Well, the House passes the gigantic $819Billion Stimulus Bill...

[kork13]

The country is on the Highway to Heck into economic doom from which we will NOT recover. FDR spent trillions and we got Hoover Dam. Obama is going to spend trillions and we will get a dog run in upstate NY or a smoking cessation program. We cannot spend our way into prosperity. The whole concept of a "stimulus" is assanine. Things are going to get really bad and we are going to sink into a deep depression as the govt just goes wild spending like drunken sailors and preaching responsibility to us.

I forget who said it (Reagan?), and it's been quoted here before, but sometimes it's worth repeating...

The most frightening 9 words in the English language are "I'm from the Government and I'm here to help."

[Investing First Steps]

I think the idea of counter-cyclical spending will always be bashed. We didn't implement the other side (raising taxes and saving during the boom) so we're looking at big debt during the bust, but ultimately the theory is that you have a deflationary cycle. Our GDP is 74% consumer goods. So when I lose my job, I stop buying goods, which means my company loses money and lays more people off and the cycle continues. The general idea is if you create demand for things via the government then you can help make that cycle less pronounced and painful.

All the things that are derided as "pork" are basically presented under the idea that it behooves us to pay people to just dig holes and fill them, but what would be better would be to do something that actually improves our position. So if we spend money to make a new power grid, not only will we create jobs, but the resultant power grid will be of long term benefit.

If you don't believe in counter-cyclical spending, then that's your right. I don't think it's conclusively proven that you can diminish the pains of the cycle, but I think it's a crisis of confidence as well as a financial crisis and the sooner you can inject some optimism the better. This is ultimately what thte government is for, to do things that are good for all of us that the market won't do. Now whether it's good for all of us or not is open to debate, but developing nations are constantly hindered by their inability to do just this. If it works, however you need to remember to slow down the bubble as well, which we like to ignore.

As far as the bugaboo of "Socialism." We have a graduated income tax, we're "Socialists." What makes a tax "fair?" Wouldn't the fairest tax be just everyone pays the same amount? Everyone pays $100, or whatever. Of course then our government would be underfunded, so we have the people who have more money pay more because it's more feasible. Interestingly these are also the people with more to lose, so they have more interest in perpetuating the system. Even a flat tax affects the rich more than the poor, so throwing around the Socialism straw man is always a questionable maneuver.

[GREENBACK]

Kork 13
That was Reagan I believe. He also said that Gov't isn't the solution to the problem, Gov't is the problem. I didn't agree with everything he said but he hit the nail on the head a couple of times.

[kork13]

All the things that are derided as "pork" are basically presented under the idea that it behooves us to pay people to just dig holes and fill them, but what would be better would be to do something that actually improves our position. So if we spend money to make a new power grid, not only will we create jobs, but the resultant power grid will be of long term benefit.

This is a very valid point. But as I (and a couple others) mentioned above, this bill is presented as something that will "Heal the economy!" and "Save American industry!". Come on, give me a break. Yes, there are aspects of it that will likely, if not assuredly, provide long-term benefits. Smart power grid, digital medical records, and so on. That's why Eisenhower's interstate highway system was such a great concept--it provided long-term benefits which encouraged future commercial growth.

So bearing that in mind, could we please explain how handing out $400B or so in "tax credits" and other tax breaks, extending unemployment benefits, and throwing more money at a faltering Medicare construct provides long-term benefits and encourages future commercial growth? I defy anyone to successfully connect the dots here....

No, as someone else mentioned, much of this bill is simply personal pet projects, or items that the recently empowered democratic party (with a Dem Prez and significant Congressional majority) has wanted to bring about for a long time, and this is finally the chance to make some of it happen.

[maat55]

I think the idea of counter-cyclical spending will always be bashed. We didn't implement the other side (raising taxes and saving during the boom) so we're looking at big debt during the bust, but ultimately the theory is that you have a deflationary cycle. Our GDP is 74% consumer goods. So when I lose my job, I stop buying goods, which means my company loses money and lays more people off and the cycle continues. The general idea is if you create demand for things via the government then you can help make that cycle less pronounced and painful.

All the things that are derided as "pork" are basically presented under the idea that it behooves us to pay people to just dig holes and fill them, but what would be better would be to do something that actually improves our position. So if we spend money to make a new power grid, not only will we create jobs, but the resultant power grid will be of long term benefit.

If you don't believe in counter-cyclical spending, then that's your right. I don't think it's conclusively proven that you can diminish the pains of the cycle, but I think it's a crisis of confidence as well as a financial crisis and the sooner you can inject some optimism the better. This is ultimately what thte government is for, to do things that are good for all of us that the market won't do. Now whether it's good for all of us or not is open to debate, but developing nations are constantly hindered by their inability to do just this. If it works, however you need to remember to slow down the bubble as well, which we like to ignore.

As far as the bugaboo of "Socialism." We have a graduated income tax, we're "Socialists." What makes a tax "fair?" Wouldn't the fairest tax be just everyone pays the same amount? Everyone pays $100, or whatever. Of course then our government would be underfunded, so we have the people who have more money pay more because it's more feasible. Interestingly these are also the people with more to lose, so they have more interest in perpetuating the system. Even a flat tax affects the rich more than the poor, so throwing around the Socialism straw man is always a questionable maneuver.

Your argument is a little rediculous. Just because we have to have a bucket of socialism does not justify the government to dig a pond.

I believe in the America our forefathers build, they would not even recognize it now.

[GREENBACK]

I think the idea of counter-cyclical spending will always be bashed. We didn't implement the other side (raising taxes and saving during the boom) so we're looking at big debt during the bust, but ultimately the theory is that you have a deflationary cycle. Our GDP is 74% consumer goods. So when I lose my job, I stop buying goods, which means my company loses money and lays more people off and the cycle continues. The general idea is if you create demand for things via the government then you can help make that cycle less pronounced and painful.

All the things that are derided as "pork" are basically presented under the idea that it behooves us to pay people to just dig holes and fill them, but what would be better would be to do something that actually improves our position. So if we spend money to make a new power grid, not only will we create jobs, but the resultant power grid will be of long term benefit.

If you don't believe in counter-cyclical spending, then that's your right. I don't think it's conclusively proven that you can diminish the pains of the cycle, but I think it's a crisis of confidence as well as a financial crisis and the sooner you can inject some optimism the better. This is ultimately what thte government is for, to do things that are good for all of us that the market won't do. Now whether it's good for all of us or not is open to debate, but developing nations are constantly hindered by their inability to do just this. If it works, however you need to remember to slow down the bubble as well, which we like to ignore.

As far as the bugaboo of "Socialism." We have a graduated income tax, we're "Socialists." What makes a tax "fair?" Wouldn't the fairest tax be just everyone pays the same amount? Everyone pays $100, or whatever. Of course then our government would be underfunded, so we have the people who have more money pay more because it's more feasible. Interestingly these are also the people with more to lose, so they have more interest in perpetuating the system. Even a flat tax affects the rich more than the poor, so throwing around the Socialism straw man is always a questionable maneuver.

IMHO, the only jobs this will create will be gov't jobs(no taxes) or temporary positions. What's that going to do for the economy? There is very little in this bill that is going to help in the private sector.

What about small buisness owners Who pay taxes and employ people, Are they even mentioned? Even some of the better ideas of Obama's plan aren't going to do much for a couple years.

We can argue all day about whether we're a socialist society or not. I think you only need to look at red China to see how much of a socialist society we can become. Maybe they'll eventually be pulling our strings anyway since we'll end up on the hook to them for trillions of dollars.

[Investing First Steps]

Your argument is a little rediculous. Just because we have to have a bucket of socialism does not justify the government to dig a pond.

I believe in the America our forefathers build, they would not even recognize it now.

You prefer the existing redistribution of wealth through bureaucracy to a flat redistribution of wealth? I.E. You'd rather have the government collect a bunch of money and redistribute it through "programs" instead of just cutting everyone a $500 check? I prefer the more direct method where the government doesn't siphon off a bunch of it, but I don't see how one is a bucket and the other is a pond.

IMHO, the only jobs this will create will be gov't jobs(no taxes) or temporary positions. What's that going to do for the economy? There is very little in this bill that is going to help in the private sector.

What about small buisness owners Who pay taxes and employ people, Are they even mentioned? Even some of the better ideas of Obama's plan aren't going to do much for a couple years.

We can argue all day about whether we're a socialist society or not. I think you only need to look at red China to see how much of a socialist society we can become. Maybe they'll eventually be pulling our strings anyway since we'll end up on the hook to them for trillions of dollars.

By far the more Socialist element is that our government now owns banks, which is not part of the stimulus plan.

Once again as far as the jobs go, when you're trying to break a deflationary cycle, the idea is that it's worthwhile to pay people to dig ditches, so they spend (helping the private sector). I'm also not an expert on the bill on the whole, but I feel like many of those programs will involve contractors who will be hired from the private sector.

Also at Kork:

I certainly agree that this isn't a "panacea." Just an attempt to make the fall less painful.

[GREENBACK]

I heard recently that if all this stimulus money(including the current one) had been directed towards working americans we each would have receieved about 40k. I could certainly help my portion of the economy with that. Oh wait.....The Gov't is so much better at handling money. Silly me.

[Investing First Steps]

I heard recently that if all this stimulus money(including the current one) had been directed towards working americans we each would have receieved about 40k. I could certainly help my portion of the economy with that. Oh wait.....The Gov't is so much better at handling money. Silly me.

819 billion / 40,000 = 20,475,000 people. I think there are more than 20 million working Americans.

[maat55]

You prefer the existing redistribution of wealth through bureaucracy to a flat redistribution of wealth? I.E. You'd rather have the government collect a bunch of money and redistribute it through "programs" instead of just cutting everyone a $500 check? I prefer the more direct method where the government doesn't siphon off a bunch of it, but I don't see how one is a bucket and the other is a pond.

Take a look at government involvement in the 1800's and look at it now. That's where you will see the bucket to pond.

I don't agree with it the way it is now. I would rather the government stop collecting money and redistributing it all together. Other than national defense, highway system, the power grid to a degree, air trafic control and some necessary regulatory needs for banks and business, I would like the states to take care of their own needs.

The government is too distant from the people. There is no excuse for the national debt. Giving them more control is assinine.

[kork13]

We can argue all day about whether we're a socialist society or not. I think you only need to look at red China to see how much of a socialist society we can become. Maybe they'll eventually be pulling our strings anyway since we'll end up on the hook to them for trillions of dollars.

actually, that's kind of a funny point... Yes, China is officially a communist state... But look at the actual workings of the country, and it's actually more capitalistic than the United States in some respects. The Chinese have found the economic realities that go along with communism to be unsustainable in a global setting.

Probably the only truly communist society in existence today is North Korea .... and they're not doing so hot, considering most of their citizens are fed by humanitarian aid from the US and other nations/entities.

(not really related to the topic here, but I just always find little factoids like this interesting...)

[GREENBACK]

819 billion / 40,000 = 20,475,000 people. I think there are more than 20 million working Americans.

I didn't do the math. I heard it on the radio. I don't know what the figure would be but I'd like to have it instead of this incredibly wasteful and unproductive idea. If I'm wrong, I'll be the first to admit it. I'm nowhere near to being an economist but I know spoiled fish when I smell it.

[kork13]

I don't agree with it the way it is now. I would rather the government stop collecting money and redistributing it all together. Other than national defense, highway system, the power grid to a degree, air trafic control and some necessary regulatory needs for banks and business, I would like the states to take care of their own needs.

This actually was exactly the feeling of the founding fathers. It's some interesting research to understand what their true aims were in collecting the states together.... But in very general summary, it was predominantly to provide for those things which a single state could never make successful on its own--defense, travel, commerce, and so on. It's a valid argument that times have changed, but certain fundementals of their intentions (which, IMO, were incredibly sound) are still realistically applicable today.

[Investing First Steps]

Take a look at government involvement in the 1800's and look at it now. That's where you will see the bucket to pond.

I don't agree with it the way it is now. I would rather the government stop collecting money and redistributing it all together. Other than national defense, highway system, the power grid to a degree, air trafic control and some necessary regulatory needs for banks and business, I would like the states to take care of their own needs.

The government is too distant from the people. There is no excuse for the national debt. Giving them more control is assinine.

Well I tend to believe in small government, but I'm skeptical of sizing it down during a historic financial crisis. While I hope that more bureaucracy is not a result of it, this type of event would be about the only time I'd agree with increased spending and decreased taxes.

My point is that simply raising the specter of Socialism doesn't do a very good job of really addressing the issues of the situation. During our boom we should have been lowering our national debt, in the same counter-cyclical policy we are implementing now, but that doesn't change the fact that we didn't and may need to spend now. Once again I can't promise you that counter-cyclical spending works, but if you look at the developing world, their inability to do it seems to cause very severe downturns.

I didn't do the math. I heard it on the radio. I don't know what the figure would be but I'd like to have it instead of this incredibly wasteful and unproductive idea. If I'm wrong, I'll be the first to admit it. I'm nowhere near to being an economist but I know spoiled fish when I smell it.

Part of me likes the idea of cutting everyone a check, but I fear that that's sort of like giving banks money to improve credit markets. They'll be happy to take the money, but that doesn't mean they'll let it flow.

[GREENBACK]

actually, that's kind of a funny point... Yes, China is officially a communist state... But look at the actual workings of the country, and it's actually more capitalistic than the United States in some respects. The Chinese have found the economic realities that go along with communism to be unsustainable in a global setting.

Probably the only truly communist society in existence today is North Korea .... and they're not doing so hot, considering most of their citizens are fed by humanitarian aid from the US and other nations/entities.

(not really related to the topic here, but I just always find little factoids like this interesting...)

So I'll bet that somewhere in China they are arguing at this moment that their beautiful system is eroding in the evil throes of capitalism