead of spend it. To prevent that, we should issue these rebates in the form of coupons redeemable at popular big box retailers.
as politically unpopular as it would be (probably here not least of all), this is stimulus directed at the wrong party. $145bn directed to recapitalizing dying american banks would possibly do some good -- and that only just possibly.
this, however, is a waste of government debt. with the change in psychology now afoot, it's going to get sent to credit card companies and mortgage servicers to contract money supply when it isn't being hoarded in a savings account so that a bank can hoard it.
Even when I don't have the money to pay my mortage, people are still trying to trick me to give 'em $800.
Love this site, so how about a free one.... eh?
One thing that is a bit scary here is that we're seeing some real bipartisanship on this "stimulus package." Bipartisanship has been as plentiful as california condors up to now. So what gives? My theory is that, behind closed doors, they are getting some awfully scary scenarios from the Wall Street types.
But how could anyone think that handing $800 checks to people will fix anything? This plan is waaaay too brilliant for me to understand.
It's like ethanol and the war in Iraq. It just CAN'T be as stupid as it sounds.
Would be nice if some of the brainpower on this site were to suggest things that might help mitigate the losses and pain rather than simply chronicling the damage and taking photos of the injured.
Come on, smart people, what should Ben and the administration do?
Or, alternatively, what WILL they do?
Maybe some sort of monoline insurer bailout/underwriting by the government to save the muni market? Maybe something big and drastic to encourage people back into buying houses (double tax deduction on interest, one-time credit, etc).
Whatever it is, it needs to be BIG and target the worst drags on the economy and sentiment: credit/solvency of banks, housing values and foreclosures.
The best thing to do is nothing. Let the market work itself out. That's what a free market is supposed to do. When you go monkeying with it, you end up with bubbles like this one, created by Greenspan the Magnificent.
gn - in order to know what to do, you have to first try to say what you are hoping to accomplish. My theory is, we've f-ed up, we've been doing it a long time, and stimulus of this sort, isn't going to change that. We need to take our medicine, and think about the type of economic policies that would produce a better america in a decade. Like, investing in education rather than house remodeling. Or producing things from ideas from skilled engineers and designers, instead of pawning off crap paper as AAA to unwitting investors. Our economy has been largely a joke since 2000. Problem is, it's not funny. Maybe we should think about how to address the entitlement problems we will have in 2018 when Medicare is bankrupt, rather than creating giveaways to the drug companies and lying about the costs (read Medicare plan D). I could go on and on.
"...A key part of the White House's plan involves income-tax relief, but that leaves out breaks on payroll taxes paid by poorer Americans..."
Is this true? (source marketwatch) No wonder the markets are unimpressed. The peole who actually have "income" on which to pay tax would spend $800 on a nice lunch.
And even if they decided on a payroll tax rebate, by the time the rebate arrives (after it has been through Congress and then the tax authorities) it will be too late. If we have a Katrina-like event, why not take Katrina type action. Give out $800 vouchers for food, heating, shelter. These could be distributed from local schools, libraries, fire stations etc. Cross peoples social security numbers off a municipal list when the money is given out. Better still, give it out on 5 Feb when people show up for primaries voting - added benefit of getting lots of peple out to vote!
I mean really, ther's got to be a better solution...
And I always thought posters here were in favor of giving the money to the people instead of the government. So when Pres. Bush does exactly that, it's wrong again? Must be something personal.
So many desperate sounding voices as the US consumption based economy takes a little breather.
$800 tax rebate is a marketing ploy that will have a "surge" component down the road like the TAF ceilings, no?
What would a more production based US economy look like?
What can we produce for China, India and the under-developed (fuggedabout the underpaid/overproductive aspect) consumers of the world?
The counterparty risk where your partner folds has gone global here, yes? The transnationals are so successful, they are threatening their major host.
O-Joe, I don't want to pay more taxes than I do. But I would be happy if the taxes I do pay went to paying for a balanced budget and not some give away that many on this site will not even qualify for.
For a good summary of what various policies would do to stimulate the economy, go to http:/www.cbo.gov//ftpdocs/88xx/doc8893/blog-econstimulustable.htm
Two things they could do to put money in the hands of those who would spend in on the economy would be to stop taxing unemployment compensation and social security retirement benefits.
I mean do you REALLY consider either of those to be "income" in the usual sense? If so, why not start taxing the patient for the amounts paid to the medicare doctor or hospital?
One program I saw recommended elsewhere seems to me to have merit.
Congress could authorize somewhat less pinchpenny and brief federal unemployment compensation. In terms of addressing real misery, this administration could do far worse.
People who haven't been greatly affected by recent events (or events to come) would, I think, appreciate seeing something being done for those who have.
In fact my lazy, dope smokin, slacker, debt whorin, bk filin cousins will be gettin $800 each to go get some pot, a tattoo or a Sony Playstation while I actually pay taxes.
BTW, DING! We have a winner! And it's Average Joe!
"They are responding to stock prices....period."
And there you have it. Doesnt matter to them until it might possibly result in something that hurts his peeps, the wealthy. Keep that market propped.
Second place : " My theory is that, behind closed doors, they are getting some awfully scary scenarios from the Wall Street types." - thank you Mr Stark.
OMG I sound like a bleeding heart liberal. So let me just add that in order to collect your $800 you have to bring mortgage documentation and pay stubs and if you committed mortgage FRAUD you do not get your $800. Let them eat baloney.
Where do you think this money is coming from? our vast reserves of cash?
This is another borrow and spend tactic that has a long history of failure.
The government will sell more treasuries to the Chinese, so they can send us all checks, so we can go out and buy more Chinese goods (as hopeinsd mentioned).
At best, this will only postpone a severe correction that everyone agrees needs to occur.
Take steps to encourage business investment (in the United States) and shovel money to cities and states and counties to fix roads, bridges, schools, whatever.
In other words: let's INVEST that $150 million in hopes of getting a future return. How can SPENDING this money fix our problem?
This will end up like the Super SIV and Hope Now. Tied up by election year government bickering until it's either so watered down its impotent, or so late that a new government is in place and is changed, or until another bigger emergency comes along that distracts the government like glittery wool does a kitten.
110K upper limit for married couples? That's not going to do so much in California, I think. It seems to me many double income couples would be well above this figure here.
Why are so many commentators unpersuaded that they won't get a refund ? Most here file taxes and actually have taxes exceeding 800 per person ( 1600 per couple ) they pay don't they and the best read I have on this is that this category will get a refund ?
The fight should be on whether or not to extend it to those who just file taxes but don't actually pay any tax. That is a real handout( though there is no such thing - its always paid for someway) - the first scenario is just giving you back your money.
Then there's the real fight on food stamps and extending unemployment benefit.
Well, let's see, what should we do to fix the problems we face?
First let's define the problems: (1) house prices in the stratosphere, coming back down to earth. (2) Consumers realizing they spent more than they can ever pay back, even under ideal economic conditions. (3) Loose monetary and fiscal policies, with lax regulation that caused both of the first problems...
I propose a solution: Attack problem #3 instead of its symptoms (problems #1 and #2).
Remember the debates on this board about how to implement Hope Now and who should get it. Same thing happening again. They're going to come up with some "formula" on who will get the funds and it will end up being a couple of hundred people. Everyone will lose interest and the markets will continue down but they will have at least bought a few weeks till the next rate cut as well as created the appearance of actually doing something.
And I always thought posters here were in favor of giving the money to the people instead of the government. So when Pres. Bush does exactly that, it's wrong again? Must be something personal.
My key issue is that borrowing and spending got us where we are. What is this tax rebate thing but much more of the same?
We need to invest, invest, invest: in our roads and bridges, our telecommunications system, our kids, our environment, new technologies that reduce energy consumption...add your own favorites.
Saving and investing means we have less money to spend right now on granite counter tops, trips to Hawaii, home theater systems, i-phones, wii, and so on. That likely means huge dislocations in economic sectors that employ a lot of people here and elsewhere. Let's not minimize the pain involved in making this transition. But we need to focus on the pain that will be involved in NOT making it. We can decide to make this transition in an orderly way, or the transition will make US, in a way that guarantees maximum pain and disruption.
It seems as though we have gotten past the point where we are willing to think and act like grownups. We just keep stamping our feet, holding our breath and screaming for more, and our leaders scramble to give it to us.
"Would be nice if some of the brainpower on this site were to suggest things that might help mitigate the losses and pain rather than simply chronicling the damage and taking photos of the injured."
fair challenge:
rebating money to the general population will help the economy like another shot of heroine to an addict.
giving money to the top 1%..the high rollers will result in a very large portion being invested abroad...not much help at home (even boeing airplanes are largely outsourced).
unless, we require:
domestic investment in a "Manhattan project" directed at 21st century transportation infrastructure and an alternative energy infrastructure develoment program that centers around hydrogen production from water using electricity generated from:
clean coal (sequestration of carbon etc)
geothermal
wind
new nuke technology that is proving to be safer as demonstrated by japan and france and germany (self limiting reactors)
solar.
hydrogen can power fuel cells or be burned in an engine as designed to burn ethanol or gasoline.
When they said everyone gets $800, the way these guys burn money, I thought it was gonna be $800,000. That might have helped some. Anyone have any suggestions on whose picture is gonna be on the first million dollar bill Ben prints?
I yield to no man in my contempt for George W Bush. I've been railing about his lack of intelligence, character, judgment, integrity and candor ever since right wingers first brought his name forward in the late 1990s. To some extent it pleases me no end to see dozens of folks piling on to put the boots to the guy -- and no one defending him.
But y'know what. This isn't that bad a plan. It puts a reasonable amount of money into the hands of people that mostly will spend it. The business tax incentives look to be temporary -- use em or lose em. Compared to the utter lunacies like the first term tax cuts, deciding to nation build instead of capturing bin Laden, and the Iraq debacle, this is quite sane and moderate. In the bad old days, he'd have proposed a cut in the corporate income tax, another cut in capital gains taxes, invading Alberta and a free HDTV set for every American. (And yeah, a pony too).
The real problem is that we don't really understand what the problem is so we don't know if fiscal stimulus is needed. Would it be possible for the idiots on the right to quit lying and quit telling us everything is OK; the real economists to quit saying I told you so; the money men to quit saying things are under control; the MSM to take a few days of their lives and actually learn something; the candidates to stop posturing; and the Bush haters to simmer down until we can get around to setting up a war crimes tribunal?
Then maybe we could start trying to figure out exactly where the US stands and what needs to be done. If we actually need a stimulus package to preserve a few jobs, we might be able to live with this.
"The consumer is very cautious," says Trudy Sullivan, chief executive officer at clothing retailer Talbots Inc., which will pare store inventories by 7% to 8% this year and use more frequent markdowns. Retailers haven't faced so many difficulties since the deep economic downturn of 1990-1991 pushed many off track.
An expected 4% sales increase for the November-December holiday period at stores open at least a year rang in at only 3% compared with the 2006 holidays
roundabout...what FDR did during the great depression was a help...he expanded aggregate demand. (people also got work and got to feed their families) unfortunately he was a tad too timid in his actions,for the remedy to work rapidly. the war obviously did the rest, but that was the same prescription.
o joe...i think AEI stands for American enterprise institute...a conservative think tank in DC.
Also, Roundabout, while it is true that the New Deal didn't end the depression, it did change the psychology, giving people some hope. It helped to stave off political movements (huey long, dr. townsend) who were mobilizing millions of followers by promising to give everyone money.
Re: President Bush said any plan should feature "direct and rapid income tax relief" to boost consumer spending. "Letting Americans keep more of their own money should increase consumer spending, and lift our economy at a time when people otherwise might spend less."
Last time this happened, didnt you have pay it back or declare it as income or something; Im fuzzy on the first Bush tax cut by the 2nd Son. Seems it would be simple to just declare that when you send in your taxes, that you will either subtract a few hundred or sign on to have a check sent to you after you file; is that too easy?
I for one would be all for a massive public works program incorporating investment in public infrastructure, including areas listed by mock turtle and other clean technologies. This would put real money in the hands of people most likely to spend it, and at the same time yield long term savings through the improvements in infrastructure. A visit to any east asian country, germany, or scandinavia makes painfully clear how behind we are in terms of infrastructure. The $800 seems to be a gift to the credit card companies who might get paid where they otherwise would not have.
145 000 000 000 / 360 000 000 = $402.777778 per person, so who gets what and when? Im looking at a 40 year mortgage with zero down and I could use the extra dough for my SUVs DVD player
Maybe some sort of monoline insurer bailout/underwriting by the government to save the muni market?
Congress could take care of that ear mark by ear mark if it gets really bad - no need to blanket all muni's (rich and poor alike) until its evident they really need it.
Maybe something big and drastic to encourage people back into buying houses (double tax deduction on interest, one-time credit, etc).
LOL! We could call that one 'Leave No Bubble Behind'...
You know - good long term policy (fiscal restraint, reasonable but thoroughly enforced regulation & good gov't in general) is probably the best short run stimulus. Bush could try that for once...
If we took the money that we spent in Iraq to pay off every outstanding mortgage in the country, we'd still have half a trillion left over.
I think you've swapped some zeros. Cash outlays directly on the war have been about $600B so far, with long term costs estimated at about $2.4T. Mortgage debt outstanding is around $10T.
Nice sentiment, though.
For other comparisons, $600B would buy about 100 new nuclear reactors, or about 15,000 miles of TGV-style high-speed rail lines.
quick question from an macroeconomic neophyte: how long has the foundation of the US economy been consumer spending and what was it before that?
mojeaux | 01.18.08 - 1:03 pm
Good questions.
1) As we usually think of it, probably the 1920s, as the auto market took off, many consumer durables were invented, and radio provided the beginning of a mass advertising culture.
2) Colonizing the continent, which involved a lot of railroad and town building and related heavy industry. Since it also involved a lot of immigration and household formation and resettlement, there was actually a pretty significant consumer durables consumption component to this movement as well.
Running a distant third in the primaries behind Clintbama.
Edwards' populism is six months too early (or the meltdown six months too late). No one can accuse Americans of looking ahead.
I expect his agenda will be co-opted by the eventual nominee, however, who is apt to have little choice in the matter.
And I agree with you, Gary: our problems can't be fixed by govt.-financed trips to the mall. Better the malls close and that money is spent on a new WPA jobs program.
Is this really true ? I mean, will providing $800 to $1600 per individual/family really solve the fundamental solvency issue in so many leveraged households ?
And O-Joe, whether that's true or not, you are the biggest douche on the entire internet, Perez Hilton included.
Gary | Homepage | 01.18.08 - 2:20 pm | #
I think this quote shows the nature of the fundamental problem with Bush:
I hope he gets a teeshirt that says "I single-handly crippled the greatest country in the history of the world"
nades
The US is not the greatest country in the world let alone history (a completely nonsensical statement). It is just another country (although it may at the moment be the single most powerful country, a completely different thing). Until that fact is accepted Presidents like Bush and Reagan ("shining city on a hill" - what utter bullshit) will continue to be voted in. I'm not American, I'm British and this is also a problem we suffer from (however mixed with a deep national bitterness because it is obvious we are not the greatest country in the world).
First!
1% of actual GDP, or fake GDP as reported by the government?
Yeah, more consumer spending is exactly the thing this country needs.
Where the frack is FDR when you need him?
This is a short term bandaid. Its an election year. Tax cuts of this size need to be paid for somehow. A tax increase will have to follow sometime down the road.
So the Chinese will buy the bonds that we need to sell so that we can give $1600 to folks to buy more stuff made in China. The virtuous cycle continues!
With 90 billion a quarter of direct MEW money to replace, plus all of the other real-estate related money injections, it would seem bubble replacement costs would run $150-$200 billion per quarter.
His $185B covers one quarter, what about the other 3 quarters?
aid will be most effective given to those most in trouble, the poor and working class.
these people barely pay income taxes, so the benefit will never reach them.
His first cut was one of the dumbest cuts this country has ever seen, now he is talking about this. With all the entitlements due for the Baby boomers, I cant help but wonder how and when all these cuts will be paid for?
I seem to recall Bush I doing a tax rebate. Boy, that $300 didn't go to far even back then.
Govt. stimulus is kinda funny to me. Seems like a zero sum game, at some point we have to pay this all back in taxes right?
Regards,
...the road goes on forever and the party never ends
Kett82 - you are spot on with your outlook.
I see CR forgot to mention that we're increasing the price of the newsletter to $800. Now that we know you all have the money.
This will just end up hurting us in the long run. Nobody is thinking about the 8 trillion SS problem or the 42 trillion Medicare and Medicaid problem. so lets cut taxes and put us in deeper long term trouble.
The checks in the mail Tanta.
How many pounds of nickels is $1600 worth?
320
Better call the bank so they are ready for me
Tanta - Unfortunately we dont all qualify for the help. Incomes of 85K and above for single and 110K and above for married will not be eligible for the money.
Tanta, thanks for the reminder!
So much for cutting the "deficit in half" - actually that was dead already as the economy slowed.
Best to all.
They should make an exemption from that rule Brian - anyone who didnt take a mortgage from 2001 to 2008 and doesn't own a house should also get the $800. (Hey, I can try.)
what if the stimulus was to, i don't know, pay back some debt? Wouldn't it be just as good for the credit markets, which seem to be one of the problems, if the U.S. gov't stopped borrowing $400 billion each year? Why doesn't Bush just trust his precious free market to fix this?
These won't have to be paid back. The dirty little secret us youngens have is we're really not going to be paying for the boomers Medicare and Social Security! I mean, crap, they already left us a $9 Trillion debt.
$800! Thank god! Now the bank won't repossess the farm!
$800 won't cut it. Between equity and credit cards, consumers have been overspending by thousands of dollars a year on average. This is, as pointed out above, not going to cut it (I wouldn't call it a drop in the bucket, but the bucket is far from full.)
Congress will probably raise the bet, but it won't work. Consumers are already worried, and I bet that much of the money will simply go to keeping the credit card and mortgage wolves at bay for a month or two.
I dont get anything. What a joke! I guess I need to cancel my order @ Bongs.com
Does everyone in the world (regardless of political affiliation) now agree that the world would be a much better place with out this man...
I'm at a loss for words....
I am feeling strangely exuberant this morning. Must be all that stimulus.
Bush said "Letting Americans keep more of their money should increase consumer spending,"
What he should have said "Letting Americans have future dollars of unknown people today should increase consumer spending," he said.
No to Tax Deferments!
So, not only the worst foreign policy in history, but also the worst fiscal policy in history.
So much damage to repair.
Brian23
"Tax increases down the road..."
God forbid we CUT spending!
So many millions of Americans are in a financial hole that gets deeper every month. The most this "stimulus" will do for them is keep the hole from getting deeper for a month or two. Then life resumes a downward trend.
Expect a lot of this money to be spent on nondurable goods and services: food, rent, health care. I don't see anything constructive here except... well, when you hand people money they stop complaining for a little while. With an election coming up, that's probably as far as Washington thinks.
I was interested to hear Fred Thompson, of all people, say on NPR that there's an argument for "letting it burn:" let the bad mortgages go south, let the economy play itself out. He didn't say he was in favor, just that he said the idea had merit and was worth looking at. I'm not tempted to vote for him still, but that was a bit of fresh air.
Just the word "Package" seems to stimulate some people.
"So, not only the worst foreign policy in history, but also the worst fiscal policy in history."
At least they're consistent!
"The dirty little secret us youngens have is we're really not going to be paying for the boomers Medicare and Social Security!"[ my poor savings account | 12:13 pm]
I'm a boomer, and I hope you can make that stick. No way I support you being saddled with that.
"they already left us a $9 Trillion debt."
Be fair now, we had a little help from Gen X & Gen Y. Half of 'em still think Reagan was good for the country. I just thought he was good for my pocketbook.
GW - "please go buy some Chinese crap so we can exchange it for dollars so they will continue to buy our debt..."
I guess I need to cancel my order @ www.bongs.com
Of course you should. I predict that there will be plenty of government-surplus bongs available soon for real cheap . . .
I hope he gets a teeshirt that says "I single-handly crippled the greatest country in the history of the world"
Let's consume our way out of this mess!!!
Drugs could actually be a pretty valuable commodity soon. People will need a whole lot of induced-happiness to get through this.
"Be fair now, we had a little help from Gen X & Gen Y. Half of 'em still think Reagan was good for the country. "
Yeah, and now it's getting to be "mourning in America."
The Bush Stimulus Package:
Get ready lower and middle class America, your prostate is about to get a hell of a workout.
.... how much booze, I mean, cough syrup can I get for 800 bucks?
you guys here know a lot more about finance, but to me this sounds like it would cost real money
and won't do a bit of good.
Why not give the money directly to bail out Wall St if that is what worries Bush? It would at least make the Dow go up for a few hours (so I can sell) or somethi
And when things are still bad in July, do we double down and send everyone $3200??? Or are we just on our own then?
And why can't we be on our own now?
I know folks who are going to turn around and give that rebate straight back to the government. So... from one kitty to another... unless... unless...
Are we absolutely sure this money isn't going come outta Social Security? That'd be a neat trick.
I thought Social Security was already spent?
i for one would use my 1600 to pay my stupid taxes that i owe since i am renting and have too much income and as a family of 4 claim 0 0 and still owe 2K from 06.
or as someone suggested lowering a credit card bill or student loan..
definatly would not spend it in target!
Dear People of America in the Future,
Sorry, it wasn't my idea.
PS. If you get this message, what is the DOW at where you are?
But I don't get it, if we're not in a recession why do we need a government stimulus proposal. I seem to recall only seeing things like this during recessions.
Sebastian or O-Joe, please help me figure this one out.`
Serious question:
When, exactly, does this stimulus get paid out ... late summer?, early fall?
Paulson: "This (housing) correction was inevitable."
What an ass! He first denied housing was a problem, then he minimized it, and now it was "inevitable".
Unbelievable.
These guys aren't up to the task. A real problem is coming down the road, and these jokesters have nothing to offer.
shouldnt it get adjusted for cost of living? 85k is not a lot of money in nyc... 85k in the midwest is a lot... but they are savers by nature.... this will do no good...
This is what Paulson really said "Just one more year and I can get another job.."
Paulson: "It (the package) should be aimed at consumers and taxpayers."
Great idea. F****ing brilliant.
Now if you targeted tax dodgers or the dead, that would be inappropriate. Not prudent.
My wife are so buying 1600 scratch off tickets...
(hey we have to invest in our future somehow!)
$800? That`s a lot of toilet paper!
err my wife and I...
Well, I've crunched the numbers and this stimulus should pay off roughly .02% of my school debt..woohoo!
I'm buying premium malt liquor tonight!
$800 would not even offset gas and energy costs.
Here's a plan for Bush:
'Sell' Taiwan to the Chinese for one trillion, maybe more. (not really sell, but look the other way) Let the fleeing rich Taiwanese move to the US and buy the surplus houses and maybe bring some factories with them.
US gets some real money to buy itself some time. China gets to dump dollars. Dollar stays afloat.
I don't endorse this but I could see Bush doing it. What's to lose?
"What do you mean by broad-based tax relief?"
Paulson: "It is broad-based tax relief."
Can you put more color on that?
"Getting money out quickly."
Barry Goldwater, please roll over.
Bush's economic stimulus not withstanding any economist will say that Americans have been living better than they should, which is by definition the case when a nationÂ’s total consumption is greater than its total production, as AmericaÂ’s now is.
Without ChinaÂ’s billion dollars a day, the United States could not keep its economy stable or spare the dollar from collapse.
Will the Chinese now use this weapon of mass USA economic destruction now that Bushie boy pushed the panic botton ?
MTHood: what do you mean by more color? looks like PR BS with shades of pure BS
Bush had ideas about the cost of his war for oil in Iraq also, and as some here may realize, those estimates and all thinking related to that insanity remains very suspect!
DH
More Bliiiiiiiiiiing !!!
Seriously, j6p figgers the gubbermint won't let the country down so the stimulus will go to bling. I'm taking bets.
Next stimulus package from the Shrub?
Rectal cattle prod insertion threat.
"Spend or else."
"more color" -- joke from previous threads.
"Spend or else."
This tactica already in force: it's called inflation.
Tanta said:
I see CR forgot to mention that we're increasing the price of the newsletter to $800. Now that we know you all have the money.
hmm, I can't afford that. How about we make a deal?
Let me borrow the money from you at a low ARM rate for 3 months, plus I can pay only 1% whenever I feel like and the extra interest payment just gets added onto the principal owed. At the end of 6 months I'll just pay it back in full, like a balloon. Everybody wins!
Can anyone remember why Bush wasnt impeached or why there never was any discussion of treason in either house; what happened with accountability and reality?
biklett:
The chinese do not have to buy Taiwan. They just have to foreclose on the ARM they wrote for Citibank.
Better plan: Make all elected officials and constitutional officers be jointly and severally liable for the federal deficit.
Make this liability non-dischargeable in bankruptcy.
@FUBAR & WASS, LLP
I like it! Throw in some debtors prisons, and you've got yourself a deal.
Bush wasn't impeached because "he trick-s usss!" is a stupid charge. Intentionally mounting a lying campaign to get the country into a trillion-dollar war is certainly an impeachable act, but the damage has been done and the way things are shaping Bush is going to be the most infamous president in US history, making Nixon and perhaps even Hoover look golden.
World politics nowadays are sad... that's all I gotta say...
This is the lamest, stupidest, most idiotic bullshit I've heard in months -- and that's saying something. Sure, I'll take the money, and I'll send it to Capital One the way I do all the rest of my dough. The last thing I'd ever do is spend it on more cheap Chinese junk (i.e., "consumer goods"). I can't believe anyone hearing of this stimulus package would view it with anything other than contempt.
Things are exponentially worse than anyone with a direct stake in this economy will ever admit, and there isn't any way to fix it. I expect my wife and I to live out my days in a fine abandoned dwelling somewhere in the boonies, surrounded by gardens and a few fruit trees, grateful that at long last the whole stinking shitpile of greed and lies has come tumbling down. I won't miss TV, movies, the Internet, or any of it. All I ask is for a peaceful death in a beautiful place, and THAT is well within my grasp!
I'm already on the edge. You guys with all the play money and the big houses in the city are going to have an infinitely harder time of it, unless you open yourselves to that which hasn't even been imagined yet.
The Chinese don't want to destroy the US, at least not yet. Selling to us is what makes their economy go. They may wish to stimulate internal demand for their products to replace external demand, but that will take some time. For the near future, China needs the US to keep buying , buying, buying.
I want to just point out that my propane bill from Suburban Propane (CNY) was $5 a gallon yesterday.
This ain't gonna do nothin'.
They sell propane in gallons?
Market was up 100 and now it is flat. If the stimulus is suppose to be good, why don't the markets like it? I guess we are all in Argentina and hyperinflation now.
Paulson: "This market needs to correct. We've had unsustainable growth for some time now." Now he tells us!
"The President has been all over this economy." What? Is that like putting food on your family?
The man is loosing it...
They sell propane in gallons?
When you live in rural NY and have a tank hooked to your house, because there is no municipal gas line, then yes they do.
Ahhh, I recall. That's like when I grew up and my parents had this external thingie...damn that was a long time ago. Thanks for the memory job!
Paulson: "This market needs to correct. We've had unsustainable growth for some time now." Now he tells us!
"The President has been all over this economy." What? Is that like putting food on your family?
The man is loosing it...
Carlomagno | 01.18.08 - 12:41 pm | #
there is a word missing between "been" and "all", and it begins with S. I believe it might be a gerund.
I thought Social Security was already spent?
Only if that "Full faith and credit" thingy isn't real.
Actually, Social Security is in pretty good shape -- it will be 2028 before the outlays exceed revenues, and 2042 before the Trust Fund is exhausted.
http://www.cbpp.org/3-23-04socsec.htm
Whenever anyone starts throwing out those 6 trillion or 90 trillion unfunded obligation numbers, notice that they say Social Security AND Medicare.
Medicare is in trouble, but the entire American health care system is broken -- the fix for one will fix the other.
=======
For F's sake, can we get rid of dennisdwuss already?
A line today in Bush's speech: "What this market needs is a shot in the arm."
With all the analogies of a junky in need of a credit fix, I find this line refreshingly honest.
Paulson: "We're gonna run like a bunny."
Was that from Reagan or Lincoln?
I can always count on Bush and Bernanke for a laugh!
We are so F***ING DOOMED!!!
Paulson: "Looking at the long-term, our economy is very healthy ... There's nothing more important for the long-term than making the tax cuts permanent." Puhleeze!
I really think they F-ed up big time with this stimulus idea. The problem is, the factor which will really take this economy down the tubes is consumer and business psychology. When people realize we are really in trouble, they hunker down. Consumers save more, spend less, businesses invest less, hire less - vicious circle. Yeh, we had a few bad months, but weve had them before, and all it took was some kind words, and a few data points that looked ok and we could put our happy caps back on. Now, granted, the chance of this game working further was looking a bit slim, but it was probably a better bet than seeing the gubmint capitulate. I mean, when you announce this type of thing, you are basically reinforcing the believe by consumers that they have to batten down the hatches, and changing the behavior of those who didnt need to pull back. So, my guess, whatever tiny stimulus this produces, is more than paid back by a further pullback by scared consumers.
We are now, officially cooked.
I already have a plan for the money - I'm cashing it in for 16 Benjamins that I'm going to frame and hang on the wall. I'll call it "Stimulating".
You guys should read James Fallows article in the Jan Atlantic Monthly about our mutually assured economic destruction with China.
Inflation keeps their factories open and workers employed. Deflation... did somebody say revolution?
"Dear People of America in the Future,
Sorry, it wasn't my idea.
PS. If you get this message, what is the DOW at where you are?
12th Percentile | 01.18.08 - 12:21 "
Nice!
What we need to fix this economy is a big tax on savings accounts. Stupid people are afraid because of the MSM and are hoarding money.
What's with all the negativity?
Bribing the population with its own money worked last time. That, and a pointless war in the Middle East, and artificially low interest rates, and the largest real estate bubble the world has ever seen. We're well on our way to endless growth!
The risk here is that people will want to save the money instead of spend it. To prevent that, we should issue these rebates in the form of coupons redeemable at popular big box retailers.
"The only Bush I trust...
is my own."
bumper sticker in L.A.
Short sellers, start your engines -- there is some powerful pushback keeping the DOW above the 12,000 floor. The dead cat bounce has arrived.
Is it the republican plan to so bankrupt our country, that we have to abandon most entitlement programs? When Bush was running in 1999, he said we needed a tax cut to "give the surplus back to the people". Then in 2001, "we need a tax cut to get us out of recession". Now, we need another tax cut to help the economy? Of course at the same time, these guys increased spending over 60%!!!
Do stated income borrowers who don't pay taxes or file returns still get the check? They might be the one's who need it most.
I'm with Geoff,
We've had six months of "no recession, no recession, no recession,"
followed by six months of "slow growth and a short credit crunch"
All of the sudden after a 4.9% GDP and some data that confirms the growth at 1% theory, we get absolute panic by the Govt to avert a recession that they don't believe will happen.
They are responding to stock prices....period.
There has been no data that couldn't fit into their theory of a short term slowing followed by growth acceleration in a couple of quarters.
What is gonna happen when the recession is confirmed and the prognosis for a quick recovery looks in doubt?
We are at the latter stages of a drug addiction, where every waking moment is consumed with the thought of what may happen if you can't get that fix.
The risk here is that people will want to save the money instead of spend it. To prevent that, we should issue these rebates in the form of coupons redeemable at popular big box retailers.
hahahahahahaha
They sell propane in gallons?
[Whisper]: shhhh.... he must be the unibomber
Is it the republican plan to so bankrupt our country, that we have to abandon most entitlement programs?
Yes.
as politically unpopular as it would be (probably here not least of all), this is stimulus directed at the wrong party. $145bn directed to recapitalizing dying american banks would possibly do some good -- and that only just possibly.
this, however, is a waste of government debt. with the change in psychology now afoot, it's going to get sent to credit card companies and mortgage servicers to contract money supply when it isn't being hoarded in a savings account so that a bank can hoard it.
Even when I don't have the money to pay my mortage, people are still trying to trick me to give 'em $800.
Love this site, so how about a free one.... eh?
One thing that is a bit scary here is that we're seeing some real bipartisanship on this "stimulus package." Bipartisanship has been as plentiful as california condors up to now. So what gives? My theory is that, behind closed doors, they are getting some awfully scary scenarios from the Wall Street types.
But how could anyone think that handing $800 checks to people will fix anything? This plan is waaaay too brilliant for me to understand.
It's like ethanol and the war in Iraq. It just CAN'T be as stupid as it sounds.
quick question from an macroeconomic neophyte: how long has the foundation of the US economy been consumer spending and what was it before that?
this is, btw, a brilliant time for late changes in the tax code to be delaying 2007 tax refund checks! you can't make this stuff up.
Would be nice if some of the brainpower on this site were to suggest things that might help mitigate the losses and pain rather than simply chronicling the damage and taking photos of the injured.
Come on, smart people, what should Ben and the administration do?
Or, alternatively, what WILL they do?
Maybe some sort of monoline insurer bailout/underwriting by the government to save the muni market? Maybe something big and drastic to encourage people back into buying houses (double tax deduction on interest, one-time credit, etc).
Whatever it is, it needs to be BIG and target the worst drags on the economy and sentiment: credit/solvency of banks, housing values and foreclosures.
The best thing to do is nothing. Let the market work itself out. That's what a free market is supposed to do. When you go monkeying with it, you end up with bubbles like this one, created by Greenspan the Magnificent.
gn - in order to know what to do, you have to first try to say what you are hoping to accomplish. My theory is, we've f-ed up, we've been doing it a long time, and stimulus of this sort, isn't going to change that. We need to take our medicine, and think about the type of economic policies that would produce a better america in a decade. Like, investing in education rather than house remodeling. Or producing things from ideas from skilled engineers and designers, instead of pawning off crap paper as AAA to unwitting investors. Our economy has been largely a joke since 2000. Problem is, it's not funny. Maybe we should think about how to address the entitlement problems we will have in 2018 when Medicare is bankrupt, rather than creating giveaways to the drug companies and lying about the costs (read Medicare plan D). I could go on and on.
What if everyone took their checks to Citibank and cashed them on the same day.
No no no! We're all getting $800 Bank of America gift cards! This is the payback for them saving Countrywide.
On second thought, I want them to pay me in Euros...
So this is HeliBen's plan in action?
At least he saved the FED the cost of renting 1000s of helicopters - IRS will do nicely....
"...A key part of the White House's plan involves income-tax relief, but that leaves out breaks on payroll taxes paid by poorer Americans..."
Is this true? (source marketwatch) No wonder the markets are unimpressed. The peole who actually have "income" on which to pay tax would spend $800 on a nice lunch.
And even if they decided on a payroll tax rebate, by the time the rebate arrives (after it has been through Congress and then the tax authorities) it will be too late. If we have a Katrina-like event, why not take Katrina type action. Give out $800 vouchers for food, heating, shelter. These could be distributed from local schools, libraries, fire stations etc. Cross peoples social security numbers off a municipal list when the money is given out. Better still, give it out on 5 Feb when people show up for primaries voting - added benefit of getting lots of peple out to vote!
I mean really, ther's got to be a better solution...
And I always thought posters here were in favor of giving the money to the people instead of the government. So when Pres. Bush does exactly that, it's wrong again? Must be something personal.
O-Joe
So many desperate sounding voices as the US consumption based economy takes a little breather.
$800 tax rebate is a marketing ploy that will have a "surge" component down the road like the TAF ceilings, no?
What would a more production based US economy look like?
What can we produce for China, India and the under-developed (fuggedabout the underpaid/overproductive aspect) consumers of the world?
The counterparty risk where your partner folds has gone global here, yes? The transnationals are so successful, they are threatening their major host.
gn,
Do NOTHING! Just run the damn government. Take in enough taxes to provide the services we want. That's it.
Its like a parent wondering what they can do to help a junky child. Whatever you did to get them there doesn't mean you have the ability to save him.
Stop enabling him.
As soon as the junkie knows that only he can and will save himself, then a hope for recovery begins.
Well I just checked my mail...not there yet....checked my checking account...nope no EFT!.....What a maroon!
Well, $1600 will pay my mortgage for a month.
O-Joe, I don't want to pay more taxes than I do. But I would be happy if the taxes I do pay went to paying for a balanced budget and not some give away that many on this site will not even qualify for.
For a good summary of what various policies would do to stimulate the economy, go to http:/www.cbo.gov//ftpdocs/88xx/doc8893/blog-econstimulustable.htm
Two things they could do to put money in the hands of those who would spend in on the economy would be to stop taxing unemployment compensation and social security retirement benefits.
I mean do you REALLY consider either of those to be "income" in the usual sense? If so, why not start taxing the patient for the amounts paid to the medicare doctor or hospital?
I'm stashing my $300 under my bed.
gn,
One program I saw recommended elsewhere seems to me to have merit.
Congress could authorize somewhat less pinchpenny and brief federal unemployment compensation. In terms of addressing real misery, this administration could do far worse.
People who haven't been greatly affected by recent events (or events to come) would, I think, appreciate seeing something being done for those who have.
In fact my lazy, dope smokin, slacker, debt whorin, bk filin cousins will be gettin $800 each to go get some pot, a tattoo or a Sony Playstation while I actually pay taxes.
BTW, DING! We have a winner! And it's Average Joe!
"They are responding to stock prices....period."
And there you have it. Doesnt matter to them until it might possibly result in something that hurts his peeps, the wealthy. Keep that market propped.
Second place : " My theory is that, behind closed doors, they are getting some awfully scary scenarios from the Wall Street types." - thank you Mr Stark.
Third place : TBA
OMG I sound like a bleeding heart liberal. So let me just add that in order to collect your $800 you have to bring mortgage documentation and pay stubs and if you committed mortgage FRAUD you do not get your $800. Let them eat baloney.
oh whoops sorry, I meant $800
But I still would rather have Ben fly the helicopter down personally and drop it in cash. Way more fun.
Optimistic Joe,
Where do you think this money is coming from? our vast reserves of cash?
This is another borrow and spend tactic that has a long history of failure.
The government will sell more treasuries to the Chinese, so they can send us all checks, so we can go out and buy more Chinese goods (as hopeinsd mentioned).
At best, this will only postpone a severe correction that everyone agrees needs to occur.
Here's a grownup stimulus package:
Take steps to encourage business investment (in the United States) and shovel money to cities and states and counties to fix roads, bridges, schools, whatever.
In other words: let's INVEST that $150 million in hopes of getting a future return. How can SPENDING this money fix our problem?
This will end up like the Super SIV and Hope Now. Tied up by election year government bickering until it's either so watered down its impotent, or so late that a new government is in place and is changed, or until another bigger emergency comes along that distracts the government like glittery wool does a kitten.
Stimulus?
BOHICA.
The only question is on what POS to buy puts on with my $1,600 windfall
Dope Now
110K upper limit for married couples? That's not going to do so much in California, I think. It seems to me many double income couples would be well above this figure here.
Why are so many commentators unpersuaded that they won't get a refund ? Most here file taxes and actually have taxes exceeding 800 per person ( 1600 per couple ) they pay don't they and the best read I have on this is that this category will get a refund ?
The fight should be on whether or not to extend it to those who just file taxes but don't actually pay any tax. That is a real handout( though there is no such thing - its always paid for someway) - the first scenario is just giving you back your money.
Then there's the real fight on food stamps and extending unemployment benefit.
-K
With my rebate I will be going long on ammunition and canned food.
O-Joe and gn,
Well, let's see, what should we do to fix the problems we face?
First let's define the problems: (1) house prices in the stratosphere, coming back down to earth. (2) Consumers realizing they spent more than they can ever pay back, even under ideal economic conditions. (3) Loose monetary and fiscal policies, with lax regulation that caused both of the first problems...
I propose a solution: Attack problem #3 instead of its symptoms (problems #1 and #2).
Where's the Grift in paying into the irs , then getting the rebate back?
How expensive is it to implement said program?
why don't we just all start over? Can we get the caribbean banks and CHina to go along?
John Stark good point. Maybe one of the presidential candidates will propose a public works plan to bail out the constuction industry.
Remember the debates on this board about how to implement Hope Now and who should get it. Same thing happening again. They're going to come up with some "formula" on who will get the funds and it will end up being a couple of hundred people. Everyone will lose interest and the markets will continue down but they will have at least bought a few weeks till the next rate cut as well as created the appearance of actually doing something.
An admission that $800 dollar's will solve the masses food&gas problem that has'nt been inflating , according to the latest cpi data.
And I always thought posters here were in favor of giving the money to the people instead of the government. So when Pres. Bush does exactly that, it's wrong again? Must be something personal.
O-Joe
Optimistic Joe
i traced o-joe's connection
he's at AEI in washington
My key issue is that borrowing and spending got us where we are. What is this tax rebate thing but much more of the same?
We need to invest, invest, invest: in our roads and bridges, our telecommunications system, our kids, our environment, new technologies that reduce energy consumption...add your own favorites.
Saving and investing means we have less money to spend right now on granite counter tops, trips to Hawaii, home theater systems, i-phones, wii, and so on. That likely means huge dislocations in economic sectors that employ a lot of people here and elsewhere. Let's not minimize the pain involved in making this transition. But we need to focus on the pain that will be involved in NOT making it. We can decide to make this transition in an orderly way, or the transition will make US, in a way that guarantees maximum pain and disruption.
It seems as though we have gotten past the point where we are willing to think and act like grownups. We just keep stamping our feet, holding our breath and screaming for more, and our leaders scramble to give it to us.
How about a choice of either $800 cash or a chit for 200 gallons of gasoline good for 1 year.
Add a little more excitement to the rebate for house flippers who have nothing going on these days.
Data Hacker - whocoodanode? I mean, who couldaeventhunk?
gn | 01.18.08 - 1:07 pm |# said,
"Would be nice if some of the brainpower on this site were to suggest things that might help mitigate the losses and pain rather than simply chronicling the damage and taking photos of the injured."
fair challenge:
rebating money to the general population will help the economy like another shot of heroine to an addict.
giving money to the top 1%..the high rollers will result in a very large portion being invested abroad...not much help at home (even boeing airplanes are largely outsourced).
unless, we require:
domestic investment in a "Manhattan project" directed at 21st century transportation infrastructure and an alternative energy infrastructure develoment program that centers around hydrogen production from water using electricity generated from:
hydrogen can power fuel cells or be burned in an engine as designed to burn ethanol or gasoline.
"a chit for 200 gallons of gasoline good for 1 year."
Then release oil from the SPR. Would make GS smile.
I like Hillary's idea of heating oil subsidies.
There's nothing we need more now than subsidizing energy use and stimulating the (Saudi Arabian) economy.
data hacker, please tell me you are serious and not kidding about O-Joe. It would explain everything.
And O-Joe, whether that's true or not, you are the biggest douche on the entire internet, Perez Hilton included.
Q1) The vast majority of US government debt is owned by?
Q1B) The largest part of US debt held by foreigners is held by those from what nation?
Mock turtle...would have been great if we had actual leadership...7 years ago.
Mock turtle...yes, decent idea. Some have even proposed that "sustainability" could be the next bubble.
Not sure we'll be so lucky.
A1) The vast majority of US government debt is owned by US government.
A1B) The largest part of US debt held by foreigners is held by those from Japan?
When they said everyone gets $800, the way these guys burn money, I thought it was gonna be $800,000. That might have helped some. Anyone have any suggestions on whose picture is gonna be on the first million dollar bill Ben prints?
We as a nation would be better off putting the money in FDIC's insurance fund. We are going to need it to cover insured and uninsured deposits.
I guess that japan and China are the two largest holders of us gov debt that is not held by us citizens, domestic corporations.
Have any of you seen this?
LaRouche Webcast: Six Months Into The Greatest Financial Crash Ever | LaRouchePAC
What do you think of the protection legislation for banks and homeowners?
If you children would read history, which, of course, you won't do, you'd find that nothing Roosevelt did worked either.
The only thing that ended the Depression was WWII.
"We as a nation would be better off putting the money in FDIC's insurance fund. We are going to need it to cover insured and uninsured deposits."
FFDIC, why should we cover uninsured deposits? Am I misunderstanding something?
i traced o-joe's connection
he's at AEI in washington
Data Hacker
What is AEI?
O-Joe
I yield to no man in my contempt for George W Bush. I've been railing about his lack of intelligence, character, judgment, integrity and candor ever since right wingers first brought his name forward in the late 1990s. To some extent it pleases me no end to see dozens of folks piling on to put the boots to the guy -- and no one defending him.
But y'know what. This isn't that bad a plan. It puts a reasonable amount of money into the hands of people that mostly will spend it. The business tax incentives look to be temporary -- use em or lose em. Compared to the utter lunacies like the first term tax cuts, deciding to nation build instead of capturing bin Laden, and the Iraq debacle, this is quite sane and moderate. In the bad old days, he'd have proposed a cut in the corporate income tax, another cut in capital gains taxes, invading Alberta and a free HDTV set for every American. (And yeah, a pony too).
The real problem is that we don't really understand what the problem is so we don't know if fiscal stimulus is needed. Would it be possible for the idiots on the right to quit lying and quit telling us everything is OK; the real economists to quit saying I told you so; the money men to quit saying things are under control; the MSM to take a few days of their lives and actually learn something; the candidates to stop posturing; and the Bush haters to simmer down until we can get around to setting up a war crimes tribunal?
Then maybe we could start trying to figure out exactly where the US stands and what needs to be done. If we actually need a stimulus package to preserve a few jobs, we might be able to live with this.
Roundabout: I'm not sure that World War III would have the same salutary economic effect.
BTW, I'm mad at the people who promised me a dead-cat bounce in the market today.
But I never really understood that expression. Dead cats don't bounce worth a darn.
Headline of article by AP:
"Stocks Fall After Bush Announces Plan"
LOL
"The consumer is very cautious," says Trudy Sullivan, chief executive officer at clothing retailer Talbots Inc., which will pare store inventories by 7% to 8% this year and use more frequent markdowns. Retailers haven't faced so many difficulties since the deep economic downturn of 1990-1991 pushed many off track.
An expected 4% sales increase for the November-December holiday period at stores open at least a year rang in at only 3% compared with the 2006 holidays
roundabout...what FDR did during the great depression was a help...he expanded aggregate demand. (people also got work and got to feed their families) unfortunately he was a tad too timid in his actions,for the remedy to work rapidly. the war obviously did the rest, but that was the same prescription.
o joe...i think AEI stands for American enterprise institute...a conservative think tank in DC.
Also, Roundabout, while it is true that the New Deal didn't end the depression, it did change the psychology, giving people some hope. It helped to stave off political movements (huey long, dr. townsend) who were mobilizing millions of followers by promising to give everyone money.
That's in the history books too.
Today, giving out money to everyone appears to be the default setting for government. Even Republicans.
o joe...you should know...kinda has a nice ring to it.
now don't play us anymore ok?
Is this rebate optional?
Re: President Bush said any plan should feature "direct and rapid income tax relief" to boost consumer spending. "Letting Americans keep more of their own money should increase consumer spending, and lift our economy at a time when people otherwise might spend less."
Last time this happened, didnt you have pay it back or declare it as income or something; Im fuzzy on the first Bush tax cut by the 2nd Son. Seems it would be simple to just declare that when you send in your taxes, that you will either subtract a few hundred or sign on to have a check sent to you after you file; is that too easy?
I for one would be all for a massive public works program incorporating investment in public infrastructure, including areas listed by mock turtle and other clean technologies. This would put real money in the hands of people most likely to spend it, and at the same time yield long term savings through the improvements in infrastructure. A visit to any east asian country, germany, or scandinavia makes painfully clear how behind we are in terms of infrastructure. The $800 seems to be a gift to the credit card companies who might get paid where they otherwise would not have.
John Stark , you are on target. Roosevelt's actions saved capitalism by finding middle ground and stemming social destruction.
let's face it Capitalism is like a powerful thoroughbred horse...you want it too run fast but a good jockey is needed to keep it on track.
Reasonable levels of regulation.
$145 Billion for what, 360 million people?
145 000 000 000 / 360 000 000 = $402.777778 per person, so who gets what and when? Im looking at a 40 year mortgage with zero down and I could use the extra dough for my SUVs DVD player
If we took the money that we spent in Iraq to pay off every outstanding mortgage in the country, we'd still have half a trillion left over.
Heck of a job, Bushie!
MR turtle , is mock your name? B?
Maybe some sort of monoline insurer bailout/underwriting by the government to save the muni market?
Congress could take care of that ear mark by ear mark if it gets really bad - no need to blanket all muni's (rich and poor alike) until its evident they really need it.
Maybe something big and drastic to encourage people back into buying houses (double tax deduction on interest, one-time credit, etc).
LOL! We could call that one 'Leave No Bubble Behind'...
You know - good long term policy (fiscal restraint, reasonable but thoroughly enforced regulation & good gov't in general) is probably the best short run stimulus. Bush could try that for once...
Today, giving out money to everyone appears to be the default setting for government. Even Republicans.
John Stark | 01.18.08 - 2:49 pm | #
That's because dope is illegal. You know... Dope get you through times of no money better than money gets you through times of no dope.
That was half sarcastic, half painfully serious.
If we took the money that we spent in Iraq to pay off every outstanding mortgage in the country, we'd still have half a trillion left over.
I think you've swapped some zeros. Cash outlays directly on the war have been about $600B so far, with long term costs estimated at about $2.4T. Mortgage debt outstanding is around $10T.
Nice sentiment, though.
For other comparisons, $600B would buy about 100 new nuclear reactors, or about 15,000 miles of TGV-style high-speed rail lines.
Leave No Bubble Behind
hehehe
Put in to infrastructure and high-speed rail so we'll be able to sleep under safe new bridges.
Data Hacker
there was a time i posted always under my "real" name.
this cost me at work.
mock turtle is not who i am....it is what i am.
my $800 is going towards a quarter pound of sticky-icky to keep my bong full for the year!!! thanks gwb, heli-ben and hanky-panky!
I feel like I'm watching a slow-motion train wreck.
Guess I'll just use the $800 to buy more PMs.
18 wheelers are rolling into a Walmart near you...loaded with plasma TVs priced at $799 and $1599. Heh.
That's because dope is illegal. You know... Dope get you through times of no money better than money gets you through times of no dope.
That was half sarcastic, half painfully serious.
Dryfly | 01.18.08 - 3:17 pm | #
Aha ,
Dryfly is really . . .
"Free Wheelin' Franklin"
quick question from an macroeconomic neophyte: how long has the foundation of the US economy been consumer spending and what was it before that?
mojeaux | 01.18.08 - 1:03 pm
Good questions.
1) As we usually think of it, probably the 1920s, as the auto market took off, many consumer durables were invented, and radio provided the beginning of a mass advertising culture.
2) Colonizing the continent, which involved a lot of railroad and town building and related heavy industry. Since it also involved a lot of immigration and household formation and resettlement, there was actually a pretty significant consumer durables consumption component to this movement as well.
Where the frack is FDR when you need him?
Running a distant third in the primaries behind Clintbama.
Edwards' populism is six months too early (or the meltdown six months too late). No one can accuse Americans of looking ahead.
I expect his agenda will be co-opted by the eventual nominee, however, who is apt to have little choice in the matter.
And I agree with you, Gary: our problems can't be fixed by govt.-financed trips to the mall. Better the malls close and that money is spent on a new WPA jobs program.
Is this really true ? I mean, will providing $800 to $1600 per individual/family really solve the fundamental solvency issue in so many leveraged households ?
And O-Joe, whether that's true or not, you are the biggest douche on the entire internet, Perez Hilton included.
Gary | Homepage | 01.18.08 - 2:20 pm | #
And if anybody knows douches, it's him.
If we took the money that we spent in Iraq to pay off every outstanding mortgage in the country, we'd still have half a trillion left over.
Not even close, you're off by a few orders of magnitude. But hey, all it takes to make facts on the internet is a submit button, right?
I think this quote shows the nature of the fundamental problem with Bush:
I hope he gets a teeshirt that says "I single-handly crippled the greatest country in the history of the world"
nades
The US is not the greatest country in the world let alone history (a completely nonsensical statement). It is just another country (although it may at the moment be the single most powerful country, a completely different thing). Until that fact is accepted Presidents like Bush and Reagan ("shining city on a hill" - what utter bullshit) will continue to be voted in. I'm not American, I'm British and this is also a problem we suffer from (however mixed with a deep national bitterness because it is obvious we are not the greatest country in the world).
Here is what we have done to the U.S. Economy since 1980:
In 1980 our entire national debt was 832 billion.
In 1980 our yearly trade deficit was -19 Billion.
In 2008 here is how bad it has gotten:
A. Our national debt is now 9 Trillion
B. Our annual trade deficit is now -800 Billion.
We have not had a trade surpus with the world since 1974. We have not had a trade surplus with Japan since April, 1976.
Do you think a tax cut is the answer? Folks, we need industrial output. Not tax cuts!
What say you?
Regards,
Ames Tiedema