18
Jan
Economic Stimulus?
Why does an economy that we’ve been told is doing just fine require a “shot in the arm?”
President Bush urged Friday for “direct and rapid” tax relief for both U.S. consumers and businesses, calling such a plan the country’s “most pressing economic priority.” Returning money to consumers and firms would be “a shot in the arm” that would boost the economy, he said.
B-b-b-but the economy is doing peachy! It seems as though even Pelosi is on board with this.
Pelosi told reporters Thursday morning that the package could be completed within 30 days. Her Republican counterpart, House Minority Leader John A. Boehner of Ohio, echoed that sentiment during his own briefing minutes later. “It needs to happen quickly,” the Republican leader said.Personally, I think this is a joke. But it’s nice to see ol’ Nance standing up to the Administration again, isn’t it? This will get bogged down of course. Pelosi will insist (like Hillary did today on All Things Considered – where she also admitted she doesn’t read important contracts) that much of the money go to those who need it most (a.k.a. people who don’t pay federal taxes.) If it’s going to go through, I would prefer to see any money go to the middle class. But I think this ain’t going anywhere in 30 days. Watch. I’d like to see the whole idea scrapped. Ride it out.
The economy is either doing great, or it isn’t. Which is it? And what will you do with your $800? I plan on going to the sidewalk next to The Home Depot and paying an illegal alien the whole shebang to paint the inside of my house. I will then force him to sit though a lecture on why it is he, not the incompetence of the current administration, that is responsible for the woes of this country.
Not that he’ll be able to understand me.
LiberalTarian
Sigh. Well, I guess they will go for the quick fix.
Deckchairs. Titanic.
Face
Sorry to be so out-of-the-loop here, but what the heck is this $800 you’re talking about? Everyone gets a $800 check from the gubment?
Seriously? Sah-wheet. Or is there a catch?
Jeff
Doesn’t this simply come out of next years tax refund?
caustics
Yes. And we were due for a market correction anyway, so shut up. Tax Cuts!
/wingnut
4tehlulz
That’s how it worked last time.
Dreggas
Shit…meet fan
Z
Try to find a gay, liberal illegal alien, John.
Dreggas
I plan to buy canned goods, ammunition, and drinking water.
Scotty
Because they wish it to be that way. Just like they are wishing Iraq will turn out well, energy prices will fall, and that George W. will go down as one of the greatest presidents this nation has ever had.
Also, they lie.
wasabi gasp
As long as uninsured sick kids get no relief, I’m good with it.
jnfr
We’ll spend our $800 on duct tape and sheets of plastic. Because you can never be too careful!
Last time the $600 we got matched what we would have been refunded, so we just got our refund early. Which is okay and all, but I feel bad for people who didn’t realize what the check was and ended up having to pay it back at tax time.
Tim F.
I think I’ll use that cash as down payment on an interest-only option ARM. It’s the only responsible thing to do.
Dennis - SGMM
Sure, they’ll throw us a fish. Then they’ll take it back next year. Meanwhile, sometime in August or September, they’ll bail out the lenders, bond holders, etc. with far more money. There will be some loose talk about regulation and oversight with the result that a piss-ass, watered-down bill will be passed and that’ll be it until the next time.
Reminds me of that episode in Catch 22 where Yossarian’s squadron is awarded medals for bombing the wrong town. If you fuck up colossally enough then the gov has no choice but to reward you.
Zifnab
This will fly through Congress right up until the wingnuts demand something wingnuty – like having some wacko judge appointed or getting a 150% corporate tax cut worked in – and then the gravy train will hit a pile-up. Someone sane in the Democratic Party will object because the relief bill somehow gives telecomm companies amnesty. There will be a mild kershuffle, Bush will threaten to veto anything that doesn’t come with a blow job for Big Oil, David Broder will muss about how nice it would be if everyone could just get along and cave to the Republicans – then pimp Bloomberg in ‘08, David Obey or Harry Reid will point out that we really do need a consensus so we have to be bipartisan. Finally, a bill will be signed that gives tax relief to yaht owners, extends the War in Iraq for six more months, condemns Daily Kos for using foul language, and Super Sizes everyone’s fries at McDonald’s for a week.
Victory will be declared by Washington DC, and everyone will get confused when Dennis Kucinich is elected President by an angry pitch-fork wielding mob of weekday bloggers.
gypsy howell
You’re right about all of it, zifnab, until you get to the Dennis Kucinich part.
The rest will all come true.
Dennis - SGMM
You forgot making the Bush tax cuts permanent. repealing the Estate Tax and having waterboarding declared to be a treat. Otherwise, you nailed it.
Haltelcere
Yea, the hell with the poor. They don’t count. Give me mine.
If I get any money from the government, I’ll apply it to either 1) any credit card debt I have or 2) apply it to my outstanding student loans. I won’t make a special trip to Wal-mart, I won’t treat my wife to any more dinners than usual, Etc. Basically, what I will do with the money will not help the economy at all. But,
Basically for this money to have the biggest benefit to the economy it needs to go to the poor and middle class who have overextended themselves, not the middle class that have their finances (and some poor people too) in order.
Z
I have a great suggestion for some wingnuttery. They write a very large check to the Conservatives Against Stupid Hippies (CASH), and as president, I will make sure my organization spends the money protecting the homeland from dirty, smelly hippies, and their friends the gay, liberal, illegal alien terrorists.
Dreggas
I think I’ll use that cash as down payment on an interest-only option ARM. It’s the only responsible thing to do.
And I will hunt you down and beat you like a red headed step child. :D
J
Clearly the solution to all our problems is to distribute the $800 in the form of Halliburton preferred stock certificates, so that all Americans will see where their true interests lie.
Downpuppy
We got into this mess by spending too much & building $43 trillion in private debts.
So now we need to spend an extra $145 billion & bulk up our public debt.
It’s so obvious!
laneman
I got my eye on ponies, lots and lots ‘o ponies.
We have a half-wit in the WH who has appointed more half-wits (if only because they follow his direction) and you expect rationale for the painful stupid that bleeds from the goobernmint?
laneman
Criticizing redheads should be a capital offense, really. So stop.
Dennis - SGMM
Does that mean, by extension, that Blonde Jokes are out, too?
merciless
I have this picture in my head of George Bush, looking like Steve Martin in The Jerk, in a bathrobe, bending over an overflowing desk, writing out the checks one by one.
Then he picks up his paddle-ball game and announces he doesn’t need another single thing! and walks out the door, pants around his ankles.
Terminus Est
If you don’t mind, I will take my $800 or so. I am not wealthy enough to have received benefits from ANY of the so-called tax cuts since Bush began destroying the country. In fact, almost no matter what I do I always OWE money at tax time. I’ll take the $800 and hope that THIS time I will only owe just shy of $100 to Halliburton, Blackwater, the entire war machine, etc.
Terminus Est
Yes, there is a catch. It counts against you on your 2008 taxes…unless you earn a million or better a year, of course. Then it’s tax-free!
laneman
Nope, just redheads, Me, wife and 2 kids all redheads. Blondes bottom of teh food-chain
AkaDad
I’m going to prop up the economy with hookers and meth.
Ted
That’s pretty much what Bill Kristol said.
laneman
Does meth pay from the provider side?
Zifnab
If it makes you feel better, I’m sure a fair number of Bush Taxcutees had healthy investments in Bear Sterns and ETRADE.
You know what would really pull this country’s nuts out of the fire – from a Government Nanny-State perspective? Play the Bank of America game and buy whatever isn’t Countrywide.
Go back and have the government buy up all the shitty bonds at their outrageously shitty prices. Tell all the would-be homeowners that they aren’t getting displaced and that they can pay off their debts at a modest rate – maybe the 5-7% everyone was getting promised before readjustment.
In exchange for bailing out the securities industry, set up an agency with formal standards for handling mortgages and mortgage-backed securities to prevent the slicing-and-dicing that hid all the money and to rate the bonds accurately so that a $300k loan to Joe Lawncare Worker doesn’t get rolled into a AAA Bond.
Homeowners get stability, financial institutions don’t go belly up, more regulation of banking = less of this shit in the future = good, and the government even has the potential to turn a profit on its investment 20 years down the line.
That would be my suggestion. But giving everyone $800 could work too. Who knows?
laneman
As you well know, and are intimating, the ponies will die once you take them home.
KG
This is a pet peeve of mine… will someone please define the term “middle class”. I always have this notion that when people start talking about the middle class, they only have a vague idea of what it is. Which all fine and good, until you say that middle class is $50,000/year and you’re talking about southern California. Because that’s not really middle class out here.
Dug Jay
Since it appears that most here don’t want the $800/$1600 for a couple, I suggest that you write your legislator urging that the funds be transferred only to those who elect to recieve them.
laneman
$50k / year in DC is basically subsistence wages.
The term has NO meaning.
Terminus Est
Hell, $100,000/yr isn’t “middle class” in CA. My wife keeps receiving headhunter calls from companies in CA but she wont even entertain the offers because the amount they offer, though a bit higher than she pulls in here in the Midwest, would put us further down the ladder than we are here. The cost of living is way WAY too friggin’ high in CA to make a move there even worthy of transient consideration. MAYBE if we could both pull in $125,000/yr it would add up to about equal to what we have here…But then, California isn’t worth the trouble of moving.
Terminus Est
I have a better suggestion. Send the $800 each to me. Maybe then, after I max out my payment into my IRA to minimize the hit I take on taxes, I will actually end up with disposable income RIGHT NOW.
We rarely take vacations, go out to dinner, go to movies (well, this last one is partially due to an abundance of shit at the theaters) because we lack for disposable income after doing everything we can to avoid a REALLY big hit on taxes. Goddamn Rethuglicans and their millionaire worship.
Haltelcere
Ok, everyone who doesn’t want $800/$1600 from the government, raise your hand. Or go ahead and raise both of them. And you, in the back corner, who is searching in the air for ghost cold spots, put your hands down. And that EVP walkman recorder also.
Ok, hands down.
Now, everyone who is saying that how they would spend this $800/$1600 would NOT help the economy short term, now raise your hands (and even you, ghost boy. Unless you plan on buying an $800 thermal camera on Ebay).
Thanks for participating.
the satanic mechanic
Debt… Will spend my $800 paying for Christmas. So it’s like I already spent it, on something, Sort of…
that or a pony. a succulent, juicy, tasty pony.
That’s ConSumpTion!
Conservatively Liberal
Ponies and rainbows for all! Hmmmm, $800.00 hookerbot or eight hundred $1.00 hookerbots? Decisions, decisions. Maybe I ought to ask the Deciderer…
This is just stupid. Not one of those idiots have a real idea what is up with the economy, but it is an election year and it is time to toss more money at whatever will get them re-elected.
I say let the fallout happen, and the sooner the better. My wife and I have no credit card debt (or any other debt), and we were looking for a house (since 2005) but were not stupid enough to get in to something that we could not handle. We saw that the housing market was running on empty and knew that it had to crash sooner or later. We are going to wait for the fallout and buy a home once the prices get back to reality.
Trying to prop up this mess should be a crime. Since much of this mess is criminal, the chance of that ever happening is next to nil. It is interesting to note that lending standards ceased once the bankruptcy bill was passed. Once the financial industry found a way to extract blood from a cabbage, it was free money for everyone.
The Fed cutting the rate is only going to cause more problems down the road.
The Fed: “MORE COWBELL!”
Jake
Bresident Push must be a Valley Girl because his solution to every crisis is “Let’s go shopping!”
Brachiator
Ponies? I thought we were getting peonies.
Most likely, this will be an ADVANCE on an expected refund. The gummint ain’t really giving away free money. Yeah, it’s nice, but it ain’t a cure for the economy. By the way, I have heard, but not seen confirmed, that if you did not have any income tax liability for 2007, no $800 for you.
And if you lost your house in the mortgage debacle, the gummint won’t even have an address to send the money.
It’s sad, but par for the course, that everybody’s talking about stimulating the economy, but don’t have any real answers for the decline in wage income or the contraction of the middle class.
jnfr
That $800 or whatever is already my money. Of course I want it, if it’s due to me. It’s more a question of not mistaking it for something extra. It’s not. It’s the same money you would get back in taxes (or owe in taxes), just a little while early.
KG
laneman – yeah, that was pretty much my thinking too. I always read that 45k (or so) is the median income for a family of 4, and all I can think is, “wow, they must not make much in Wyoming and Mississippi.”
Terminus – I’m a bit biased, since I’m born and raised within 20 minutes of the Pacific Ocean, but I think there are plenty of reasons to move out here. Sure, the COLA is rather high, but you adjust – and it really depends on where you are, if you’re in LA, OC, or SD it’s going to be much higher than the Inland Empire or Imperial County. And compared to someplace like NYC, it’s really not all that bad.
I’m just glad to know that there are other people out there vexed by “middle class” terminology.
Walker
Los Angeles, median family income: $39,942.
Sacramento, median family income: $50,717
San Diego, median family income: $53,060
Granted, San Francisco median family income is $67,809. But other states aren’t dropping the median income that much.
Jay Andrew Allen
In honor of my hero Philip J. Fry, I’ll be using my $800 to buy 266.7 cups of $3 coffee. I’ll either stimulate the economy by way of Starbucks, or I’ll rip a hole in the fabric of space-time. I consider that a win-win.
Kirk Spencer
With all the snark going on I almost dread being serious. Almost…
Under normal circumstances, the checks are the equivalent of a defibrillator to the economy. A short, sharp burst that can get the ‘normal’ process restarted. Thing is, it has to be spent to work.
There’s a balance to it, and (fortunately) nobody’s practiced enough to know the exact. Too little cash and it doesn’t give enough bounce. Too much and people stuff it into savings. That’s one of the errors done last time – way too many people (on the higher income levels) got enough that they invested it instead of spending it.
Like the defib, there are risks. And also like the defib, you’d better be doing a few more things or it isn’t going to be enough – usually isn’t enough.
My guess is that this won’t work this time. Basically, even though a lot of us have been predicting it for some time, the apparent decline – the point where it’s recognized – has been very, very fast. We’re seeing some major financial institutions wondering if they’re going to exist over the long term, or if they’ll be a casualty of effective bank runs.
Added to it are some of the things the current idiot in charge wants to do that are counter-productive. There is something pathetic about demanding that the answer to good times and bad is “more tax cuts.” Worse, of course, when most of those cuts are for the investors, not the spenders. Long term shouldn’t be ignored, of course (though I think we’ve gone overboard). But when it gets in the way of short-term survival, it’s wrong.
KG
Walker, that LA number is for LA proper, you expand outside the city – for example move down to Orange County (where I live) and there are two towns with a median income below 40k (one is Laguna Woods, which is largely made up of a retirement community). Most are above 60k, with a couple over 90k.
There’s also a pretty good spread in the Inland Empire, I’m guessing you’d see the same thing through out LA County. Unfortunately, the numbers aren’t up on wikipedia and I’m too lazy to find them elsewhere.
Dreggas
Walker, that LA number is for LA proper, you expand outside the city – for example move down to Orange County (where I live) and there are two towns with a median income below 40k (one is Laguna Woods, which is largely made up of a retirement community). Most are above 60k, with a couple over 90k.
waves from Santa Ana hello neighbor.
Let’s put it this way I live in Santa Ana, I pull 70k a year gross. I am just staying afloat. You can’t “get ahead” out here on this amount even alone.
sglover
No surprise.
Pelosi EXPLICITLY renounces her Constitutional responsibilities by ruling out impeachment, but boy howdy, hell’s holy hounds won’t stop her from handing out candy to the kiddies.
She’s every bit as much of a disgrace as President Retard.
sglover
Under normal circumstances, the checks are the equivalent of a defibrillator to the economy. A short, sharp burst that can get the ‘normal’ process restarted. Thing is, it has to be spent to work.
See, I don’t get that. I don’t see what it does but forestall—VERY temporarily—a reckoning that the expenditure does absolutely NOTHING to address, and actually exacerbates. These guys are frantically trying to keep the wheels of consumption and spending spinning. And like good autistic economists, they’re completely oblivious to what the spending goes toward.
We may be rushing toward hard, physical constraints—rapidly growing demands for energy, and rapidly diminishing supplies. While industry has got much more efficient over the last several decades, our transportation “system” and land use are wildly out of line with the new realities. With all this recent real estate speculation, so much of it in the exurbs, we’ve been doing practically the OPPOSITE of what we ought to.
We should have been encouraging people to live closer to city centers, and building fast passenger rail lines and urban public transit. Instead, we have completely squandered what may be a critical decade. And this doesn’t even take into account the obscene waste of our stupid desert adventure….. In the (maybe not so) long run, what do we gain by giving the proles $800 so they can essentially do more of the same?
Grumpy Code Monkey
Leveraged out the wazoo, yet still able to (barely) make payments.
At least that seems to be the practical definition (and I am a type specimen).
Michael D.
I know you were probably joking a bit, but that’s not a bad definition, honestly.
Brachiator
Adjust your withholding and you don’t even have to wait until June or whenever.
No matter how you slice it, it’s just smoke and mirrors. As with the last “tax rebate,” the middle class rubes are fooled into thinking that they have miraculously got either a tax cut or their “own money back” while Dubya and his cronies push through real, more substantial and outrageous tax cuts for the wealthy, and those who have a big slice of their income from investments and capital gains.
Here’s a fun example. Let’s take that family of 4 with an income of $50,000.
$50,000 in income all from wages. Tax after child tax credit is $1076.
$50,000 in income all from capital gains. Tax after child tax credit is ZERO.
Here’s another. Married couple, just starting out, no kids.
$50,000 in income all from wages. Tax is $4096.
$50,000 in income all from capital gains. Tax is $1625.
But of course, the wealthy are busy “creating jobs” with their windfalls. That is, when they are not destroying the credit markets and watching thousands lose their jobs and homes as collateral damage from the sub prime mess. Meanwhile, Dubya chortles “Enjoy that $800. Suckers!”
TenguPhule
Or even better, everyone who does elect to receive that $800 bribe gets put into work camps for life instead to pay for what their stupid greed did the LAST TIME they fell for this shit.
Grumpy Code Monkey
It’s a ha-ha-only-serious kind of thing. The poor can’t get credit, the rich don’t need it, and the middle class live on it. We have to finance houses, new cars, and a boatload of other goodies that a consumer-driven economy demands we buy until we just passively drown in our own shit (and Lord knows I’m as much a part of the problem as anyone else).