What would you do to stimulate the economy?
Here are the rules:
It's January of 2009.
You are the president.
You are writing a stimulus package.
Your goal is to turn the worm in 12 months or less.
You are giving a brief address to the American People outlining your proposal.
Go!
Quote from: Gaspar on July 22, 2010, 01:14:12 PM
What would you do to stimulate the economy?
Here are the rules:
It's January of 2009.
You are the president.
You are writing a stimulus package.
Your goal is to turn the worm in 12 months or less.
You are giving a brief address to the American People outlining your proposal.
Go!
I will print a bunch of money and throw it into the economy based on the recommendations of lobbyists and special interest groups. It will create or save millions and billions of jobs.
What did I win?
Here's my speech as President Gaspar (no fainting please).
We are at a crossroads. There are many directions we can travel. Some of those will lead us to prosperity; others will take us deeper into despair. The choices we make now will determine what road we take. It is meaningless for us to play the blame game. There is nothing in the rear-view mirror that will help us move forward. Our focus needs to be on the road ahead.
We intend to pass legislation that will stimulate our economy, and pull us out of this decline. In doing so, I offer this warning to my colleagues in Congress. Now is not the time for politics. I will call out any member of Congress who uses this crisis as a platform to pass unrelated measures or sneak in earmarks designed only to benefit his or her constituency.
I will veto any bill containing even a single strip of bacon. Again . . . Now is not the time for politics.
First: We must get money back into the hands of private industry. There will be no more financial bail-out of banks, but there will be a 200 Billion dollar guaranteed loan program through the banks for private businesses and entrepreneurs. These loans will carry very strict restrictions, and banks that fail to comply will lose eligibility. Private Banks need to be our partners. Doing so will help everyone to prosper.
Second: We have hundreds of billions of dollars in federal programs. We can argue their validity at another time, to do so now would be to engage in politics, and as I said, this is not the time for politics. We will continue to fund all programs at their current levels. But. . .There will be no new programs this year. That's right Congress; you will have to go "cold turkey" for the next twelve months. We simply cannot continue to pile layer upon layer of debt on a nation struggling to survive a recession. Once our recovery is realized we will evaluate the merit of new programs.
Third: Our military spending is disproportionate. For the next twelve months there will be no increases in military spending. No emergency measures. We will continue to fund our existing operations as needed, but, from our commanders, I want recommendations to decrease military spending by 10% over the next twelve months and, if necessary to continue to reduce it by a maximum of 15%. We need a strong military to continue to fight for us, but we also need to fight smarter. We are too quick to become involved as the world's police force. Our allies overseas need to know that we support their efforts towards democracy, but we cannot continue to fight their wars.
Fourth (and finally): You, the American citizen. You are spark. You create the inovations that make this economy run. We live off of your triumphs, and learn from your mistakes. It is you who is responsible for where we choose to go. It is your shoulders that we each stand upon. The federal government is your servant, but nothing more. We speak for you so that the world may hear, but the words are yours.
Your pockets contain bills and coins, each with the face and the stamp of government. This is a contract between us. A contract we often fail to keep. For the next twelve months we owe you. I am proposing a 5% across the board cut in income tax. This will put an average of $1,000/yr back in your pocket. For those of you who own businesses, this may mean more money to hire workers, or bring products to market. For those of you who live from paycheck to paycheck, this may mean more food on the table for your family. For those of you with no paycheck, this opens up a world of opportunities as businesses put this money to work creating jobs.
Again I reiterate; the time for politics is past. There are no Democrats, no Republicans. There are no liberals or conservatives . . . and lobbyists are invited to sit this one out. Now that you are armed with an understanding of what we intend to do. Now that you know the direction we have chosen to take, move forward, and be profitable. Plan for growth, develop, design, innovate, and engage.
You know Gaspar, that's eminently reasonable. Not exactly what I'd do, but also not blindly ideological.
What do you think about the $30 billion small business lending pool presently being resurrected in the Senate that Republicans are lining up against?
Quote from: nathanm on July 22, 2010, 03:12:39 PM
You know Gaspar, that's eminently reasonable. Not exactly what I'd do, but also not blindly ideological.
What do you think about the $30 billion small business lending pool presently being resurrected in the Senate that Republicans are lining up against?
Don't know enough about it, but I'll research it. I think for starters it's too small, but we've blown our wad on a garbage truck already, so it may be better than nothing.
Quote from: Gaspar on July 22, 2010, 03:19:33 PM
Don't know enough about it, but I'll research it. I think for starters it's too small, but we've blown our wad on a garbage truck already,
That's the best I've heard it put yet...
Quote from: Gaspar on July 22, 2010, 03:19:33 PM
Don't know enough about it, but I'll research it. I think for starters it's too small, but we've blown our wad on a garbage truck already, so it may be better than nothing.
Watch out for falling "bailouts." :P
Quote from: Conan71 on July 22, 2010, 03:20:47 PM
That's the best I've heard it put yet...
My dad calls it a "collective congressional fart," because it was composed of all the colonic air that congress had been holding in for the past decade.
I think my speech would be as follows:
"Quit being a bunch of pansies and go spend some damn money."
Probably a good thing I'm not president right now.
First off, our current debt, it is high, but not terribly high no matter what the talking heads say on TV. We are not close to dangerous levels, yet. Debt is secondary for now.
First of all what I would do it what was just done, as a stimulus package and economic stabilizer, extending unemployment benefits is a big deal. First off it's a direct transfer of cash to people that are going to spend the money immediately so the money rolls over in the economy quickly. What's more, it's going to have an ancillary benefit of keeping homes occupied and out of foreclosure. It's like the stimulus checks that Bush II was so fond of, except even better because the people getting this money really need it and aren't going to save it or pay down debt and are unlikely to spend it on a single big ticket item that may well be imported.
Next, the housing vouchers really helped, I would be in favor of continuing those for another year. I would lift the moratorium on drilling in the gulf so long as the companies accept and pay for additional drilling oversight,. We went decades without an accident and there's a lot of economic output idled there. Plus we really don't want to see energy prices start to float up due to less exploration. Infrastructure spending on things like roads is good too, we should spend some real money here. It's not as good as the cash transfers to people who you are pretty sure are going to spend the money immediately (the poor) like what extending unemployment will do. The issue here is that construction isn't as labor intensive as it was years ago and a good deal of the labor is immigrant labor. There is a big long term economic upside to infrastructure improvement but that can take years and years to be realized so in order to keep as much money as possible spent on labor on infrastructure projects in our economy we should tax all money transfers going out of the country. I would also in a targeted fashion extend parts of the Bush tax cuts for at least another year, again tax cuts are not immediately stimulative, but it would calm people by showing that big tax increases are not on the way. We need to keep with our renewable energy plans, this is not really very short term simulative but long term it does two huge things for the economy, one, it depresses the demand for fossil fuels depressing their prices and also lowers the amount of money we ship overseas to buy those fossil fuels.
Lastly, and maybe most importantly we really have to pressure China to let their currency float and Europe to clean up their banks.
Swake,
None of that will grow the economy. That's a few little tweaks, sprinkled with a little "shut the hell up and spend your unemployment."
I actually feel worse about President Swake after reading that.
I know you're a lib, but their's got to be something besides the Pelosian "Unemployment is Stimulus" model to work from. Promising people that they can become wards of the state is not very stimulative, and "the poor" need jobs, not handouts.
Quote from: Gaspar on July 22, 2010, 04:39:37 PM
Swake,
None of that will grow the economy. That's a few little tweaks, sprinkled with a little "shut the hell up and spend your unemployment."
I actually feel worse about President Swake after reading that.
I know you're a lib, but their's got to be something besides the Pelosian "Unemployment is Stimulus" model to work from. Promising people that they can become wards of the state is not very stimulative, and "the poor" need jobs, not handouts.
You are misunderstanding, it's not about the people on unemployment, it's about getting cash into the economy quickly with a high likelihood of it being spent quickly and locally. Jobs will come from that money turning over in the economy. We don't have a lack of capital in the economy or a lack of available credit, companies now have huge stockpiles of cash and banks are reporting lackluster earnings because they don't have enough borrowers. we have a lack of spending going on, both by individuals and companies. A further tax break is not going to change that.
Unemployment benefits are stimulative, in that without them, the unemployed would have zero income. It's a good immediate stimulus, but not something that is sustainable in the long run, obviously.
Quote from: swake on July 22, 2010, 04:52:41 PM
You are misunderstanding, it's not about the people on unemployment, it's about getting cash into the economy quickly with a high likelihood of it being spent quickly and locally. Jobs will come from that money turning over in the economy. t.
Wasn't that what was tried with the first mega-stimulus? Where are the jobs?
Quote from: guido911 on July 22, 2010, 05:32:39 PM
Wasn't that what was tried with the first mega-stimulus? Where are the jobs?
Rebuilding the IDL, in state government, planning and implementing high speed rail in several states, and elsewhere.
On that one, Obama foobared up. He should have agitated for a much larger stimulus, one which would have had a more visible impact. Part of the problem with the stimulus that was passed is that half of it was tax cuts, which people promptly saved. That made the stimulus have less effect on the economy compared to its supposed size, thus leading to your question.
BTW, the stimulus wasn't "mega" in any sense of the word. It was about 5% of 2008 GDP, and as I mentioned before, between a third and a half of it was tax cuts.
Quote from: nathanm on July 22, 2010, 07:38:35 PM
BTW, the stimulus wasn't "mega" in any sense of the word. It was about 5% of 2008 GDP, and as I mentioned before, between a third and a half of it was tax cuts.
It was pushing 1 TRILLION Dollars. You can attempt to mask that significance by comparing it to an even greater number but I am not biting.
And to my point, where were the jobs?
Quote from: guido911 on July 22, 2010, 07:49:19 PM
And to my point, where were the jobs?
www.stimulus.gov - if you didn't like my previous answer.
Quote from: nathanm on July 22, 2010, 08:35:45 PM
www.stimulus.gov - if you didn't like my previous answer.
http://www.recovery.gov/Pages/home.aspx
Quote from: guido911 on July 22, 2010, 08:44:31 PM
http://www.recovery.gov/Pages/home.aspx
Yeah, yeah, sorry for the braino.
The jobs all went to China. And it will be years before they come back. Assuming we do something to start them coming back. (It is still a net loss going on now.)
First; 200 billion? What Would AIG Do if we gave that to real people instead of them? 200 billion - do you really think this economy could absorb that much capital to private business and entrepreneurs? I think a lot of it would be sitting around waiting for something to happen. Obama's stimulus made an effort on this front - there was 750 million to SBA, and even that much hasn't made it completely through the system yet.
So, point one has been put in place with a stimulus that has been disparaged by the RWRE for a year and a half.
Second. Sounds good. Can't happen, unfortunately. The rationalization/comment about debt versus recession has been repeatedly shown to be wrong, but that's ok - makes a good sound bite!
Third. Amen! Preaching to the choir!! By the way, those recommendations to reduce is in process - we are finally withdrawing from Iraq, and starting the planning to leave Afghanistan. Can't happen too soon. And we have been fighting smarter for a long time. Remember the disparagement about Bill Clinton "cutting" military spending and how he single-handedly gutted the military? Even though he followed the Pentagon recommendations to the letter! And then how that "gutted" military was able to route the Taliban a year or so later in Afghanistan. Something Russia hadn't been able to do in over 10 years! I think I would be satisfied with that kind of "gutting".
Fourth. Great idea - give the real working men and women of this country a little taste of what the rich elitists have had for a decade. Oh, wait...that DID happen. Over a year ago in that same little stimulus bill that also loaded up the SBA with more money than they can use. The biggest tax cut in the history of the world - ever.
Good ideas! Pretty much all in place thanks to the lack of Bush we have right now.
Are you sure you aren't a closet Democrat?? You sure are toeing the party line here. If you start messing with the 2nd amendment, expect a major argument!! Just saying...
Upon consideration, I wasn't "masking" anything. Spending $10 would be a whole freaking lot if the GDP of the US were $11. Spending 55 cents would not be so outrageous.
Quote from: nathanm on July 22, 2010, 04:59:48 PM
Unemployment benefits are stimulative, in that without them, the unemployed would have zero income. It's a good immediate stimulus, but not something that is sustainable in the long run, obviously.
They are a very minor economic stimulant and meaningless if you do not first stop the bleeding. You have to employ a coordinated effort to bolster the unemployed while opening economic opportunity for the private sector to create jobs.
The mistake we made was to bolster unemployment and fund temporary public sector jobs. This is a far more expensive endeavor with limited results, but it was the only option that the administration had without turning on their principals. Because the administration had taken the stance of fighting the evil banks, and the evil rich, and the evil Wall street, and the evil entrepreneurs, they essentially cut the legs off of any workable stimulus plan.
Sure, infrastructure is good, but it only causes temporary employment and an unfunded burden. The actual return it offers (and it does offer returns) takes years, and decades to realize. During that time it must be maintained. It's a very long term investment, not a stimulant.
Amazing how the facts can so solidly entrench wrong beliefs, as we have heard the last couple of weeks.
The stimulus plan HAS (and IS) been working. That's why the economy IS getting better. Just gotta be open to looking at the reality around you.
Jobs won't ever come back at a good pace until Corporate America finally wakes up to the realization that if you go oversees, there is no way the displaced here can actually buy their products. Henry Ford understood reality. I wonder why our corporate non-leaders today don't??
I would have gone to Vegas and bet $100 billion on the Saints to win the Super Bowl. At that time they had 50 to 1 odds.
Then I could have balanced the budget and have enough leftover to paint the White House a new color.
Quote from: Gaspar on July 23, 2010, 07:28:33 AM
They are a very minor economic stimulant and meaningless if you do not first stop the bleeding. You have to employ a coordinated effort to bolster the unemployed while opening economic opportunity for the private sector to create jobs.
Much of the stimulus was tax cuts. What other Chicago-school policies would you have him implement?