$825 Billion Stimulus Plan

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[quote author="skek" date=1233212723]Here's an excerpt from John Campbell's report on the "Stimulus" Plan:



<blockquote>* According to the Democrats? own committee reports, this bill will create 3.7 million jobs. That means the total cost per job is $222,972;

* There are 152 specific and separate appropriations in the bill;

* Despite President Obama?s call for infrastructure spending, the bill contains only $30 billion for roads and highways. That?s less than 4% of the total bill;

* This bill however contains $141 billion for education spending in order to ?prevent teacher layoffs.? We know the problems schools are having. We can debate whether more money equates to better schools. But you cannot argue that this money creates any short-term stimulus or that there are any downstream jobs created. If you want to do this, fine. But don?t try to fool people by calling it stimulus. It?s just spending;

* There?s $50 million for the National Endowment for the Arts, $200 million to pay AmeriCorps ?volunteers? (how are you a volunteer if you are paid anyway?), $600 million for the government to buy new cars (although you maybe can?t afford one), and $500 million to ?modernize? the NIH campus.



But one of the biggest areas of disagreement is the so-called ?tax cut? portion of the bill. The majority of the ?tax cuts? ($145 billion) will be a $500-$1000 rebate which no one earning over $75,000 ($150,000 joint return) will receive but anyone can receive it even if they don?t pay taxes. This is not a tax cut plan; it is a wealth transfer plan. The people who pay the most taxes get nothing and the people who already pay no taxes get something. It was debate over this section of the bill that caused President Obama to quip ?I won? to explain to Republican leadership why he would not change this section of the bill. This is similar to the ?rebates? which were sent out in the middle of last year (which I opposed). Since then, it has been widely accepted as a stimulative failure by almost every economist. So why repeat that failure again? Perhaps the real goal is to ?spread the wealth around? rather than stimulus?</blockquote>


I think it is fair to say that this is an $825B "nyah nyah, we won, we get to spend pork money on liberal special interest projects" spending bill. Any stimulus that occurs will be purely by accident.



And frankly, who can blame the Dems? The Republicans did the same thing during their tenure in the majority, meaning that there is no political risk to being free spenders in Congress. Both parties have proven themselves to be friends of "Big Government."</blockquote>


Not mentioned in the Wall Street Journal article is <a href="http://www.drudgereport.com/flashsb.htm">$335 million to prevent STDs.</a>
 
[quote author="bltserv" date=1233219980][quote author="Oscar" date=1233219090][quote author="green_cactus" date=1233217656][quote author="awgee" date=1233217248][quote author="green_cactus" date=1233024257]



You need to listen to <a href="http://www.npr.org/templates/story/story.php?storyId=99871329">this</a> to understand how this stimulus plan will work.</blockquote>


Mr. Cactus - It would seem to me that a part of "<em>understanding how this stimulus plan will work</em>", should include understanding where the money to pay for it will come from. I may have missed something, which happens quite often in my case, so I am hoping you can help me out and help me to understand where the $825 billion dollars will come from.</blockquote>


You need to chillax ... this was just a funny piece I heard on NPR that I felt like sharing. It ties in nicely the more dubious aspects of the stimulus plan and how they will help our GDP.



<em>Where</em> will this money come from? We might as well look at the end of a rainbow for that one ...</blockquote>
Try your bank account, wallet, under your mattress, etc. What awgee is implying is that we are making this $825 Billion up out of thin air and expecting future tax payers to pay it back in the form of the yield and principle of Treasuries. Borrow now, spend now, pay later. Sound fiscal planning brought to you by a Democrat-controlled government.</blockquote>


Better to spend it here than more Infrastructure in Iraq ?

We spent that much on our little spreading of Democracy experiment.

Thanks GW.</blockquote>


<a href="http://www.barackobama.com/issues/fiscal/">Obama Fiscal Policy</a>



<strong>Barack Obama will restore fiscal discipline to Washington:

Obama and Biden review the federal budget line by line and eliminate programs that don?t work or are unnecessary.</strong>



<strong>Reinstate PAYGO Rules: Obama and Biden believe that a critical step in restoring fiscal discipline is enforcing pay-as-you-go (PAYGO) budgeting rules which require new spending commitments or tax changes to be paid for by cuts to other programs or new revenue. </strong>



I must have missed what programs they are cutting because we are spending and cutting taxes.
 
[quote author="trrenter" date=1233228129]



<a href="http://www.barackobama.com/issues/fiscal/">Obama Fiscal Policy</a>



<strong>Barack Obama will restore fiscal discipline to Washington:

Obama and Biden review the federal budget line by line and eliminate programs that don?t work or are unnecessary.</strong>



<strong>Reinstate PAYGO Rules: Obama and Biden believe that a critical step in restoring fiscal discipline is enforcing pay-as-you-go (PAYGO) budgeting rules which require new spending commitments or tax changes to be paid for by cuts to other programs or new revenue. </strong>



I must have missed what programs they are cutting because we are spending and cutting taxes.</blockquote>
Never confuse a candidate with a politician.
 
[quote author="cdm" date=1233221308]awgee,



All of the money to be used in the stimulus will have to be borrowed, via the issuance of Treasury notes. Some will be issued through normal auctions. However, the government wants to keep interest rates down, borrowing the entire sum via these auctions may cause the interest rates to rise. As a result, the FOMC voted today to allow the Fed to "monetize" purchases of Treasury notes. Where will the Fed get this kind of money? That's where the term "monetize" comes in - they wil print it (or more accurately, just create it electronically).



This is the part that really bears scrutiny. Most analysts are now becoming highly sceptical of the efficacy of <em><strong>this</strong></em> stimulous plan, based on what the spending is for, and when it will be spent (for example, whatever you may think about reimbursements for childcare, thay are not stimulative). Later this year, and next year as well, there are likely to be more stimulous plans. There is a very real likelyhood that the Fed will "monetize" 2 to 3 trillion dollars over the next three years. That would mean in influx of additional currency equal to about 15 to 20 percent of GDP. That is a big number, and once we bottom, the fed will have to take it back out (otherwise we are on the road to Zimbabwe).



It is the getting it out that will be painful. Also, we will have to start paying for this debt, which will probably result in a hefty tax increase, that comes about the same time that the Fed starts jacking interest rates.</blockquote>


Thank you for your kind help and explanation.

I asked Green Cactus for some help and he or she told me to chill.
 
[quote author="Oscar" date=1233228366][quote author="trrenter" date=1233228129]



<a href="http://www.barackobama.com/issues/fiscal/">Obama Fiscal Policy</a>



<strong>Barack Obama will restore fiscal discipline to Washington:

Obama and Biden review the federal budget line by line and eliminate programs that don?t work or are unnecessary.</strong>



<strong>Reinstate PAYGO Rules: Obama and Biden believe that a critical step in restoring fiscal discipline is enforcing pay-as-you-go (PAYGO) budgeting rules which require new spending commitments or tax changes to be paid for by cuts to other programs or new revenue. </strong>



I must have missed what programs they are cutting because we are spending and cutting taxes.</blockquote>
Never confuse a candidate with a politician.</blockquote>


Yes but that has to be some type of record on breaking campaign promises. He would have signed that the day he was inagurated if those damn democrats in Congress would have worked faster.
 
[quote author="awgee" date=1233228491][quote author="cdm" date=1233221308]awgee,



All of the money to be used in the stimulus will have to be borrowed, via the issuance of Treasury notes. Some will be issued through normal auctions. However, the government wants to keep interest rates down, borrowing the entire sum via these auctions may cause the interest rates to rise. As a result, the FOMC voted today to allow the Fed to "monetize" purchases of Treasury notes. Where will the Fed get this kind of money? That's where the term "monetize" comes in - they wil print it (or more accurately, just create it electronically).



This is the part that really bears scrutiny. Most analysts are now becoming highly sceptical of the efficacy of <em><strong>this</strong></em> stimulous plan, based on what the spending is for, and when it will be spent (for example, whatever you may think about reimbursements for childcare, thay are not stimulative). Later this year, and next year as well, there are likely to be more stimulous plans. There is a very real likelyhood that the Fed will "monetize" 2 to 3 trillion dollars over the next three years. That would mean in influx of additional currency equal to about 15 to 20 percent of GDP. That is a big number, and once we bottom, the fed will have to take it back out (otherwise we are on the road to Zimbabwe).



It is the getting it out that will be painful. Also, we will have to start paying for this debt, which will probably result in a hefty tax increase, that comes about the same time that the Fed starts jacking interest rates.</blockquote>


Thank you for your kind help and explanation.

I asked Green Cactus for some help and he or she told me to chill.</blockquote>


Not to chill ... to chillax .... :P
 
[quote author="trrenter" date=1233228129][quote author="bltserv" date=1233219980][quote author="Oscar" date=1233219090][quote author="green_cactus" date=1233217656][quote author="awgee" date=1233217248][quote author="green_cactus" date=1233024257]



You need to listen to <a href="http://www.npr.org/templates/story/story.php?storyId=99871329">this</a> to understand how this stimulus plan will work.</blockquote>


Mr. Cactus - It would seem to me that a part of "<em>understanding how this stimulus plan will work</em>", should include understanding where the money to pay for it will come from. I may have missed something, which happens quite often in my case, so I am hoping you can help me out and help me to understand where the $825 billion dollars will come from.</blockquote>


You need to chillax ... this was just a funny piece I heard on NPR that I felt like sharing. It ties in nicely the more dubious aspects of the stimulus plan and how they will help our GDP.



<em>Where</em> will this money come from? We might as well look at the end of a rainbow for that one ...</blockquote>
Try your bank account, wallet, under your mattress, etc. What awgee is implying is that we are making this $825 Billion up out of thin air and expecting future tax payers to pay it back in the form of the yield and principle of Treasuries. Borrow now, spend now, pay later. Sound fiscal planning brought to you by a Democrat-controlled government.</blockquote>


Better to spend it here than more Infrastructure in Iraq ?

We spent that much on our little spreading of Democracy experiment.

Thanks GW.</blockquote>


<a href="http://www.barackobama.com/issues/fiscal/">Obama Fiscal Policy</a>



<strong>Barack Obama will restore fiscal discipline to Washington:

Obama and Biden review the federal budget line by line and eliminate programs that don?t work or are unnecessary.</strong>



<strong>Reinstate PAYGO Rules: Obama and Biden believe that a critical step in restoring fiscal discipline is enforcing pay-as-you-go (PAYGO) budgeting rules which require new spending commitments or tax changes to be paid for by cuts to other programs or new revenue. </strong>



I must have missed what programs they are cutting because we are spending and cutting taxes.</blockquote>


The cuts will come from defense.
 
[quote author="green_cactus" date=1233230336][quote author="awgee" date=1233228491][quote author="cdm" date=1233221308]awgee,



All of the money to be used in the stimulus will have to be borrowed, via the issuance of Treasury notes. Some will be issued through normal auctions. However, the government wants to keep interest rates down, borrowing the entire sum via these auctions may cause the interest rates to rise. As a result, the FOMC voted today to allow the Fed to "monetize" purchases of Treasury notes. Where will the Fed get this kind of money? That's where the term "monetize" comes in - they wil print it (or more accurately, just create it electronically).



This is the part that really bears scrutiny. Most analysts are now becoming highly sceptical of the efficacy of <em><strong>this</strong></em> stimulous plan, based on what the spending is for, and when it will be spent (for example, whatever you may think about reimbursements for childcare, thay are not stimulative). Later this year, and next year as well, there are likely to be more stimulous plans. There is a very real likelyhood that the Fed will "monetize" 2 to 3 trillion dollars over the next three years. That would mean in influx of additional currency equal to about 15 to 20 percent of GDP. That is a big number, and once we bottom, the fed will have to take it back out (otherwise we are on the road to Zimbabwe).



It is the getting it out that will be painful. Also, we will have to start paying for this debt, which will probably result in a hefty tax increase, that comes about the same time that the Fed starts jacking interest rates.</blockquote>


Thank you for your kind help and explanation.

I asked Green Cactus for some help and he or she told me to chill.</blockquote>


Not to chill ... to chillax .... :P</blockquote>


Either, thanks for your help.
 
[quote author="skek" date=1233236924][quote author="WINEX" date=1233231863]The cuts will come from defense.</blockquote>


...and from our after-tax income.</blockquote>


This is really quite a dilemma. Normally I would give you a "Thanks" for that post, but somehow it doesn't seem appropriate to thank someone for reminding me that I will be spreading the wealth...
 
Stimulus Plan? Why is it being called a stimulus plan?

Would it not be more honest and accurate to call it the "Screw you, Republicans. We won and we are going to do whatever we want and shove your face in it." Plan?
 
[quote author="awgee" date=1233269964]Stimulus Plan? Why is it being called a stimulus plan?

Would it not be more honest and accurate to call it the "Screw you, Republicans. We won and we are going to do whatever we want and shove your face in it." Plan?</blockquote>
Someone on the morning shows pointed out that there really isn't anything new in this plan, rather they are increasing funding in existing programs. The job "creation" seems to be in the limited amount of infrastructure spending, which may explain why Obama has been consistently saying "create or save 4 million jobs"; the only jobs being saved are in the public sector. The tax cuts both increase the number of people taken off the tax rolls and increase the amount of money those people will get when filing for a tax "return".



No wonder the House Republicans refused to vote for it.
 
[quote author="skek" date=1233282310]The spending plan includes protectionist measures for iron and steel industries. Not quite Smoot Hawley, but haven't we tried this before?



Elections matter. The Republicans couldn't offer a meaningful alternative in 2008. They have an opportunity to return to conservative principles now, and not a moment to waste.</blockquote>


You will find GW Bush did the same thing when the Chinese dumped below cost steel on the market in 2002. FYI: Its one of the few things we still make here in the US.



<a href="http://en.wikipedia.org/wiki/2002_United_States_steel_tariff">http://en.wikipedia.org/wiki/2002_United_States_steel_tariff</a>
 
<a href="http://www.msnbc.msn.com/id/28914110/">GOP leaders say party must change</a>



""As Republicans, we know that common sense conservative principles aren't regional. But I think we have to admit that our sales job has been,"



I think that Obama and his team did a great job selling Obama. I would think moving forward both parties would be wise to follow the blueprint used by Obama's team.



My honest hope would be that both parties decide to agree on pushing this country in the right direction. To me it seems the democrats are just trying to change the course of the Bush administration and doing a complete 180.



Well if Bush was heading due South and a complete 180 it to go due North we may have a problem. What if the correct way to go was due East?



Doing the opposite of what somebody is doing that is wrong is not necessarily the right thing either.



I like Obama's idea that all spending should be scrutinized but obviosly that is not being done on this Stimulus plan.



The reason the economy is frozen is that banks will not lend money, not even to qualified borrowers in many cases. I am not saying as a rule qualified borrowers can't ever get a loan. Not until people and business' that are credit worthy can borrow money will the economy unfreeze.



This is treating a symptom of the disease while the disease is left unchecked.



I personally think if we are going to throw $850 billion more at the problem we should just create the new "Bank of the USA". Make all $850 billion dollars available to borrow by credit worthy people with reasonable interest rates. Make all loans coming from the Bank FULL RECOURSE, like a student loan. No loans by the B OF USA can be discharged in a banruptcy. The banks of course can only use standard underwriting and full documentation or full collateral must be in place.



That would spark the economy in area's that would truly be viable.
 
[quote author="skek" date=1233284844][quote author="bltserv" date=1233284311][quote author="skek" date=1233282310]The spending plan includes protectionist measures for iron and steel industries. Not quite Smoot Hawley, but haven't we tried this before?



Elections matter. The Republicans couldn't offer a meaningful alternative in 2008. They have an opportunity to return to conservative principles now, and not a moment to waste.</blockquote>


You will find GW Bush did the same thing when the Chinese dumped below cost steel on the market in 2002. FYI: Its one of the few things we still make here in the US.



<a href="http://en.wikipedia.org/wiki/2002_United_States_steel_tariff">http://en.wikipedia.org/wiki/2002_United_States_steel_tariff</a></blockquote>


...and protectionism is economically inefficient regardless of which party pursues it. I can understand why it is politically popular among the masses, especially during difficult economic times, but in the long run protectionism leads to counter-protectionism and a smaller global economic pie for everyone to share.</blockquote>


Isn't it amazing that someone who claims to be economically literate apparently isn't familiar with comparative and competitive advantage?
 
[quote author="skek" date=1233284844][quote author="bltserv" date=1233284311][quote author="skek" date=1233282310]The spending plan includes protectionist measures for iron and steel industries. Not quite Smoot Hawley, but haven't we tried this before?



Elections matter. The Republicans couldn't offer a meaningful alternative in 2008. They have an opportunity to return to conservative principles now, and not a moment to waste.</blockquote>


You will find GW Bush did the same thing when the Chinese dumped below cost steel on the market in 2002. FYI: Its one of the few things we still make here in the US.



<a href="http://en.wikipedia.org/wiki/2002_United_States_steel_tariff">http://en.wikipedia.org/wiki/2002_United_States_steel_tariff</a></blockquote>


...and protectionism is economically inefficient regardless of which party pursues it. I can understand why it is politically popular among the masses, especially during difficult economic times, but in the long run protectionism leads to counter-protectionism and a smaller global economic pie for everyone to share.</blockquote>


I have a vested interest in the Steel business. My family has owned land since the Civil War in a part of the Minnesota Mesabi Range. In the 80`s the entire steel business was wiped clean. All the Unions and thousands lost jobs. Closed plants. Then in the late 90s. The business began to come back. Then the Chinese decided to DUMP steel well below their cost to produce in 2002. Dont lose track its our money that they are using. They are converting their slave labor into the ability to target our industries that remain OURS. Do you want the United States to use Slave labor to compete with China ? Can you live on .50 Cents an hour? Global Economic Pie ? Say that when it takes your paycheck away and another country is obviously selling steel well below its cost to manufacture to disrupt competition.
 
[quote author="skek" date=1233286880][quote author="bltserv" date=1233286080]I have a vested interest in the Steel business. My family has owned land since the Civil War in a part of the Minnesota Mesabi Range. In the 80`s the entire steel business was wiped clean. All the Unions and thousands lost jobs. Closed plants. Then in the late 90s. The business began to come back. Then the Chinese decided to DUMP steel well below their cost to produce in 2002. Dont lose track its our money that they are using. They are converting their slave labor into the ability to target our industries that remain OURS. Do you want the United States to use Slave labor to compete with China ? Can you live on .50 Cents an hour? Global Econmic Pie ? Say that it when it takes your paycheck away and another country is obviously selling steel well below its cost to manufacture to disrupt competition.</blockquote>


Because you have a vested interest in the steel industry, I can understand why you feel the way you do. But you are confusing two issues: (1) comparative/competitive advantage, and (2) unfair competition. If China can fairly produce steel cheaper than the United States, it is in the global economic interest that China produces more steel and we produce less. Granted, that will disrupt the American steel industry, and it is our obligation to help those displaced, but we all benefit by moving steel production to the low-cost producer.



On the other hand, you are absolutely right that China and many other developing nations compete unfairly. Whether through currency manipulation, slave labor, lax intellectual property enforcement or dumping, such actions prevent the global marketplace from acting as a level playing field. So I agree with you that global trade norms must be enforced. But, they aren't enforced by engaging in protectionism, we have multilateral institutions through which these disputes can be resolved, including the WTO. If I recall, in recent years, both the EU and US have pursued complaints against the Chinese for steel dumping.</blockquote>


This is one area that our Country is very hypocritical. We have these high standards when it comes to how we are allowed to run business ton's of labor laws to protect the workers etc.



We have laws in place that are there to protect the environment, where we can drill for oil, how we can burn coal, maximum emissions.



I am not sayin any of that is wrong. What we should do though is close our borders from any country that does not have the same standards.



If we are not allowed to burn dirty coal in production then we should close our borders to a country that allows the burning of dirty coal. We have strict use for "child labor." If a country allows child labor we should close our boarders to that country.



What we have done is said "We do not condone that in America" we do however condone you doing it to your citizens.



China could dump almost any product on the world market below market value. They have the largest workforce and that workforce doesn't have any of the protections that most industrialized countries have.



It is quite hypocritical that we object to child labor, employee rights and polution here but have no problem importing products from countries that don't.
 
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