[ezkcdude]

Originally Posted by Brave Ulysses Actually he articulated his thoughts and provided valid logic and reason. You on the other hand were channeling a liberal Dick Cheney.

...things I've been saying in my "real life" - not on this forum.

[cosus]

Originally Posted by Brave Ulysses Actually he articulated his thoughts and provided valid logic and reason. You on the other hand were channeling a liberal Dick Cheney.

Low blow!

[JohnnyTheA]

Originally Posted by ezkcdude Frankly, I don't give a damn about how the deals get done - as long as the bills produced help the American people.

Originally Posted by alcimedes Welcome to the exact argument that gave us the Patriot Act, Guantanamo Bay, warrentless wiretapping etc.

How about welfare, public "project" housing, No Child Left Behind... Those make the point a little better. We don't really know all of the details concerning national security. If we did there is a chance that the Pat Act, Gitmo, etc.. make ALOT of sense. Nobody knows for certain... While a welfare state to "help" the people is pretty clearly a possibility in Stim Plan..

JTA

[JohnnyTheA]

Originally Posted by Taskiss Doing anything other than handing it back to the folks they took it from is disingenuous, but take what I've written with a grain of salt - I'm one that feels the best thing to do is to do nothing. Don't bail out a thing, let equilibrium reign.

But wait... we have to do something. Otherwise we blow a huge chance for "Change" -> http://www.usnews.com/blogs/capital-...-delusion.html

"White House Chief of Staff Rahm Emanuel said last month, "You never want a serious crisis to go to waste. This crisis provides the opportunity for us to do things that you could not do before."

So while it probably WOULD be a good idea to let everything crash and auto-adjust, we would miss an opportunity to pass all kinds of new laws that the people would otherwise never want..


JTA

[ezkcdude]

Originally Posted by JohnnyTheA We don't really know all of the details concerning THE ECONOMY. If we did there is a chance that the STIMULUS, TARP, ETC make ALOT of sense. Nobody knows for certain... JTA

Wow, what a great argument.

[ronmexico]

Originally Posted by ezkcdude What would an "incentive base plan" look like?

This article articulates my thoughts on incentives.

[ezkcdude]

Originally Posted by ronmexico This article articulates my thoughts on incentives.

In their conclusion, they don't seem to really support anything besides monetary policy (already happening) and eliminating state sales tax, which is wishful thinking - and I would argue would have negative effects. The states would lose so much revenue, that they would incur even more debt and have to cut employment even further.

[Chinney]

Originally Posted by Taskiss The amount I'm hearing being bandied about is $10,520 per family. So, in my opinion, the Government could do lots worse that just hand the money directly back to the people. Just write a tax rebate check for $10,000.00 to every head of household. Artificially propping up banks or the Auto manufacturers seems short sighted - let the people decide. If US autos are worth keeping around, then so be it, vote with your money and use the cash to buy a car. If, instead, folks put their money in the bank, why, then the banks get bailed out. If folks pay off their bills then I guess the will of the people is that financial responsibility is the order of the day. Doing anything other than handing it back to the folks they took it from is disingenuous, but take what I've written with a grain of salt - I'm one that feels the best thing to do is to do nothing. Don't bail out a thing, let equilibrium reign.

"Let equilibrium reign" was what happened in the early 1930s. A lot of economists - not all, mind you - think that we can do better now. The contrary view of the 1930s is that government intervention in the 1930s actually held back the recovery then. That's a minority viewpoint though, among economists. But economics is far from an exact science. My own best guess is that the majority is right on this point.

If you are going to stimulate, I am not sure that tax incentive spending is the best method in current circumstances. Right now, it it necessary to get that money circulating through the domestic economy. People are not spending right now...and those tax incentives are not going to do the trick. To the extent that they do spend, spending on discount goods from Walmart (who are doing well right now) is not going to do the trick either. Anyway, North Americans are full to the brim with consumer goods. What is actually needed - even aside from the recession - is some spending on some public infrastructure in a whole bunch of areas: energy, transportation, environment and health care. Public infrastructure is something people need to buy just as much or - I would argue, right now - more than on some more flat screen TVs. Pervasive anti-government animus has blinded people to the real need to purchase these public goods.

That's not to say that the government money should be just blindly spent. It should be spent on things that will provide some long-term benefit to the economy beyond the immediate stimulus. I must say that that a deterioration in public governance abilities - partly due to a diminished understanding and valuation of the importance played by smart, capable and honest public service (see anti-government animus above) - leaves a real risk that the money will not be well spent, Obama or no.

[ezkcdude]

Originally Posted by Chinney That's not to say that the government money should be just blindly spent. It should be spent on things that will provide some long-term benefit to the economy beyond the immediate stimulus. I must say that that a deterioration in public governance abilities - partly due to a diminished understanding and valuation of the importance played by smart, capable and honest public service (see anti-government animus above) - leaves a real risk that the money will not be well spent, Obama or no.

The NIH, FDA, and SEC all suffered terribly under eight years of GOP rule, and we are paying the consequences - from E coli and Salmonella outbreaks to Bernie Madoff to the financial crisis, not to mention stagnating medical research. I'm very pleased that the NIH, and to lesser extent NSF, are getting a much needed infusion of cash through the stimulus package. Hopefully, the FDA and SEC will be overhauled within Obama's first term.

[Banana]

Um, SEC had its budget doubled and hired lot more backwatchers after the Enron affairs and was given much more regulatory powers thanks to Oaxley act. In spite of all this, SEC was advised by Madoff. My earlier point stands: when you create an regulatory agency, you've created an avenue of bribery, corruption and manipulation.

As for "stimulating", I think we have to consider the fact that even if somehow we got the money for free, we still have to buy some kind of goods with it.

Consider for a moment I've suddenly been given $10,000. I decide I want to buy as many as TVs I can get with the money so I can watch reality shows and home makeovers. I run over to Best Buy and proceed to immediately buy 108 TV off their hands. Assuming BB is the only store in reasonable distance, I've already cleared the market of all TV but I actually need 218. It should be obvious by then no matter how I bully the BB manager, he cannot acquire any more TVs until he calls the HQ and tells there's a TV-buying frenzy, and HQ has to push their suppliers to hurry up with the production of more TV and get it to store sooner. The suppliers, given scarce resources decides to allocate more of their labor from microwaves to TVs in anticipate of "rising demand" (that's just me, by all my lonesome self). After few months, they make 500 more TVs above the usual production but in order to meet that demand they had to produce 1000 less microwaves. I buy the remainder and go home happy, blissfully ignorant of the 300+ glut of TVs that doesn't get bought because nobody else but me wanted it, while other families who are struggling needs to buy microwaves find themselves paying more for less microwave or may not even be able to afford one at all due to reduced supply and thus increased price upon microwaves. The overall result is I "stimulated" economy by creating more gluts and taking resources away from what was actually needed for most people toward my "benevolent" aim.

I suppose some will complain that my example was oversimplified, factually incorrect or such, but this is what economists do talk about in their econo-speak "crowding out private investment with government spending". Most economists wouldn't even recommend the plan in good times, for that reason. Of course, Keynesian economists (or at least those who has some Keynesian tendencies) will say depressions, recessions and downturn are an exception because of nobody's spending as much as they were and that creates a "glut" of goods that was produced too late and wasn't wanted.

Even granting that assertion, we do have to concede that we would have to be specific in how we buy up the goods, targeting only those that are in glut and not those that are in demand. This is not what stimulus plan will do; it's just brandying money all around to politicians' BFF and their BFFs.

Any economists, even most Keynesian ones will concede that command economy is doomed to fail because of information problem, as proved by F.A. Hayek. If we cannot have adequate information to address and correct the "problem" caused by free market, how could we hope that the package will work this time around? This is even more important when we consider that we've already done all creative things to jiggle the economy. We already had bailout plan with its TARP, tax checks, bailout of various industries *Both* parties got their versions of the "fix". *Both* parties passed it, and *both* failed miserably. Let me assert: Bailing out or stimulating only begets more of the same. The only thing we haven't done in recent years is not doing anything at all or even better yet taking more drastic to strip away all anti-free market measures so we can have something that's *actually* a free market, as opposed to mixed economy, which is what we had for decades.

[ezkcdude]

Originally Posted by Banana I suppose some will complain that my example was oversimplified, factually incorrect or such, but

Yeah, some of us care about these little details. Crazy, I know.

[JohnnyTheA]

Originally Posted by JohnnyTheA We don't really know all of the details concerning national security. If we did there is a chance that the Pat Act, Gitmo, etc.. make ALOT of sense. Nobody knows for certain...

Originally Posted by ezkcdude Wow, what a great argument.

Thanks, you see my point. That knee-jerk big government responses to either national security or the economy can have unintended consequences and that these things really need to be thought out AND actually "read" by our senators and representatives. The later isn't happening this time. This bill could really do a lot of harm if it is not done right. Whether it is or not, I really don't know. Economics is not my field. BUT rushing to vote ANYTHING that will (and I quote you) "help the people" is not a good idea... It has been repeated in other countries with bad results.

JTA

[ronmexico]

Anyone else concerned about the lack of bipartisanship and haste this bill was put together and signed?

[billybobsky]

Originally Posted by ronmexico Anyone else concerned about the lack of bipartisanship and haste this bill was put together and signed?

We don't really have the time to doddle...

As for lack of bipartisanship -- I don't think either political party made a good faith effort -- Obama tried...

[JohnnyTheA]

Originally Posted by billybobsky We don't really have the time to doddle...

Regardless of the details of the bill, it will take MONTHS for the wheels of the federal government to start churning out money to actual people (in the form of jobs). Hashing out the details of the bill and actually reading it out so people can reconsider their vote would be a good thing... This is the LARGEST spending bill of any government in history. It will put us much further into debt that we already are. Not reading the fine-print of mortgages is part of what got us into this mess. DC seems to be repeating the same flaw... Put the DETAILS on the web. What they probably don't want people seeing is that the spending ultimately gets down to specific senatorial and congressional districts (the power brokers) rather than the parts of the economy that really need it. That is what usually happens...

JTA

[ezkcdude]

Originally Posted by JohnnyTheA Put the DETAILS on the web. What they probably don't want people seeing is that the spending ultimately gets down to specific senatorial and congressional districts (the power brokers) rather than the parts of the economy that really need it. That is what usually happens... JTA

I guess you haven't actually been listening to Obama. He's repeatedly said the details of how the money is spent will be put on a website.

[JohnnyTheA]

Originally Posted by ezkcdude I guess you haven't actually been listening to Obama. He's repeatedly said the details of how the money is spent will be put on a website.

Yes, after the bill has passed though....

JTA

[ezkcdude]

Originally Posted by JohnnyTheA Yes, after the bill has passed though.... JTA

Some details won't be known until the law becomes enacted. For example, if I get a grant from NIH this year, how could Obama know that now? Answer: he couldn't. The website Obama has mentioned will be for cataloging those details (according to my understanding).

The text of the bill is online now, and has been the whole time - if you're not too lazy to look it up yourself.

[billybobsky]

Originally Posted by JohnnyTheA Regardless of the details of the bill, it will take MONTHS for the wheels of the federal government to start churning out money to actual people (in the form of jobs). Hashing out the details of the bill and actually reading it out so people can reconsider their vote would be a good thing... This is the LARGEST spending bill of any government in history. It will put us much further into debt that we already are. Not reading the fine-print of mortgages is part of what got us into this mess. DC seems to be repeating the same flaw... Put the DETAILS on the web. What they probably don't want people seeing is that the spending ultimately gets down to specific senatorial and congressional districts (the power brokers) rather than the parts of the economy that really need it. That is what usually happens... JTA

Here's the thing...

The alternative being only tax cuts wouldn't have changed the impact to the economy (it likely would have been less potent), but would have driven (should they have been made permanent) the debt even higher... Let's think about this for a second -- we are going to go into debt either way; one method is a one time lump sum of expenditure, the other is a slow bleeding of tax revenue for all of time. Only one of these is responsible in this context...

[ezkcdude]

On Meet The Press today, one of the panelists was saying that McCain and many other Republicans voted for an amendment that would cut taxes such that it would cost $2.5 trillion dollars over the next 10 years! The fact that McCain went around saying we're burdening future generations with debt, when they are voting for those kinds of tax cuts. The amendment would have lowered the top marginal rate to 25%. Gimme a break.

[Brave Ulysses]

Originally Posted by ezkcdude On Meet The Press today, one of the panelists was saying that McCain and many other Republicans voted for an amendment that would cut taxes such that it would cost $2.5 trillion dollars over the next 10 years! The fact that McCain went around saying we're burdening future generations with debt, when they are voting for those kinds of tax cuts. The amendment would have lowered the top marginal rate to 25%. Gimme a break.

And then also on Meet the Press, since that's what you want to pull tidbits from, immediately after that panelists said that, another panelists asked why would you call McCain a hypocrite about that and then use that as justification for adding just as much to the deficit as McCain would.

You attack republicans for spending, and your answer is to spend more.

Doesn't make much sense... at least... if that's how you are going to argue.

Some details won't be known until the law becomes enacted. For example, if I get a grant from NIH this year, how could Obama know that now? Answer: he couldn't. The website Obama has mentioned will be for cataloging those details (according to my understanding). The text of the bill is online now, and has been the whole time - if you're not too lazy to look it up yourself.

You are exhibiting an awful lot of blind faith here.

[ezkcdude]

Originally Posted by Brave Ulysses You attack republicans for spending, and your answer is to spend more. Doesn't make much sense... at least... if that's how you are going to argue.

I attack Republicans for spending when it wasn't necessary. And now that the spending is necessary, they've suddenly got religion on the subject.

[Taskiss]

What evidence ... anything ... suggests spending more money, when the problem is the tons of bad debt already, will have any benefit?

The reality is, throwing money at problems is the ONLY thing the gov can do, so when you have a big problem, throw big money at it!

It the same reasoning that when all you have is a hammer, you treat everything like a nail.

[ronmexico]

Originally Posted by Taskiss What evidence ... anything ... suggests spending more money, when the problem is the tons of bad debt already, will have any benefit? The reality is, throwing money at problems is the ONLY thing the gov can do, so when you have a big problem, throw big money at it! It the same reasoning that when all you have is a hammer, you treat everything like a nail.

Well said!

[ezkcdude]

Originally Posted by Taskiss What evidence ... anything ... suggests spending more money, when the problem is the tons of bad debt already, will have any benefit?

When you say "the problem", what are you referring to exactly? The financial crisis we are in was not caused by our national debt, if that's what you're implying. Or maybe you're just trying to change/avoid the subject?

[JohnnyTheA]

Originally Posted by ezkcdude The text of the bill is online now, and has been the whole time - if you're not too lazy to look it up yourself.

Here is some:

SEC. 1605.... None of the funds appro-
6 priated or othenvise made available by this Act may b~
7 used for a project for the construction, alteration, mainte-
8 nance, or repair of' a public building or public ,~rork unless
9 all of the iron, steel, and manufactured goods used in the
10 project are produced in the United States.


Why just an exclusion for Steel?

Seems like protectionism to me. Hopefully other countries don't pass similar measures...

If you want some of this money for building projects, you will basically HAVE TO hire union employees. Not exactly cost-effective. But cost-effectiveness is not what they are after.

I looked A LOT at both Div A and B of the bill (I probably now know more about this than most congressmen) and it really just looks like they are doing the things they already do but hugely increasing the amount of money they use for it. Most of the money goes directly to the state governments who funnel it through their own red tape. I like the idea of "direct-to-tax-payer" relief. They are not set up for that. There will be so many layers of government between the actual money spent and the people who need the money (or job, or whatever)... I suppose we can't expect any better..

Tax relief is better because it goes right to the people who create the jobs. There is "some" of that in the bill as well...

There are also some things (like expenses for buildings for the various departments) that should normally be part of the budget. So they overrun on the "normal" money and then use this crisis to bail them (the government) out..

Its as I expected. If you work for any government or belong to an construction union, you will like this bill. Otherwise, you will just notice future tax obligations going up to pay for this...

Its hard to argue ALL of the bill. There is something there for everyone..

JTA

[Brave Ulysses]

Originally Posted by ezkcdude When you say "the problem", what are you referring to exactly? The financial crisis we are in was not caused by our national debt, if that's what you're implying. Or maybe you're just trying to change/avoid the subject?

Do you not realize that the government is now moving towards doing on a macro scale what got the country into this problem on a micro scale?

That's what I find most amusing about this. I just can't see how anyone can honestly criticize the bad loans and credit markets and borrowing and mortgages that people couldn't afford, and then be 100% no questions asked in favor of doing the same exact thing at the federal government level.

Reality is going to hurt really bad when China cuts us off and goes through virtually the same thing American banks are going through.

[JohnnyTheA]

Originally Posted by Brave Ulysses Do you not realize that the government is now moving towards doing on a macro scale what got the country into this problem on a micro scale?

Well said. It was out of control consumer spending and borrowing that drove the prices of homes so high (way above the earning power of many many folks) and the consumer economy so frothy. I mean if a given neighbor hood has a median income of X and a median home price of Y, you would expect the same ration of X to Y to be retained as time goes on. Instead, people's incomes were increased say... 30% over 5 years but home prices in some areas tripled. That is not normal for a normal free market. The market was manipulated by government (starting in the 90s not with Bush) so "everyone could own a home". Bush didn't help. His guys didn't do the job of regulating what rules were still there.

So to fix it, they are going to NOW shift the spending to the federal level to keep the train rolling alone at, hopefully, the same speed.

I think that it really might be better to let everything crash real hard and build things back up to sustainable levels. It might be more painful in the short term but we would recover must faster. I'd be more in favor of some sort of temporary high-grade unemployment for people to help weather the storm than what they are doing now. I worry that what they are doing is prolonging the inevitable and ultimately making things even worse later on AND even when things finally DO recover, we will have inflation to deal with because of those dollars we have put into the economy.... Home prices HAVE to get back to the X to Y ratio.

I will end with a GREAT Ben Franklin Quote:

When the people find that they can vote themselves money, that will herald the end of the republic.

Lets hope not this time...

JTA

[ezkcdude]

Originally Posted by Brave Ulysses Do you not realize that the government is now moving towards doing on a macro scale what got the country into this problem on a micro scale?

Now? You think spending just got out of control now? That's hilarious. I can't take anything you say seriously.

Just to humor you, though. There is a huge difference between the government borrowing and people re-financing their homes or getting subprime loans - and that's the interest rate. I discussed this earlier. The government will auction off 30-yr treasury bonds to the Chinese or Saudis to pay for this, and the interest rate will be around 4.5%. That's vastly different than someone who took out a subprime loan that would readjust to rates closer to those for a credit card. But, of course, we discussed all this already.

[Taskiss]

Originally Posted by ezkcdude When you say "the problem", what are you referring to exactly? The financial crisis we are in was not caused by our national debt, if that's what you're implying. Or maybe you're just trying to change/avoid the subject?

The problem is "bad" debt. Your arguments seem to indicate you either don't realize that or you don't believe it, but that doesn't change the facts.

Folks were buying when should have been paying down debt, with money they obtained either by taking out second and third mortgages or by deferring payment of the principal portion of their home loan with ARMs or some such. Any way you look at it, they kept contributing to their debt load and kept securing debt with the future value of their greatest asset - their home. Now, with that value depreciated, their debt is virtually unsecured, hence the assertion that there is "bad debt".

ALL else stems from this. There's not a single problem you can offer for consideration ... jobs, the banking situation, the the auto industry foolishness ... that isn't directly the result of the debt riding on the back of the average American.

If someone was smart, they would have identified this years ago and positioned themselves (by disciplining themselves to set their budget at 1/2 their income) to take advantage of the incredible opportunities now available. If you DON'T have bad debt (and you have a credit rating in the 800's), your ship has come in, let me tell you.

SO, yeah, spending money that hasn't been earned yet to resolve a problem that was caused by spending money that hadn't been earned yet is pretty damn stupid... and that's what the gov is doing. It'll be ok, but the folks who will pay the bill are just now entering the workforce. I don't have a problem with that, but I would have, were I those folks... but they're also the most inexperienced segment of the population too, so they don't really know they're being set up to foot the bill or they'd insist on letting things reach equilibrium now on MY watch instead of on theirs.