The Stimulus Package

[BreakABone]

http://www.recovery.gov/

This is a cool idea.
Let's see if it is put to use.

[Bond]

Nice to know where my parent's money is going.

[Jonbo298]

Originally Posted by Bond

Nice to know where my parent's money is going.

and mine unfortunately. College things will help me this fall, but I'd rather have not gotten it from a "package" like this.

[Bond]

Originally Posted by Professor S

In the end, the Republicans have the best argument based on real numbers but they are afraid to voice it (or apply those pronciples looking at the past 8 or so years), and democrats have the best argument based on "social justice" simply because pandering to class envy and anger is effective. Just look at Jason1's political views for a perfect illustration. Keep someone angry and spiteful against a common enemy and they'll stop thinking.

See, this is the thing that really ticks me off. The Democrat's economic platform doesn't benefit the middle class any more than the Republican's economic platform. In fact, one could argue that Democratic economic policies perpetuate poverty and feed class warfare. So really, they're simply perpetuating a lie to feed political desires.

Here's my question: Why are Chemistry and Physics required classes to graduate from high school, but Economics is not? Why can most high school seniors solve any basic chemical formula, but not balance a check book? Maybe there is something in keeping people uninformed. It creates the ability to tap in to these "feelings" arguments.

[TheGame]

Originally Posted by Bond

Here's my question: Why are Chemistry and Physics required classes to graduate from high school, but Economics is not?

Economics is a requirement at all the high schools in my town.

By the way, if you haven't noticed I've pulled out of the economic discussion in his thread. The reason being that I don't want to argue off of anything but results. Everyone is quickly jumping on Obama's back about his plan, even though nothing he has done so far has affected the economy whatsoever.

The republicans had their chance to help the economy, but had a historic fail. The reason for the big fallout is the government not taking enough action and setting stricter regulations for the banks. The reason they didn't do that is because the republicans where over the government at the time, and allowed it to happen.

[Professor S]

Originally Posted by TheGame

Economics is a requirement at all the high schools in my town.

By the way, if you haven't noticed I've pulled out of the economic discussion in his thread. The reason being that I don't want to argue off of anything but results. Everyone is quickly jumping on Obama's back about his plan, even though nothing he has done so far has affected the economy whatsoever.

The only blame I place on Obama is that he's pushing for "a" plan, not this one. I believe he fears inaction to crisis and how it will shape his public opinion. The bill itself was not written by him, but I think he's felt a little pressure to back it even though even he has disagreements. But in the end, if thats true he's suffered a failure of leadership.

The republicans had their chance to help the economy, but had a historic fail. The reason for the big fallout is the government not taking enough action and setting stricter regulations for the banks. The reason they didn't do that is because the republicans where over the government at the time, and allowed it to happen.

Actually, you could make the argument that regulation helped create the problem. It's called the Community Reinvestment Act that was signed into law by Pres. Carter and expanded by Pres. Clinton. Basically, the act twisted the arms of lenders to offer loan products to low income people who would ordinarily not be approved. This created the need for "bad loans", such as interest only adjustable rate mortgages (ARMs) that were traditionally only for investors who wanted to "flip" houses for quick profit and lower their overhead created by carrying a mortgage from month to month until the house sold. These loans made the homeowners especially vulnerable to time constraints (most readjusted in 5 years for much higher monthly costs) and market conditions (interest only for the first few years, so when the market takes a hit and the owner has to sell he has little to no equity in house). This created whats called "upside down" mortgages, where the owner owes more than the house will bring on the open market and we find ourselves in the housing mess we're in right now.

Also Fannie Mae was compensated by the government for every "bad loan" they acquired from loan originators (those asses are another topic), so literally we all helped to create this mess using our tax dollars. We can thank Barney Frank for that mess, who is a democrat and somehow got out of this entire debacle unscathed.

Not every lender abided by the CRA, and while they lost out on immediate government incentives, those that didn't follow the act have proved to be more resillient in these times (Wells Fargo for example) but even these companis are getting hammered by the credit crunch because most large companies traditionally work on credit, not liquid assets.

Now I'm not saying tat there weren't other factors (loan originators beign a big one), but the topic you posed is about regulation and making blind statements blaming one party or another doesn't help the matter. The fact is that regulation doesn't, the right kind of regulation helps. Also, more than one party was responsible for this debacle, so our discussion should be about IDEAS, not who came up with those ideas.

Keep in mind FDR installed more regulations than one would care to remember, and also resided over the longest (8 years, and it was getting WORSE before WWII, not better) and most severe economic duldrum in American history. If we'e not careful, rushing to place blame and change the nature of economy can do far more harm than good.

[Professor S]

Back to the stimulus package, probably the biggest and most obvious mistake is the complete lack of any incentives for investment. Our stock market is down almost 50% and from what I've read there were ZERO credits or tax cuts for capital gains or anything else that would spur investment. We can see the effects of this ommission in how the market has reacted, IMO

Also, most the tax "cuts" appear to be credits based on specific qualifiers, which is a big mistake, IMO. Just let EVERYONE share in the relief, not just those with childen or kids in college. I may be wrong, but from what I understand tax credit monies are realized during the refund process making then work more like the useless stimulus checks we got last year. Tax CUTS would have put more money in the pockets of everyone on a regular basis, which makes them less "found money" and more of a manageable boost. Not only that, but I believe tax credits are a trick the government plays on you to give the impression that it's THEIR money, not YOURS. To me refundable tax credits are the equivalent and getting a Christmas present, then rewrapping it and giving back to the person who gave it to you with the thought they'll never notice.

I may be wrong on this, though, as the recovery website was VERY vague about pretty much everything.

[Bond]

Originally Posted by TheGame

Economics is a requirement at all the high schools in my town.

That makes me a happy camper.

By the way, if you haven't noticed I've pulled out of the economic discussion in his thread. The reason being that I don't want to argue off of anything but results. Everyone is quickly jumping on Obama's back about his plan, even though nothing he has done so far has affected the economy whatsoever.

I thought we were talking about historic results of tax cuts back on page three?

This idea of how to break out of a recession is nothing new. The results will be rather predictable: a short-term boost that sets our economy up for the next, inevitable, bust.

[Bond]

Looks like Gov. Jindal is going to refuse some of the stimulus money. I am proud.

[Professor S]

The stimulus package tax breaks offers an extra $13 per paycheck on average through 2009...

http://finance.yahoo.com/news/Stimul...-14422717.html

Woohoo?

[The Germanator]

I find that part to be an interesting theory....The idea being that if someone receives a $600 check, they'll probably save that and throw it right in the bank. But, if they have an extra 10 bucks, maybe they'll go out for dinner or a movie because it seems like a more frivolous amount it might turn into frivolous spending. A small step, but probably a good one.

[Bond]

Gov. Jindal talks about the Stimulus Package on Meet the Press:

[Professor S]

Originally Posted by The Germanator

I find that part to be an interesting theory....The idea being that if someone receives a $600 check, they'll probably save that and throw it right in the bank. But, if they have an extra 10 bucks, maybe they'll go out for dinner or a movie because it seems like a more frivolous amount it might turn into frivolous spending. A small step, but probably a good one.

If anything I think it will get thrown into diapers/food/gas etc. The number is so small it's almost too little to be considered beyond necessities, much less stimulus, IMO. The question we have to ask ourselves is this: Does $13 a week build any confidence in a frightened consumer base?

I'm not a fan of tax payers receiving a big check once a year, for reasons I've talked about earlier, but I also don't think an extra $13 a week is going to help anyone pay their mortgage, spring for the extra bedroom addition they need or buy a new car. Stimulus is intended to stimulate the economy that makes work, and work creates jobs.

I've been biding my time on judging the stimulus, hoping that it will work despite my philisophical objections, but I'm confident enough to say that this stimulus bill will fail. The more I read about this stimulus, the more I realize that it isn't one. Small businesses have receive little to no help (unless small business regularly give out huge bonuses and buy private aircraft), and they employ over half of Americans. The middle class has received little to no help. So far the only groups that have made out on any of these legislative actions are large corporations and those that don't pay taxes in the first place because they'll be receiving free money through "tax credits", and are very unlikely to create any jobs with only a few hundred dollars extra a year.

There is NO stimulus to investment at all, and we see the results in how the stock market has reacted to the bill. Investment FUNDS our private enterprise and creates jobs, and it's been ignored.

The housing bill aids those that entered into bad mortgages and speculated using risky loan products, but doesn't help people who signed good motgages but have been laid-off and are having trouble making payments. It's pathetic and rewwards people for making poor choices, rather than helping everyone in trouble across the board. You know what would help people pay these mortages? Keeping a lot more of their own money.

Meanwhile small businesses and the middle class are left holding the bag, with the slim hope that public works projects will get the economy going again... the only problem is public works have NEVER improved the economy or created long term jobs, as illustrated in the Great Depression.

It's just so frustrating to see such opportunity get squandered because politicians only care about private enterprise as far as their campaign contributions take them. It's either big business or no business when it comes to stimulus help... meanwhile storefronts in my area keep emptying and unemployment rises.

[Professor S]

Here we go!

http://www.politico.com/news/stories/0209/19165.html

If we won't let companies fail, we only enable more failure. LET THEM FAIL. The fact is whethere or not the assets they hold are toxic, they are worth a lot, and someone will purchase them and the company. If the government continues to enable this type of poor management, we will never see an organic, darwinistic reformantion of the financial sector.

Every great success is the result of failure. Failure informs us, while not letting companies fail simply promotes medicrity or worse. Its actions like these that will EXTEND our recession, not improve it.

[Professor S]