Despite a bipartisan effort...

I'm really torn up about how to respond to this bill. First of all, I think it will have no effect at all on the economy, but it will be brutal on the US deficit and eventually will require me (and probably my kids) to pay back via taxes.

On the other hand, I'm very confident that in a year or two the economy will improve all by itself....and unfortunately the Democrats will take credit for it, despite the fact that they had absolutely nothing to do with the recovery (and in fact, could very well extend the recession by artificially holding it back from its natural recovery).

I guess I'll just have to rely on the American public's fickleness to demonstrate their anger when the economy doesn't improve in a few months or rely on the American public's retribution when the Democrats tell us that our taxes have to increase in order to pay for this massive spending spree.

1 Reply

@maporsche,

maporsche wrote:

You know what they say about economists cyclops. Ask two of them for their opinion on something and you get three answers.

"No serious economist" I'd love to know your criteria for determining who a serious economist is.

Let me put it this way: what economist have the Republicans put forward who supports their plans to cut taxes as a stimulus for America?

Boehner in the house was going on and on about how they would create jobs for half the money of the Dem plan, remember? A bunch of people wondered how they got those figures.

Turns out that they took a white paper written by an economist on how many jobs would be lost by increasing the taxes in question, and simply flipped the results to show that reducing the taxes would equate gains equal to that amount! Which was incredibly stupid and did not follow logically.

That's the sort of thing behind Republican proposals: ideology, not economics. Boehner's primary plan was to permanently reduce the top tax bracket to 25%. That's not stimulus, that's just the Republican pro-rich agenda allll over again...

Cycloptichorn

1 Reply

@slkshock7,

slkshock7 wrote:

I'm really torn up about how to respond to this bill. First of all, I think it will have no effect at all on the economy, but it will be brutal on the US deficit and eventually will require me (and probably my kids) to pay back via taxes.

On the other hand, I'm very confident that in a year or two the economy will improve all by itself....and unfortunately the Democrats will take credit for it, despite the fact that they had absolutely nothing to do with the recovery (and in fact, could very well extend the recession by artificially holding it back from its natural recovery).

I guess I'll just have to rely on the American public's fickleness to demonstrate their anger when the economy doesn't improve in a few months or rely on the American public's retribution when the Democrats tell us that our taxes have to increase in order to pay for this massive spending spree.

I guess it's worth pointing out that Obama ran on raising taxes on the rich. So it seems he'll probably have a little playing room there when the economy starts to get better. Heck, he'll just be fulfilling campaign promises by doing so.

Cycloptichorn

0 Replies

This is for all those who would claim that Obama is just fearmongering out of partisan interest, when it comes to his warnings about how things stand to get a lot worse still without repeated and drastic intervention:

http://img14.imageshack.us/img14/3339/joblossesjan09lxo4.png

I assume the chief economist of Moody's Economy.com won't be seen as just another liberal source as authority on that prospect?

Quote:

“Businesses are panicked and fighting for survival and slashing their payrolls,” said Mark Zandi, chief economist at Moody’s Economy.com. “I think we’re trapped in a very adverse, self-reinforcing cycle. The downturn is intensifying, and likely to intensify further unless policy makers respond aggressively.” [..]

As in previous months, employers [..] slashed their payrolls in almost every industry except health care. Manufacturers eliminated 207,000 jobs, more than in any year since 1982. The construction industry eliminated 111,000 jobs. [..]

“This is a horror show we’re watching,” said Lawrence Mishel, president of the Economic Policy Institute [..]. “By every measure available " loss of employment and hours, rise of unemployment, shrinkage of the employment to population rate " this recession is steeper than any recession of the last 40 years, including the harsh recession of the early 1980s.” [..]

[S]ome analysts contend that the current rate of 7.6 percent understates the labor market’s problems because the percentage of adults participating in the labor force has slumped, and those people are not listed as “unemployed.” Peter Morici, an economist at the University of Maryland, estimated that if the labor force participation rate today were as high as it was when President Bush took office, the unemployment rate would be 9.4 percent.

Source

1 Reply

@Cycloptichorn,

Cycloptichorn wrote:

That's the .. thing behind Republican proposals: ideology, not economics.

Yep.

That's why their answer is always the same, whether the economy is growing or shrinking, whether it's boom or bust, whether unemployment is up or down, whether the greater risk is inflation or deflation: their proposed solution is always to lower taxes on the upper incomes. Pure ideology.

2 Replies

@nimh,

You guys remember economist Peter Schiff right...he's the one who for 2 years before the housing bust kept on saying that it was coming was going to be big. Everyone told him he was crazy, including the Chief Economist from Moody's. He's got a viral video on YouTube with his greatest hits. He totally nailed the housing bubble when everyone thought he was crazy. Remember when everyone thought there would be a slowdown but not a bubble. Here's his video on A2K courtesy of Robert G.

Well, I wonder what Peter Schiff has to say about the stimulus package.

Quote:

The fiscal stimulus bill being debated in Congress not only won't help the economy, it will make the recession much worse, says Peter Schiff, president of Euro Pacific Capital.
Schiff scoffs at the notion the economic decline is starting to level off and concedes no government action means a "terrible" recession. But the path of increased government intervention will lead to "unmitigated disaster," says Schiff, who gained notoriety in 2007-08 for his prescient calls on the housing bubble and U.S. stocks.

The problem, he says, is the government is trying to perpetuate a "phony economy" based on borrowing and spending. With the U.S. consumer tapped out, the government is "now taking on the mantle" of consumer of last resort, he continues, predicting the bond bubble will soon burst - if it hasn't already - ultimately leading to a collapse of the dollar and an "inflationary depression worse than anything any of us have ever seen."

If nothing else, Schiff is an nonpartisan critic of American policymakers, comparing President Bush to Herbert Hoover and President Obama to FDR, and neither in a favorable way.

Now, I would never say that because Schiff was right on the housing deal that means he is going to be right now. But we have a VERY recent example where "serious economists" have recently been proven VERY WRONG. It would be a mistake to automatically trust them now.

1 Reply

@nimh,

I agree with you here. Pure ideology on both sides of bill.

The only sensible position to take is to do nothing.

0 Replies

@nimh,

nimh wrote:

Cycloptichorn wrote:
That's the .. thing behind Republican proposals: ideology, not economics.

Yep.

That's why their answer is always the same, whether the economy is growing or shrinking, whether it's boom or bust, whether unemployment is up or down, whether the greater risk is inflation or deflation: their proposed solution is always to lower taxes on the upper incomes. Pure ideology.

Tussin
K
O

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Here's an idea...

Make the Republican tax breaks proportional to their support of the Stimulus Plan in the senate. If they all support it, then there's 40% in tax breaks in the bill, if only one does, then only 2% of the plan contains tax breaks. I'm willing to work with compromise, if they are.

0 Replies

@maporsche,

maporsche wrote:

Quote:
If nothing else, Schiff is an nonpartisan critic of American policymakers, comparing President Bush to Herbert Hoover and President Obama to FDR, and neither in a favorable way.

Hmm .. is he a libertarian, ideologically speaking?

Anyway, if that's the comparison he considers apt, I'll take it. I wouldn't mind a new FDR.

1 Reply

@nimh,

Hmm, ok. I shoulda just checked Wikipedia for my answer. This is how his page there describes his perspective on the crisis:

Quote:

Schiff is a supporter of the Austrian School of Economics and the Ludwig von Mises Institute[5], and was an economic adviser for fellow Austrian Ron Paul's campaign in the 2008 Republican Party primaries, through which Schiff also expressed support for sound money, limited government, and free market capitalism. [..]

Schiff [says] that the US consumer thinks he's doing the world a favor by consuming what the rest of the world produces. He is quick to point out that this relationship will come to an end, in his view, much sooner than people imagine, and with negative consequences for the US. Schiff has been quoted as saying: "Consumption is its own reward for Production""meaning that without production, the US cannot indefinitely sustain its ongoing consumption. Schiff, and other adherents of Austrian economics, promote savings and production as "the engine of economic growth -- not consumption".[citation needed]

Schiff has said on numerous occasions that the current economic crisis is not the problem; it is the solution. According to him, the transition from borrowing and spending to saving and producing cannot be accomplished without a severe recession, given the current imbalances of the US economy. But according to him, that transition needs to happen. He also thinks the government is doing no one a favor by trying to "ease the pain" with stimulus packages, bailouts and such. Schiff believes these actions will only make the situation worse and possibly result in hyperinflation if the government continues to "replace legitimate savings with a printing press."[12]

Schiff is a firm believer in reducing government regulation of the economy. Schiff worries that Barack Obama will increase such regulation.[13]

Schiff points to the low savings rate of the United States as its worst malady, citing the transformation from being the world's largest creditor nation in the 1970s to the largest debtor nation by the year 2000. His extremely bearish views on the U.S. Dollar, the United States stock market, bond market and the United States economy have earned him the nickname "Dr. Doom." [14]

In his January 14, 2009 radio show, Schiff discussed moving out of cities in anticipation of rising crime rates, food shortages, fuel shortages, and rolling blackouts. He also mentioned the need for families to stock up on guns and ammunition as a part of what he expects. This quasi-survivalist stance demonstrates how serious he expects the unfolding economic downturn will be.

He was obviously foresightful in calling the current crisis (and caught some characteristically inane crap for it on Fox, where another guest accused him of "Anti-Americanism in the guise of financial advice"). His vision of a solution is also obviously along pretty radical libertarian lines, and he sees a serious impending crisis (with all the human suffering it entails) not just as inevitable but also necessary and in a way benefitial.

It's the latter counts I'd part ways with him. I dont think libertarian solutions are the key to solving the economic crisis; in fact, it's the same massive deregulation he apparently wants more of that played a crucial role in causing this crisis in the first place. And while I'm in no position to judge whether the big economic collapse he's predicting is indeed inevitable, I'm loathe to embrace it as a kind of benefitial cleansing - if there is any chance at all to avoid or soften a blow that would entail so much human suffering, I think it's any government's duty to try to find it.

In that sense this reminds me kind of - ironically - of the Great Kladderadatsch the Marxists of old predicted. That time when the capitalist system would inevitably collapse and it would be a productive, beneficial collapse, because that collapse would make building socialism possible. (I hope I got that right.) It had some Marxists embracing the, in their view temporary, worsening of conditions at the current time as a necessary process of "heightening the contradictions" of the system, which would bring about its self-destruction and make its replacement by a new, better system possible.

All fine in theory, except in practice they embraced a little all too callously, in my mind, the mass suffering people would incur in the process. That always struck me as a kind of doctrinal coldness that transgressed from just thinking in abstractions into a cruel lack of compassion. Much like the impression the above (admittedly extremely cursory) reading of Schiff's thoughts makes, it was in their eyes of course just a question of tough love and accepting the inevitable. But I'm just kind of wary out of principle of any body of thought that a priori accepts that, well, millions will just have to suffer in the process of the society/economy being cured of its ills.

Which I suppose makes me, on this count, something of a traditional (Burkean, if I'm getting my labels right?) conservative. Ironies galore.

3 Replies

@Cycloptichorn,

Cycloptichorn wrote:

At least, we should use the U-6 unemployment graph which accounts for underemployment.

He is correct. We should use it.

And we should have used it during Slick Willie's two terms and most of all during Carter's tenure when the official rate was 10%( and would have reached 12 or 13% if U-6 would have been used.

But I am sure Cyclopitchorn would not revisit the disasterous INFLATION levels during the C arter Administration which made Jimmy Carter the c hampion of the Misery Index(Unemployment rate added to Inflation rate.

The left does not want anyone to speak of Carter's disasterous 18 % ( yes, eighteen percent) inflation rate in 1980.

Certainly, 7.6( or9.6 U-6 wise) does hurt 10% of the population but an 18% INFLATION RATE HURTS EVERYONE.

When President Obama's chickens come home to roost( because we will have so much debt on the books) ,Obama may well challenge that 18% inflation in three or four years.

We will see then what the left wing has to say!!

0 Replies

@nimh,

Nimh wrote:

"The mass suffering people would incur in the process"

WHAT GARBAGE. Only a European with his head up his posterior wouldwrite such a line. No matter the direction of government in the USA, the people of the USA have done much better than any peasant in Russia, Hungary or the soon to be under Muslim Rule--The Netherlands.

Nimh does not know that there is such a think as "Marxist tinged Socialism" ( a phrase made by Foxfyre) but he is terrfied that the truth would beknown and that Americans does learn that there IS INDEED A CONTINUUM IN SOCIALIST DOCTRINE. Some Socialist schemes are,indeed, rather innocuous and others ON THE CONTINUUM, are MARXIST tinged.

Nimh's ignorance concerning the President of the United States is massive.

He does not know or will not admit that President Obama worked for Jerry Kellman, A community organizer in 1983, Kellman is a self-described acolyte of the famous Saul Alinsky--a rabid socialist and the author of "Reville for Radicals".

But maybe Nimh does know that but he would admit it!

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@nimh,

Unfortunately, Schiff has been right in calling most of what has happened so far in this recession; what he is saying may happen now really causes one to pause:

Mass hyperinflation, followed by an economic meltdown?

That’s what we can expect, with an almost $1,000,000,000,000 (lot of zeros, ain't it) spending bill by the time the 'progressives' are done with us?

Tax breaks for those who don't pay taxes, entitlement spending, little infrastructure job growth. Massive growth of the government?

With all the money the government is going to be printing to fund this spending bill, I think Schiff is correct; little is being produced by the economy to cover all this money, and hyperinflation will result.

Hopefully, Schiff is wacked out and his run of correct calls is over, and this spending bill by the dems either works (which I think it won’t), or doesn’t hurt us too bad.

But when he talks about Obama causing the coming collapse of the US Dollar and a run on our currency, it makes one realize what a roll of the dice the dems are taking. Even Joe ‘Wrong Side of History in Every Major Foreign Policy Decision’ Biden said the dem spending bill only has a 30% chance of success.

Watch Schiff here:

http://www.youtube.com/watch?v=djgH9wA-JSU

1 Reply

@A Lone Voice,

You are right on the ball- Lone Voice. The left wing won't ever mention it but it was the esteemed Jimmy Carter who took us to20% inflation in 1980. President Obama is nothing but a populist. There have been a few in our History. A populist is described by William Safire this way:

quote

Populist--"attuned to the needs of the people", now used with a connotation of old-fashioned radicalism.
Lyndon Johnson was called by friendly writers a political leader "in the old populist tradition" When Jimmy Carter( much like Barack Obama) inveighed against favoritism in his 1976 acceptance speech---" I see no reason why big-shot crooks should go free, while the poor ones go to jail", Carter was described as a populist. a populist economic policy in the 1990's is one that features a call to" soak the rich".

end of quote

Of course, both C arter and Johnson were two of the worse presidents of the 20th century.

President Obama apparetnly doesn't know that a stimulus package which punishes the average American by loading him and his children with horrendous inflation and debt in the future, is the worst thing that could happen to our country.

But I don't think the president is looking beyond 2012--His second term.

I have a feeling, however, that his attempts to ameliorate the economy will fall into the same trap as the NewDeal attempts in 1932. FDR taxed higher income earners savagely. As a result, they did not put their money into the economy. FDR spent and spent and spent and spent.

Many do not realize that the Democrats did not take the country out of the DEPRESSION during the decade of the thirties.

Indeed, the Unemployment rate was an ASTONISHING 22.9 IN 1933.

FDR piled on program after program( much like President Obama). By1937, the Unemployment rate was still a HORRIB LE 15.1%

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@Cycloptichorn,

Well since you're such an adult, perhaps you can explain to us children how the following will meaningfully stimulate the economy

$2 billion earmark to re-start FutureGen, a near-zero emissions coal power plant in Illinois that the Department of Energy defunded last year because it said the project was inefficient.
• A $246 million tax break for Hollywood movie producers to buy motion picture film.
• $650 million for the digital television converter box coupon program.
• $88 million for the Coast Guard to design a new polar icebreaker (arctic ship).
• $600 million to buy hybrid vehicles for federal employees.
• $400 million for the Centers for Disease Control to screen and prevent STD's.
• $150 million for Smithsonian museum facilities.
• $1 billion for the 2010 Census, which has a projected cost overrun of $3 billion.
• $75 million for "smoking cessation activities."
• $200 million for public computer centers at community colleges.
• $75 million for salaries of employees at the FBI.
• $25 million for tribal alcohol and substance abuse reduction.
• $500 million for flood reduction projects on the Mississippi River.
• $10 million to inspect canals in urban areas.
• $6 billion to turn federal buildings into "green" buildings.
• $500 million for state and local fire stations.
• $650 million for wild land fire management on forest service lands.
• $1.2 billion for "youth activities," including youth summer job programs.
• $160 million for "paid volunteers" at the Corporation for National and Community Service.
• $5.5 million for "energy efficiency initiatives" at the Department of Veterans Affairs National Cemetery Administration.
• $850 million for Amtrak.
• $100 million for reducing the hazard of lead-based paint.
• $110 million to the Farm Service Agency to upgrade computer systems.
• $200 million in funding for the lease of alternative energy vehicles for use on military installations.

3 Replies

@Finn dAbuzz,

He won't. You may have noticed, Finn, that Cyclopitchorn is fond of "ex cathreda" pronouncements. He gives no evidence except his own opinon. Anyone who looks at your list( thank you) will realize that it can only be described by on word--'PORK" So much for the mantra of C HANGE laid out by our esteemed president.

My personal expertise is in the area of public education.

quote from the Wall Street Journal( declared anathema by Cyclopitchorn because he can rarely rebut its statements so he descends to ad hominem)

"79 Billion would go to a so-called state stabilization fund intended to avoid teacher layoffs at public colleges and schools"

This is a dilly. I know that teachers cannot be arbitrarily laid off. THEY HAVE TENURE. So where is the 79 Billion going? To the small group of non- tenured teachers?

Again to the Wall Street Journal--2/7/2009-P. a7

"Educators and employers complain that manyhigh school graduates aren't ready for college or the workplace. A recent report by the Pennsylvania Department of Education found that a third of hat state's graduates needed remedial courses in college"

The remedy?( despite the BILLIONS of dollars that have been thrown at the failing students by the programs set up in the Great Society under Johnson)

More Money!!!!

Again to the Wall Street Journal-

"Mr. Duncan said that part of 15 Billion of the stimulus package laid out for Education would be used to help more states develop "internationally benchmarked" achievement standards and acquire and administer tests thatgo beyond multiple choice questions"

An incredible waste of money which will do verylittle but please the Teachers Unions( strong backers of the President)

I have not read a word about actually improving the acievement levels of the children in the schools.

What Socialist like Cyclopitchorn will not tell you is that there are school systems which already receive an astounding amount of money per child-

The Washington DC system has among the highest allocation per child.

Does this help improve acheivement? Not at all. The DC achievement scores are among the worst in the USA.

We shall see whether there is any improvement in the achievement scores especially in the inner cities of the USA in three or four years.

There won't be but one thing you can count on is this--The left wing Liberals will ask for more money even though more money ha not helped at all!

0 Replies

Some of those items do seem to be wasteful and should be eliminated, but some are helpful such as the one for public computers for community colleges. Not everyone can afford a computer and there are only so many at libraries and they are rather restricted in uses.

Be that as it may, though the polls in favor of the package has fallen somewhat, a majority still support it.

Quote:

(CBS) Slightly more than half the country approves of President Obama's $800 billion-plus stimulus package, a new CBS News poll finds. But support for the bill has fallen 12 points since January, and nearly half of those surveyed do not believe it will shorten the recession.

Fifty-one percent of those surveyed support the stimulus package, while 39 percent do not. An additional 10 percent don't know. Last month, 63 percent supported the package and just 24 percent opposed it.

Americans believe the president is following through on his promise to establish greater bipartisanship in Washington: The public overwhelmingly thinks Obama is reaching out to Congressional Republicans, with 81 percent saying he is doing so.

Americans do not believe that Congressional Democrats and Republicans are following suit, however: Only 49 percent believe that Congressional Democrats are striving for bipartisanship, and just 41 percent say Congressional Republicans are seeking bipartisanship.

The different perceptions are reflected in the various parties' approval ratings: President Obama's approval rating stands at 62 percent, while the overall approval rating of Congress is 26 percent.

source

As for saying the liberal way will not help at all, it is plain the conservative way has not helped at all either as we have been doing the cut taxes for the rich and gut programs with under funding all these last eight years under Bush. The no child left behind has been just the opposite under Bush because of under funding. Conservatives see no harm in spending money useless wars and Wall Street and big corporations but when it comes to investing in the future; they can't see the forest for the trees.

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As for the moderate senate bill I don't understand why they left the Smithsonian partially funded but totally cut home land security, state and local law enforcement (states are hard pressed right now under the bush enconomy) and head start and other educational grant programs, and the no child left behind program which has been grossly under funded all this time.

What got cut from the stimulus bill

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@Finn dAbuzz,

Most of the listed items are things that are badly needed, and that will produce or maintain jobs. In any event, we are talking about peanuts in the context of the overall bill.

2 Replies

Despite a bipartisan effort...

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