780 BILLION dollar stimulus package

[eyes2theskies]

But... but!... But Nancy Pelosi says "500 million Americans will lose their jobs" if we don't pass the bill!!!

If there are only 305 million Americans, does that mean two thirds of us are going to lose our jobs twice?!?! Catastrophic indeed.

Twosblind, you say: "School construction does nothing to stimulate the economy in the short term in my opinion. Nor does any other "infrastructure project". These are one time expenditures, single projects, which do not encourage increases in prodcutivity or hiring."


a. Short term: What Midn09 said.
b. Long term: Educating our youth absolutely "encourages increases in productivity." No one would be too productive without some sort of education. Doubling our class sizes (increasing population, but same number of classrooms) is likely to decrease productivity in the long run.

 

[CAMike]

Unfortuantely this bill in its present form will likely pass with a week or so.

Job's that are capable of eventually pay off the $800B debt are not jobs included in the bill. We are simply printing money that we can't pay back in any resonable timely manner.

Highway improvement? Sure great idea/needed idea but not anything that will add $ to the GDP, i.e. something that can pay down the $800B debt.

Arts? Medicare supplements to individual states? Again- Great idea/needed idea but not anywhere near close to a solution for true economic stimulus.

Where is the real answer? I'm not sure, but printing money when you're low on cash is defintely not going to succeed, in fact it's a recipe for failure. The bills tax cuts are not for the folks who contibute the most to the tax base.

These and the other concepts in the current bill are generally not aimed at economic improvement. They are aimed at creating jobs that will have to be supported by european framed socialist government. Is that bad?- depends on your beleifs- but as they appear currently- they are a partisan shove down the american throat effort to get DEM objectives though a process that G.W. ignored for 8 years. In fact the folks like Nancy Pelosi who helped create this bill are bathing in a flurry of success when in reality they are asphixiating the folks who work the hardest and take the most risks.

We'll see if I'm right. Feel free to attack if I'm proven wrong in a year.

 

[Mumbles]

There are very few economists who really buy into Keynesian theory anymore. Instead, the idea of "rational expectations" has taken its place. The difference between the two approaches is essential to understanding why Obama's stimulus package won't work.
Keynes felt that people would react automatically to a few dollars in their hands. Consumers would run out and buy new products, and businessmen, seeing the uptick in sales, would rush to open new plants and hire new workers who would, in turn, generate more demand. But that's not the real world. In reality, consumers, knowing there are hard times ahead, save any money they get either by salting it away or by paying down their debts and bills. That's why the personal saving rate in the last quarter of 2008 was the highest in six years. The Fed purchased bank assets to get liquidity onto their balance sheets. What did the banks do with the money? They gave it right back to the Fed to hold in its vaults. They didn't lend it out. They didn't use it to stimulate the economy. They are using it for a nest egg to tap when times improve. Just like the theory of rational expectations says they would. If banks, suddenly awash in capital, don't decide all is fine and rush to lend money; and consumers, given a tax cut or a pay raise, don't rush to buy a flat-screen TV, then what good will the stimulus package do? Not much. It is not until there is evidence that the underlying problem -- massive personal and corporate debt -- is being solved that any degree of confidence will return. And, without confidence, the rational expectation theory means people sit on their money. But the package will do a whole lot of harm by piling up capital that people won't spend, banks won't lend and businesses won't invest. When confidence rises and the money comes out of hiding, watch out for the massive inflationary pressures all that extra cash will unleash. Obama's stimulus package won't stimulate much except inflation, (and bigger government) down the road, which will, in turn, mean the onset of another round of high interest rates and renewed recession to check the inflation.

 

[JSF_Dreamer]

Application of liberal thinking. Nothing fancy... but you get the idea.

 

[SkywardET]

Death and taxes, those are the only sure things in life. Hyperinflation is not inevitable, just possible.

Sir, I'm curious what you expect will happen as a result of the fiscal policies of the previous administration continued, without missing a beat, by the current administration. What is the "end game" of all of this?

I implore you for insight because governments have been overthrown as a result of this current crisis so far and we are only at the beginning of the crash. What silver linings are there?

 

[navy09]

Application of liberal thinking. Nothing fancy... but you get the idea.

Stupid. I can't believe I actually watched that for 30 seconds.

 

[Cobra Commander]

Let's look on the bright side, at least the government will have a good excuse to take all the money I make from dividends and capital gains now.

This whole financial crisis is an overblown crock of shit.

 

[navy09]

Let's look on the bright side...

So optimistic. Well, as taxes increase, the real income of military members increase as well. I say we double taxes!!!

 

[zoomie08]

Application of liberal thinking. Nothing fancy... but you get the idea.

First off, I can't believe you take that guy seriously. The two monitors, lack of any athletic features whatsoever, and the wearing of a Marines shirt by a guy who probably spends 3/4 of his day playing World of Warcraft (not to mention the lack of a viable argument) made me write this guy off as a douche in only a few seconds.

As for the comments about school construction:

I do believe it is a credible way to stimulate the economy both now and for years to come. The actual construction projects will create countless jobs in the construction field. Then, once the schools are built, the schools will require staffs which translates into more jobs. Finally, and most obviously, the schools will be investing in future generations of Americans. It does not take much to realize that educating them will help keep the economy stimulated for years to come. School construction is certainly not the be all end all of the stimulus package, but I believe it was too important to be left out.

Flash was right about the hybrid vehicles. $300 million to buy hybrid vehicles for various federal organizations.

 

[UGA]

The argument over what we are going to do with this money is a somewhat flat debate if you consider where it is coming from. We would expect most of it to come from our good friends the Chinese. However they, after our latest credit binge, have started to question our ability to pay back the money that we take from them. A year ago I would have never imagined that hyperinflation was a real possibility in my lifetime but now i believe it could really happen. How the hell else are we supposed to come up with money that we don't have?

 

[kimphil]

I'm not sure why everyone is afraid of hyperinflation all of a sudden. Inflation is the least of our problems. Right now, the economy is on the brink of deflation. Commodity prices are dropping (have you seen the price of oil lately?) and there's an overstock of durable goods like cars and housing, which are driving down the price of goods. The one tool the Fed has to reignite demand (and counter deflation), the discount rate, is effectively at 0 percent. The federal reserve is running out of monetary tools to fight the recession, that only leaves fiscal tools (like the stimulus) to deal with the recession.

 

[zoomie08]

Oil is probably not a good example to use when discussing commodity prices. While $40-45 may seem cheap when compared to the $150 spike this summer, it is much higher than the historical average.

 

[nittany03]

The federal reserve is running out of monetary tools to fight the recession, that only leaves fiscal tools (like the stimulus) to deal with the recession.

And time. People aren't instantly going to say "yay, I have money! Let's spend it!" Like has been mentioned, they're going to pay down their debt, save some, and generally get their head above water. The key to this recovery is TIME. You can talk all you want about what that money is going to get spent on and how cool it will be to have more schools, better roads, etc. Great.

Too bad the only way to get it is by massive deficit spending. That way places like China have us by the short hairs, even more than they do now. Want to bet that part of the Chinese war plan over Taiwan is to cause a massive run on the dollar and wreck our economy? We are limiting our geopolitical options when other countries hold massive amounts of our debt.

 

[JSF_Dreamer]

What I was saying with the youtube post was that the dems just want to throw money at the problem. 1.5 trillion dollars in under a year. Plus, with them doing so many things to "stimulate" the economy, if one does work, they aren't going to know which it was.

The fact that Obama is attempting to make money available to ACORN and contributors in Hollywood through this bill is proposterous. There's just way too much crap in it. I was watching his speech on how people are calling this a "spending" bill and that's what a stimulus is. Which is true, but when you're just spending money on a millions things that might create a few jobs here and there (how will funding for hybrid gov cars make more jobs?) makes the price per job that the government is spending absolutely ridiculous.

Was watching a senator speak on C-SPAN the other day about one part of the bill in which the projected job creation was so low that each job was costing the government over $5 million.

I'm glad that most republicans aren't supporting this (why would they?). So when this fails and the bill lands on its face, there won't be any "bipartisan" blame be spread around.

 

[eyes2theskies]

I think massive deflation will happen before we suffer Zimbabwe's fate... but I'm no reputable economist.

Skyward, that's why men and women like us took oaths to support and defend the Constitution of the United States of America. The Constitution includes the Bill of Rights, let us be reminded.
If our government was overthrown, we would be SOL trying to get our rights or Constitution back. It isn't usually "certain inalienable rights"-conscious people who take over countries during collapses, catastrophes, and/or violence; they are usually rather psychopathic, selfish, and greedy. But, like I said, that's why hundreds of thousands of Americans like us have taken those oaths, to prevent such a catastrophe and to defend our country, even if it is unpopular to do so.