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The Stimulus Package

3D.

3D.

Monkey
Feb 23, 2006
899
0
Chinafornia USA
it's funny that it's commonly referred to as a credit problem, or we need to "free" up the credit flow so banks will start lending again, blah blah blah...

meanwhile the population (as a whole) is busted, small businesses busted, large corps busted, retail busted, real estate busted... christ, even california (was considered about the 8th largest econ in the world) busted flat, in a really bad way. -42billion

how does the government who, until this date, had never really borrowed more than 8bil at a time (over several years mind you), think that they are going to be able to borrow what? 2.5 trillion or more over two years and not end up completely busted much worse than any of the above stated? :huh:
 
$tinkle

$tinkle

Expert on blowing
Feb 12, 2003
14,591
6
markets are speculative, so it should follow that wealth/debt are theoretical, and not actual. caveat being this is a difficult application in the peer2peer sense, but if we all bought into it, what a wonderful world this could be.

too bad we're very human
 
jimmydean

jimmydean

The Official Meat of Ridemonkey
Sep 10, 2001
41,284
13,397
Portland, OR
3D. said:
how does the government who, until this date, had never really borrowed more than 8bil at a time (over several years mind you), think that they are going to be able to borrow what? 2.5 trillion or more over two years and not end up completely busted much worse than any of the above stated? :huh:
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How much did Bush borrow for war? What an awesome investment that turned out to be.
 
ohio

ohio

The Fresno Kid
Nov 26, 2001
6,649
24
SF, CA
It ain't big enough


politico said:
Among those who say government needs to spend more, not less, there’s a consensus figure for exactly how much more: $400 billion over two years, for a total package of about $1.2 trillion.

“The stimulus does not need to be timely, targeted and temporary,” argues Robert Kuttner, co-editor of The American Prospect. “It needs to be adequate to do the job.” He runs some quick back of the envelope math. “Eight hundred and twenty billion is about 2.5% of GDP. But the economy is sinking at the rate of five to six percent. So they may find out they have to come back and ask for more.”
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edit: that's what she said
 
dante

dante

Unabomber
Feb 13, 2004
8,807
9
looking for classic NE singletrack
ohio said:
It ain't big enough




edit: that's what she said
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From that article:

Economist Dean Baker, co-director of the Center for Economic and Policy Research, proposes an idea certain to make many conservatives boil - pay employers to shorten the work week. Here’s how it would work: Employees would cut back their hours by ten percent, government would pick up the additional cost of that burden, and employers would have room in their payrolls to hire new workers, or hold off on scheduled layoffs. “We’re losing jobs at a very scary rate, and I think it’s important to do whatever we can to stem that job decline,” Baker said.
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:banana:
 
T

TRUTH

Chimp
Jan 30, 2009
8
0
The only thing it is going to Stimulize is Obama and his DEMOCRAT friends pockets. The fix is in. We've been had!!!! Now if he adds a new DOWNHILL BIKE in there for me...wait I'm Middle class, I ain't gettin nuthin...
 
Last edited:
T

TRUTH

Chimp
Jan 30, 2009
8
0
Obama is going to invade Afganistan. So throw the WAR word somewhere else. It isn't a good comeback anymore....
 
jimmydean

jimmydean

The Official Meat of Ridemonkey
Sep 10, 2001
41,284
13,397
Portland, OR
TRUTH said:
The only thing it is going to Stimulize is Obama and his DEMOCRAT friends pockets. The fix is in. We've been had!!!! Now if he adds a new DOWNHILL BIKE in there for me...wait I'm Middle class, I ain't gettin nuthin...
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Seriously, have you read ANYTHING about it, or are you going off what "Friends at Fox" told you?

Can someone put a stop on the crazy train? How many jackasses do we need to recycle?
 
T

TRUTH

Chimp
Jan 30, 2009
8
0
I am a political science major. I watch CSPAN and the House and Senate as well as access their sites. Don't try that FOX NEWS crap with me. I'm guessing you're gettig your news from the Daily KOS (lie)
 
T

TRUTH

Chimp
Jan 30, 2009
8
0
Retarded is not politically correct. It's obvious that you're oviously not a Left leaning Liberal. Besides quit being childish....
 
dan-o

dan-o

Turbo Monkey
Jun 30, 2004
6,499
2,805
dante said:
From that article:
:banana:
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That won't work. I don't see the economy returning to past levels anytime soon given the absence of credit. It will function at a lower level and the over capacity of labor will need to be propped up on employment until they are needed again. Until new industries are created to absorb them, they are dead weight.

I see it in building industry now. GC's trying to 'spread the wealth' by using varying subs to complete jobs. It's a micro-bailout that will fail to stop the inevitable and necessary consolidation of the industry.

Decreasing the hours of current, trained workers to make room for new ones will reduce efficiency, hurt the bottom line and diminish wages for existing workers.

The best solution is to treat unemployment and getting the 'new' economy working as separate issues. They are both manageable on their own but a cluster**** when tied together.
 
jimmydean

jimmydean

The Official Meat of Ridemonkey
Sep 10, 2001
41,284
13,397
Portland, OR
TRUTH said:
I am a political science major. I watch CSPAN and the House and Senate as well as access their sites. Don't try that FOX NEWS crap with me. I'm guessing you're gettig your news from the Daily KOS (lie)
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I have no idea that truck driving schools allowed you to major in political science. Since I know how useful that degree will be when you finish:

Yes, I do want fries with that.
 
dan-o

dan-o

Turbo Monkey
Jun 30, 2004
6,499
2,805
Someone changed the keys on TRUTH's keyboard.
He intended to sign on as TRIGG
 
dante

dante

Unabomber
Feb 13, 2004
8,807
9
looking for classic NE singletrack
X3pilot said:
http://www.whitehouse.gov/strongmiddleclass/

Nope, nothing about DH bikes, sorry.
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Actually, if you take the analogy further, I'd be getting a new DH bike under Republican leadership, not under a Democratic one.

1) I already have one, so they should automatically give me another one.
2) I have no place to use it, so it'll just sit in my basement as an investment.
3) They should give me one for free, so I can sell my old one and stimulate the economy.

Giving a DH bike to someone too poor to buy their own and who would actually go out and use it?? What are you, a communist?
 
syadasti

syadasti

i heart mac
Apr 15, 2002
12,690
290
VT
TRUTH said:
The only thing it is going to Stimulize is Obama and his DEMOCRAT friends pockets. The fix is in. We've been had!!!! Now if he adds a new DOWNHILL BIKE in there for me...wait I'm Middle class, I ain't gettin nuthin...
Click to expand...
ATOMICFIREBALL lost his account password:poster_oops:
 
stevew

stevew

resident influencer
Sep 21, 2001
40,618
9,620
3D. said:
something tells me this same protest will look a little different when it happens in DC

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they left out money for more vacation time when they were bitching about what they wanted the bailout money to be spent on.
 
JohnE

JohnE

filthy rascist
May 13, 2005
13,452
1,980
Front Range, dude...
Via the email...

Stimulus Payment Information
"This year, taxpayers will receive an Economic Stimulus Payment. This
is a very exciting new program that I will explain using the Q and A format:

Q. What is an Economic Stimulus Payment?
A. It is money that the federal government will send to taxpayers.

Q. Where will the government get this money?
A. From taxpayers.

Q. So the government is giving me back my own money?
A. Only a smidgen.

Q. What is the purpose of this payment?
A. The plan is that you will use the money to purchase a high-definition TV set, thus stimulating the economy.

Q. But isn't that stimulating the economy of China?
A. Shut up.

Below is some helpful advice on how to best help the U.S. economy by spending your stimulus check wisely:

If you spend that money at Wal-Mart, all the money will go to China.
If you spend it on gasoline it will go to the Arabs.
If you purchase a computer it will go to India.
If you purchase fruit and vegetables it will go to Mexico, Honduras, and Guatemala (unless you buy organic).
If you buy a car it will go to Japan.
If you purchase useless crap it will go to Taiwan.

And none of it will help the American economy.

We need to keep that money here in America. You can keep the money in
America by spending it at yard sales, going to a baseball game, or spend it on prostitutes, beer and wine (domestic ONLY), funerals, weddings, or tattoos, since those are the only businesses still in the US.
 
Toshi

Toshi

Harbinger of Doom
Oct 23, 2001
38,405
7,793
a good article by brad delong (berkeley econ prof) on the stimulus package and various options to counteract depressions:

http://delong.typepad.com/sdj/2009/02/the-rational-thing-is-to-try-both-depression-economics.html

February 02, 2009

"The Rational Thing Is to Try Both": Depression Economics

This month in Project Syndicate:

Brad DeLong: WHEN an economy falls into a depression, governments can try four things to return employment to its normal level and production to its 'potential' level. Call them fiscal policy, credit policy, monetary policy and inflation.

Inflation is the most straightforward to explain: The government prints lots of banknotes and spends them. The extra cash in the economy raises prices. As prices rise, people don't want to hold cash in their pockets or their bank accounts - its value is melting away every day - so they step up the pace at which they spend, trying to get their wealth out of depreciating cash and into real assets that are worth something. This spending pulls people out of unemployment and into jobs, and pushes capacity utilisation up to normal and production up to 'potential' levels.

But sane people would rather avoid inflation. It is a very dangerous expedient, one that undermines standards of value, renders economic calculation virtually impossible, and redistributes wealth at random. As John Maynard Keynes put it, 'there is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose...'

But governments will resort to inflation before they will allow another Great Depression. We just would very much rather not go there, if there is any alternative way to restore employment and production.

The standard way to fight incipient depressions is through monetary policy. When employment and output threaten to decline, the central bank buys up government bonds for immediate cash, thus shortening the duration of the safe assets that investors hold. With fewer safe, money-yielding assets in the financial market, the price of safe wealth rises. This makes it more worthwhile for businesses to invest in expanding their capacity, thus trading away cash they could distribute to their shareholders today for a better market position that will allow them to reward their shareholders in the future. This boost in future-oriented spending today pulls people out of unemployment and pushes up capacity utilisation.

The problem with monetary policy is that, in responding to today's crisis, the world's central banks have bought so many safe government bonds for so much cash that the price of safe wealth in the near future is absolutely flat - the nominal interest rate on government securities is zero. Monetary policy cannot make safe wealth in the future any more valuable. And this is too bad, for if we could prevent a depression with monetary policy alone, we would do so, as it is the policy tool for macroeconomic stabilisation that we know best and that carries the least risk of disruptive side effects.

The third tool is credit policy. We would like to boost spending immediately by getting businesses to invest not only in projects that trade safe cash now for safe profits in the future, but also in those that are risky or uncertain. But few businesses are currently able to raise money to do so.

Risky projects are at a steep discount today, because the private-sector financial market's risk tolerance has collapsed. No one is willing to buy assets and take on additional uncertainty, because everyone fears that somebody else knows more than they do - namely, that anyone would be a fool to buy. Although the world's central banks and finance ministries have been devising many ingenious and innovative policies to stimulate credit, so far they have not had much success.

This brings us to the fourth tool: fiscal policy. Have the government borrow and spend, thereby pulling people out of unemployment and pushing up capacity utilisation to normal levels. There are drawbacks: the subsequent dead-weight loss of financing all the extra government debt that has been incurred, and the fear that too rapid a run-up in debt may discourage private investors from building physical assets, which form the tax base for future governments that will have to amortise the extra debt.

But when you have only two tools left, neither of which is perfect for the job - credit policy and fiscal policy - the rational thing is to try both, at the same time. That is what the Obama administration in the United States and other governments are attempting to do right now.
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DamienC

DamienC

Turbo Monkey
Jun 6, 2002
1,165
0
DC
JohnE said:
Via the email...

Stimulus Payment Information
"This year, taxpayers will receive an Economic Stimulus Payment. This
is a very exciting new program that I will explain using the Q and A format:
Click to expand...
Sounds like this is referring to last year's stimulus payment and not the stimulus plan being worked out now. BTW, the stimulus check I got last year didn't stimulate anything except for the balance in my savings account.

Also, I thought the spending portion of the stimulus plan had a "Buy American" provision in it such that most of the money to be spend on infrastructure, for example, had to go to domestic industries and suppliers.
 
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