US 'Economic Stimulus' Budget Review

[Crazed Rabbit]

The most comprehensive list (http://article.nationalreview.com/?q=YjcyODIyZGM2MGU1ZDdkNDgxZDc3OTNjYjM4ZDY1ODI=)of what the stimulus will be stimulating that I've seen:

50 De-Stimulating Facts
Chapter and verse on a bad bill.

By Stephen Spruiell & Kevin Williamson

Senate Democrats acknowledged Wednesday that they do not have the votes to pass the stimulus bill in its current form. This is unexpected good news. The House passed the stimulus package with zero Republican votes (and even a few Democratic defections), but few expected Senate Republicans (of whom there are only 41) to present a unified front. A few moderate Democrats have reportedly joined them.

The idea that the government can spend the economy out of a recession is highly questionable, and even with Senate moderates pushing for changes, the current package is unlikely to see much improvement. Nevertheless, this presents an opportunity to remove some of the most egregious spending, to shrink some programs, and to add guidelines where the initial bill called for a blank check. Here are 50 of the most outrageous items in the stimulus package:


VARIOUS LEFT-WINGERY
The easiest targets in the stimulus bill are the ones that were clearly thrown in as a sop to one liberal cause or another, even though the proposed spending would have little to no stimulative effect. The National Endowment for the Arts, for example, is in line for $50 million, increasing its total budget by a third. The unemployed can fill their days attending abstract-film festivals and sitar concerts.

Then there are the usual welfare-expansion programs that sound nice but repeatedly fail cost-benefit analyses. The bill provides $380 million to set up a rainy-day fund for a nutrition program that serves low-income women and children, and $300 million for grants to combat violence against women. Laudable goals, perhaps, but where’s the economic stimulus? And the bill would double the amount spent on federal child-care subsidies. Brian Riedl, a budget expert with the Heritage Foundation, quips, “Maybe it’s to help future Obama cabinet secretaries, so that they don’t have to pay taxes on their nannies.”

Perhaps spending $6 billion on university building projects will put some unemployed construction workers to work, but how does a $15 billion expansion of the Pell Grant program meet the standard of “temporary, timely, and targeted”? Another provision would allocate an extra $1.2 billion to a “youth” summer-jobs program—and increase the age-eligibility limit from 21 to 24. Federal job-training programs—despite a long track record of failure—come in for $4 billion total in additional funding through the stimulus.

Of course, it wouldn’t be a liberal wish list if it didn’t include something for ACORN, and sure enough, there is $5.2 billion for community-development block grants and “neighborhood stabilization activities,” which ACORN is eligible to apply for. Finally, the bill allocates $650 million for activities related to the switch from analog to digital TV, including $90 million to educate “vulnerable populations” that they need to go out and get their converter boxes or lose their TV signals. Obviously, this is stimulative stuff: Any economist will tell you that you can’t get higher productivity and economic growth without access to reruns of Family Feud.

Summary:
$50 million for the National Endowment for the Arts
$380 million in the Senate bill for the Women, Infants and Children program
$300 million for grants to combat violence against women
$2 billion for federal child-care block grants
$6 billion for university building projects
$15 billion for boosting Pell Grant college scholarships
$4 billion for job-training programs, including $1.2 billion for “youths” up to the age of 24
$1 billion for community-development block grants
$4.2 billion for “neighborhood stabilization activities”
$650 million for digital-TV coupons; $90 million to educate “vulnerable populations”



POORLY DESIGNED TAX RELIEF
The stimulus package’s tax provisions are poorly designed and should be replaced with something closer to what the Republican Study Committee in the House has proposed. Obama would extend some of the business tax credits included in the stimulus bill Congress passed about a year ago, and this is good as far as it goes. The RSC plan, however, also calls for a cut in the corporate-tax rate that could be expected to boost wages, lower prices, and increase profits, stimulating economic activity across the board.

The RSC plan also calls for a 5 percent across-the-board income-tax cut, which would increase productivity by providing additional incentives to save, work, and invest. An across-the-board payroll-tax cut might make even more sense, especially for low- to middle-income workers who don’t make enough to pay income taxes. Obama’s “Making Work Pay” tax credit is aimed at helping these workers, but it uses a rebate check instead of a rate cut. Rebate checks are not effective stimulus, as we discovered last spring: They might boost consumption, a little, but that’s all they do.

Finally, the RSC proposal provides direct tax relief to strapped families by expanding the child tax credit, reducing taxes on parents’ investment in the next generation of taxpayers. Obama’s expansion of the child tax credit is not nearly as ambitious. Overall, his plan adds up to a lot of forgone revenue without much stimulus to show for it. Senators should push for the tax relief to be better designed.

Summary:
$15 billion for business-loss carry-backs
$145 billion for “Making Work Pay” tax credits
$83 billion for the earned income credit


STIMULUS FOR THE GOVERNMENT
Even as their budgets were growing robustly during the Bush administration, many federal agencies couldn’t find the money to keep up with repairs—at least that’s the conclusion one is forced to draw from looking at the stimulus bill. Apparently the entire capital is a shambles. Congress has already removed $200 million to fix up the National Mall after word of that provision leaked out and attracted scorn. But one fixture of the mall—the Smithsonian—dodged the ax: It’s slated to receive $150 million for renovations.

The stimulus package is packed with approximately $7 billion worth of federal building projects, including $34 million to fix up the Commerce Department, $500 million for improvements to National Institutes of Health facilities, and $44 million for repairs at the Department of Agriculture. The Agriculture Department would also get $350 million for new computers—the better to calculate all the new farm subsidies in the bill (see “Pure pork” below).

One theme in this bill is superfluous spending items coated with green sugar to make them more palatable. Both NASA and NOAA come in for appropriations that properly belong in the regular budget, but this spending apparently qualifies for the stimulus bill because part of the money from each allocation is reserved for climate-change research. For instance, the bill grants NASA $450 million, but it states that the agency must spend at least $200 million on “climate-research missions,” which raises the question: Is there global warming in space?

The bottom line is that there is a way to fund government agencies, and that is the federal budget, not an “emergency” stimulus package. As Riedl puts it, “Amount allocated to the Census Bureau? $1 billion. Jobs created? None.”

Summary:
$150 million for the Smithsonian
$34 million to renovate the Department of Commerce headquarters
$500 million for improvement projects for National Institutes of Health facilities
$44 million for repairs to Department of Agriculture headquarters
$350 million for Agriculture Department computers
$88 million to help move the Public Health Service into a new building
$448 million for constructing a new Homeland Security Department headquarters
$600 million to convert the federal auto fleet to hybrids
$450 million for NASA (carve-out for “climate-research missions”)
$600 million for NOAA (carve-out for “climate modeling”)
$1 billion for the Census Bureau


INCOME TRANSFERS
A big chunk of the stimulus package is designed not to create wealth but to spread it around. It contains $89 billion in Medicaid extensions and $36 billion in expanded unemployment benefits—and this is in addition to the state-budget bailout (see “Rewarding state irresponsibility” below).

The Medicaid extension is structured as a temporary increase in the federal match, but make no mistake: Like many spending increases in the stimulus package, this one has a good chance of becoming permanent. As for extending unemployment benefits through the downturn, it might be a good idea for other reasons, but it wouldn’t stimulate economic growth: It would provide an incentive for job-seekers to delay reentry into the workforce.

Summary:
$89 billion for Medicaid
$30 billion for COBRA insurance extension
$36 billion for expanded unemployment benefits
$20 billion for food stamps


PURE PORK
The problem with trying to spend $1 trillion quickly is that you end up wasting a lot of it. Take, for instance, the proposed $4.5 billion addition to the U.S. Army Corps of Engineers budget. Not only does this effectively double the Corps’ budget overnight, but it adds to the Corps’ $3.2 billion unobligated balance—money that has been appropriated, but that the Corps has not yet figured out how to spend. Keep in mind, this is an agency that is often criticized for wasting taxpayers’ money. “They cannot spend that money wisely,” says Steve Ellis of Taxpayers for Common Sense. “I don’t even think they can spend that much money unwisely.”

Speaking of spending money unwisely, the stimulus bill adds another $850 million for Amtrak, the railroad that can’t turn a profit. There’s also $1.7 billion for “critical deferred maintenance needs” in the National Park System, and $55 million for the preservation of historic landmarks. Also, the U.S. Coast Guard needs $87 million for a polar icebreaking ship—maybe global warming isn’t working fast enough.

It should come as no surprise that rural communities—those parts of the nation that were hardest hit by rampant real-estate speculation and the collapse of the investment-banking industry—are in dire need of an additional $7.6 billion for “advancement programs.” Congress passed a $300 billion farm bill last year, but apparently that wasn’t enough. This bill provides additional subsidies for farmers, including $150 million for producers of livestock, honeybees, and farm-raised fish.

Summary:
$4.5 billion for U.S. Army Corps of Engineers
$850 million for Amtrak
$87 million for a polar icebreaking ship
$1.7 billion for the National Park System
$55 million for Historic Preservation Fund
$7.6 billion for “rural community advancement programs”
$150 million for agricultural-commodity purchases
$150 million for “producers of livestock, honeybees, and farm-raised fish”


RENEWABLE WASTE
Open up the section of the stimulus devoted to renewable energy and what you find is anti-stimulus: billions of dollars allocated to money-losing technologies that have not proven cost-efficient despite decades of government support. “Green energy” is not a new idea, Riedl points out. The government has poured billions into loan-guarantees and subsidies and has even mandated the use of ethanol in gasoline, to no avail. “It is the triumph of hope over experience,” he says, “to think that the next $20 billion will magically transform the economy.”

Many of the renewable-energy projects in the stimulus bill are duplicative. It sets aside $3.5 billion for energy efficiency and conservation block grants, and $3.4 billion for the State Energy Program. What’s the difference? Well, energy efficiency and conservation block grants “assist eligible entities in implementing energy efficiency and conservation strategies,” while the State Energy Program “provides funding to states to design and carry out their own energy efficiency and renewable energy programs.”

While some programs would spend lavishly on technologies that are proven failures, others would spend too little to make a difference. The stimulus would spend $4.5 billion to modernize the nation’s electricity grid. But as Robert Samuelson has pointed out, “An industry study in 2004—surely outdated—put the price tag of modernizing the grid at $165 billion.” Most important, the stimulus bill is not the place to make these changes. There is a regular authorization process for energy spending; Obama is just trying to take a shortcut around it.

Summary:
$2 billion for renewable-energy research ($400 million for global-warming research)
$2 billion for a “clean coal” power plant in Illinois
$6.2 billion for the Weatherization Assistance Program
$3.5 billion for energy-efficiency and conservation block grants
$3.4 billion for the State Energy Program
$200 million for state and local electric-transport projects
$300 million for energy-efficient-appliance rebate programs
$400 million for hybrid cars for state and local governments
$1 billion for the manufacturing of advanced batteries
$1.5 billion for green-technology loan guarantees
$8 billion for innovative-technology loan-guarantee program
$2.4 billion for carbon-capture demonstration projects
$4.5 billion for electricity grid


REWARDING STATE IRRESPONSIBILITY
One of the ugliest aspects of the stimulus package is a bailout for spendthrift state legislatures. Remember the old fable about the ant and the grasshopper? In Aesop’s version, the happy-go-lucky grasshopper realizes the error of his ways when winter comes and he goes hungry while the industrious ant lives on his stores. In Obama’s version, the federal government levies a tax on the ant and redistributes his wealth to the party-hearty grasshopper, who just happens to belong to a government-employees’ union. This happens through something called the “State Fiscal Stabilization Fund,” by which taxpayers in the states that have exercised financial discipline are raided to subsidize Democratic-leaning Electoral College powerhouses—e.g., California—that have spent their way into big trouble.

The state-bailout fund has a built-in provision to channel the money to the Democrats’ most reliable group of campaign donors: the teachers’ unions. The current bill requires that a fixed percentage of the bailout money go toward ensuring that school budgets are not reduced below 2006 levels. Given that the fastest-growing segment of public-school expense is administrators’ salaries—not teachers’ pay, not direct spending on classroom learning—this is a requirement that has almost nothing to do with ensuring high-quality education and everything to do with ensuring that the school bureaucracy continues to be a cash cow for Democrats.

Setting aside this obvious sop to Democratic constituencies, the State Fiscal Stabilization Fund is problematic in that it creates a moral hazard by punishing the thrifty to subsidize the extravagant. California, which has suffered the fiscal one-two punch of a liberal, populist Republican governor and a spendthrift Democratic legislature, is in the worst shape, but even this fiduciary felon would have only to scale back spending to Gray Davis–era levels to eliminate its looming deficit. (The Davis years are not remembered as being especially austere.) Pennsylvania is looking to offload much of its bloated corrections-system budget onto Uncle Sam in order to shunt funds to Gov. Ed Rendell’s allies at the county-government level, who will use that largesse to put off making hard budgetary calls and necessary reforms. Alaska is looking for a billion bucks, including $630 million for transportation projects—not a great sign for the state that brought us the “Bridge to Nowhere” fiasco.

Other features leap out: Of the $4 billion set aside for the Community Oriented Policing Services—COPS—program, half is allocated for communities of fewer than 150,000 people. That’s $2 billion to fight nonexistent crime waves in places like Frog Suck, Wyo., and Hoople, N.D.

The great French economist Frédéric Bastiat called politics “the great fiction through which everybody endeavors to live at the expense of everybody else.” But who pays for the state bailout? Savers will pay to bail out spenders, and future generations will pay to bail out the undisciplined present.

In sum, this is an $80 billion boondoggle that is going to reward the irresponsible and help state governments evade a needed reordering of their financial priorities. And the money has to come from somewhere: At best, we’re just shifting money around from jurisdiction to jurisdiction, robbing a relatively prudent Cheyenne to pay an incontinent Albany. If we want more ants and fewer grasshoppers, let the prodigal governors get a little hungry.

Summary:
$79 billion for State Fiscal Stabilization Fund

What a colossal waste.

CR

[Strike For The South]

You boys like Mex-ee-co??!!??

[Husar]

VARIOUS LEFT-WINGERY

He may have a point and all, I mean I'm against supporting companies with taxpayer money as well, but the above quote makes it all look rather stupid anyway, I mean, can't some guys write an analysis without "giving it to the other side" again?
Can't be bothered to read it now at 3am but if you're against the package, I support you anyway. ~;)
Don't really remember who here was actually for that package, weren't most against or undecided?

Or maybe that was the bailout, but I'm sure they're more or less the same anyway.

[HoreTore]

Pork goes in sausages. Not politics.

Someone should finance a cooking-class for the US congress...

[Lemur]

It's from the National Review, a partisan organ that pretty much exists to aid the Republican Party. They're good at what they do, but hopelessly slanted. We aren't going to have an intelligent or enlightening discussion based purely on their spin.

[Marshal Murat]

15 billion for boosting Pell Grant college scholarships

Hellz yea!

[woad&fangs]

Just as long as they pass the bill soon:whip: I need that Pell Grant money.:sweatdrop:

[seireikhaan]

:soapbox:


Thuy're takin' our tax dollerz!

[HoreTore]

:soapbox:


Thuy're takin' our tax dollerz!

Actually, no.

They're taking your children's tax dollars ~;)

[Alexander the Pretty Good]

It's from the National Review, a partisan organ that pretty much exists to aid the Republican Party. They're good at what they do, but hopelessly slanted. We aren't going to have an intelligent or enlightening discussion based purely on their spin.
It's not that hard to see through the partisanship. Look at the allocations and decide whether it's as evil as they say it is. Unless you're asserting that they're making it up out of whole cloth.

I'd say most of the things on the list probably won't directly stimulate the economy. They deserve a fair vote in a non-emergency piece of legislation.

But whatever. NJ's (hopefully) getting some money for the "stupid states that can't control spending" section. So screw you guys. :2thumbsup:

[Crazed Rabbit]

It's from the National Review, a partisan organ that pretty much exists to aid the Republican Party. They're good at what they do, but hopelessly slanted. We aren't going to have an intelligent or enlightening discussion based purely on their spin.

Oh come on. Not even a try to debate? Now even the National Review is worthless? The article has a list of various programs and causes the money is going to, something I've not seen elsewhere.

But instead of even daring to respond when the lead is a fiscally conservative viewpoint, you just launch some ad hominems and abandon the thread.

Un-*******-believable.

Thanks to the people who, astonishingly, were able to deal with an article not written by someone with identical politics.


Actually, no.

They're taking your children's tax dollars

Well put. Not many people are going to go out and spend when they know this is a one time rebate and we'll be taxed more in the future.

CR

[seireikhaan]

Un-*******-believable.

Thanks to the people who, astonishingly, were able to deal with an article not written by someone with identical politics.
Sorry, CR. However, you're not going to convince me with an article that uses the phrase "various left-wingery". I'm not saying the stimulus is even remotely perfect. Not by a long shot. But don't even dare pretend that was some kind of neutral analysis.

[Lemur]

Now even the National Review is worthless?
Feel free to show me where I said that they were "worthless."


The article has a list of various programs and causes the money is going to, something I've not seen elsewhere.
Unfortunately, the source is purely partisan, so I would honestly need a corroborating source before I would accept their accounting. These are the same people who proudly (http://article.nationalreview.com?q=NjRmYzhhZjZlZDYzNmQzZDEyYmE5ZDAyYTJiYjY0MzE=) cited a Congressional Budget Office report that turned out not to exist (http://www.washingtonmonthly.com/archives/individual/2009_01/016586.php). That was a week ago. To quote St. Reagan, "Trust but verify."

As I said, they're very good at what they do, but what they do has nothing no bearing on trying to get at the truth of any subject. They exist to aid a particular side in politics. There's nothing wrong with that, but it's naive to treat them like a normal news source.


But instead of even daring to respond when the lead is a fiscally conservative viewpoint, you just launch some ad hominems and abandon the thread.
"Fiscally conservative"? Say wha? If NR were fiscally conservative, would they not have been so under the Bush Administration as well? And yet I remember them being rather muted about the trillion dollar yearly deficit developed under The Decider. That suggests that they are fiscal conservatives only when Democrats are in power. As I said, they are not about reaching any sort of truth, but rather about helping their side to win.

Ad hominem would mean that I'm attacking a person instead of an idea. How is it ad hominem to point out, accurately, that National Review is a purely partisan organ? Please explain.

As for the actual topic, the stimulus/pork bill, I find it a very hard subject to approach with a useful perspective. Obama is betting that Keynesian theories (http://en.wikipedia.org/wiki/Keynesian_economics) will put the brakes on the downward spiral, but in truth those theories have never been tested. So we're looking at a trillion-dollar gamble on an unproved economic theory. Also, the Congressional Dems have larded up the bill, which only serves to confuse the issue, and was strategically idiotic of them.

On the other hand, I don't hear any reasonable counter-proposal coming from any cohesive group. Republicans saying "tax cuts!" strike me as borderline ridiculous; perhaps if some economist could make a proper argument for their "tax cuts will solve anything" position, I'd understand it better.

Here's an interesting take from Bruce Bartlett (http://www.forbes.com/2009/01/22/stimulus-keynes-taxes-oped-cx_bb_0123bartlett.html):


The problem is that fiscal stimulus needs to be injected right now to counter the liquidity trap. If that were the case, I think we might well get a very high multiplier effect this year. But if much of the stimulus doesn't come online until next year, when we are likely to be past the worst of the slowdown, then crowding out will greatly diminish the effectiveness of the stimulus, just as the critics argue...

Thus the argument really boils down to a question of timing. In the short run, the case for stimulus is overwhelming. But in the longer run, we can't enrich ourselves by borrowing and printing money. That just causes inflation.

The trick is to front-load the stimulus as much as possible while putting in place policies that will tighten both fiscal and monetary policy next year.

How we actually accomplish that is way beyond my fiscal/economic understanding. But it certainly sounds reasonable.

As for this "we're robbing our children" outrage: I understand it, and I'm sympathetic to it, but where the **** were you people for the last eight years as a Republican president loaded us up with a yearly trillion-dollar deficit? Is it just me, or are you being freakishly selective?

[LittleGrizzly]

Obama is betting that Keynesian theories (http://en.wikipedia.org/wiki/Keynesian_economics) will put the brakes on the downward spiral, but in truth those theories have never been tested.

from wiki article

But to many the true success of Keynesian policy can be seen at the onset of World War II (http://en.wikipedia.org/wiki/World_War_II), which provided a kick to the world economy, removed uncertainty, and forced the rebuilding of destroyed capital. Keynesian ideas became almost official in social-democratic (http://en.wikipedia.org/wiki/Social_democracy) Europe after the war and in the U.S. in the 1960s.

Keynesian economics have basically been used in the west since 1945, sure you can argue about the effectiveness of keynesian economics but his theories have been widely applied and thus tested... your argument may hold more water if you concentrate on the fact they haven't been tested on this scale..

Since ww2 very few countries have actually followed a free market route such as that advocated by smith, the IMF has put various countries into a smith style economic system, but if you look at the vast majority of countries (or developed ones at least, less sure about 2nd and 3rd world ones) they practice keynesian economics...

[Lemur]

your argument may hold more water if you concentrate on the fact they haven't been tested on this scale..
Fair enough; point taken.

[HoreTore]

As for this "we're robbing our children" outrage: I understand it, and I'm sympathetic to it, but where the **** were you people for the last eight years as a Republican president loaded us up with a yearly trillion-dollar deficit? Is it just me, or are you being freakishly selective?

Hey hey hey!

I was right here in Norwayland laughing my behind off, thankyouverymuch! The reason I'm laughing now isn't because you're spending money, I think that's a good thingy. I'm laughing because nobody wants to pay for all that spending...

Cut the pork, raise the tax, I say!

[Ironside]

Going through that budget review of your then CR, some starting notes though. I will mention some stuff that at least sounds fair, that I agree in this context are pork. You really need to fix that porking system generally, for both parties. I do also not know much about the reputation of some organisations due to lack of info and will thus mainly focus on the things posted.




The idea that the government can spend the economy out of a recession is highly questionable, and even with Senate moderates pushing for changes, the current package is unlikely to see much improvement.

To paraphrase: "I wouldn't support a Keynesian theory in any case", which isn't exatly the best start to reviewing a Keynesian stimulance package, but fair enough I guess, as it haven't really been properly tested (but are very popular world wide atm)


Here are 50 of the most outrageous items in the stimulus package:

So what was left out? There's a few houndred milliards (billions for you Americans) missing.


VARIOUS LEFT-WINGERY

Thanks to Some stuff here vill be named VARIOUS RIGHT-WINGERY (VRW for short)


The easiest targets in the stimulus bill are the ones that were clearly thrown in as a sop to one liberal cause or another, even though the proposed spending would have little to no stimulative effect. The National Endowment for the Arts, for example, is in line for $50 million, increasing its total budget by a third. The unemployed can fill their days attending abstract-film festivals and sitar concerts.

Pork, true. But the VRW here is notable. Take the music industry for example, not many bands outside the mainstream can support themself on thier music. But I guess that counts as sitar concerts...


Then there are the usual welfare-expansion programs that sound nice but repeatedly fail cost-benefit analyses. The bill provides $380 million to set up a rainy-day fund for a nutrition program that serves low-income women and children, and $300 million for grants to combat violence against women. Laudable goals, perhaps, but where’s the economic stimulus? And the bill would double the amount spent on federal child-care subsidies. Brian Riedl, a budget expert with the Heritage Foundation, quips, “Maybe it’s to help future Obama cabinet secretaries, so that they don’t have to pay taxes on their nannies.”

2 first goes as pork (well rather long term investments to reduce crime). The third one? Child care subsides, as in kindergarten and simular? As in a place to keep your child while the parents are working? Countered by a useless VRW.


Perhaps spending $6 billion on university building projects will put some unemployed construction workers to work, but how does a $15 billion expansion of the Pell Grant program meet the standard of “temporary, timely, and targeted”? Another provision would allocate an extra $1.2 billion to a “youth” summer-jobs program—and increase the age-eligibility limit from 21 to 24. Federal job-training programs—despite a long track record of failure—come in for $4 billion total in additional funding through the stimulus.

Focus on education keeps people inside schools (thus not taking jobs that doesn't exist atm) and gives them something that can be useful when the job market thaws. It's not really aimed at created jobs true but reducing an excess of workers when it's a job shortage is very simular.


Of course, it wouldn’t be a liberal wish list if it didn’t include something for ACORN, and sure enough, there is $5.2 billion for community-development block grants and “neighborhood stabilization activities,” which ACORN is eligible to apply for.

I take it they don't like ACORN. True it's long term investment (they are focusing on fixing "ghettoes" if I understand ACORN correctly), thus counts as pork here.


Finally, the bill allocates $650 million for activities related to the switch from analog to digital TV, including $90 million to educate “vulnerable populations” that they need to go out and get their converter boxes or lose their TV signals. Obviously, this is stimulative stuff: Any economist will tell you that you can’t get higher productivity and economic growth without access to reruns of Family Feud.

Real pork. Should be funded by the TV companies that basically force the switch.



POORLY DESIGNED TAX RELIEF
The stimulus package’s tax provisions are poorly designed and should be replaced with something closer to what the Republican Study Committee in the House has proposed. Obama would extend some of the business tax credits included in the stimulus bill Congress passed about a year ago, and this is good as far as it goes. The RSC plan, however, also calls for a cut in the corporate-tax rate that could be expected to boost wages, lower prices, and increase profits, stimulating economic activity across the board.

NOT BIG ENOUGH TAX CUT!!!!!! No puns, but obvious VRW


The RSC plan also calls for a 5 percent across-the-board income-tax cut, which would increase productivity by providing additional incentives to save, work, and invest. An across-the-board payroll-tax cut might make even more sense, especially for low- to middle-income workers who don’t make enough to pay income taxes. Obama’s “Making Work Pay” tax credit is aimed at helping these workers, but it uses a rebate check instead of a rate cut. Rebate checks are not effective stimulus, as we discovered last spring: They might boost consumption, a little, but that’s all they do.

Let me give you a secret. The falling economy is because of too litte consumption caused by bank failures, house market bubble and the stockmarket crash. This is supposed to increase the consumption, thus make those consumerism wheels run again.


Finally, the RSC proposal provides direct tax relief to strapped families by expanding the child tax credit, reducing taxes on parents’ investment in the next generation of taxpayers. Obama’s expansion of the child tax credit is not nearly as ambitious. Overall, his plan adds up to a lot of forgone revenue without much stimulus to show for it. Senators should push for the tax relief to be better designed.

NOT BIG ENOUGH TAX CUT!!!!!! No puns, but obvious VRW. Gets even better, as it's a long term investment = counts as pork here => Republicans saying NOT ENOUGH PORK!!!!


[
B]STIMULUS FOR THE GOVERNMENT[/B]
Even as their budgets were growing robustly during the Bush administration, many federal agencies couldn’t find the money to keep up with repairs—at least that’s the conclusion one is forced to draw from looking at the stimulus bill. Apparently the entire capital is a shambles. Congress has already removed $200 million to fix up the National Mall after word of that provision leaked out and attracted scorn. But one fixture of the mall—the Smithsonian—dodged the ax: It’s slated to receive $150 million for renovations.

The stimulus package is packed with approximately $7 billion worth of federal building projects, including $34 million to fix up the Commerce Department, $500 million for improvements to National Institutes of Health facilities, and $44 million for repairs at the Department of Agriculture. The Agriculture Department would also get $350 million for new computers—the better to calculate all the new farm subsidies in the bill (see “Pure pork” below).

Hard to say if this is needed or not, but as employing construction workers counts as stimulus it's fine. I can do that too

Counts as pork though.


One theme in this bill is superfluous spending items coated with green sugar to make them more palatable. Both NASA and NOAA come in for appropriations that properly belong in the regular budget, but this spending apparently qualifies for the stimulus bill because part of the money from each allocation is reserved for climate-change research. For instance, the bill grants NASA $450 million, but it states that the agency must spend at least $200 million on “climate-research missions,” which raises the question: Is there global warming in space?

Counts as pork. But that big thingy that gives us heat lies in space (I keep it to that, there's more though), which raises the question: Can the article writers come up with puns that doesn't fall apart immidiatly?


The bottom line is that there is a way to fund government agencies, and that is the federal budget, not an “emergency” stimulus package. As Riedl puts it, “Amount allocated to the Census Bureau? $1 billion. Jobs created? None.”

OMG, I can agree on something here. Still the catchy VRW falls apart if Cencus Bureu employs anybody for the money.


INCOME TRANSFERS
A big chunk of the stimulus package is designed not to create wealth but to spread it around. It contains $89 billion in Medicaid extensions and $36 billion in expanded unemployment benefits—and this is in addition to the state-budget bailout (see “Rewarding state irresponsibility” below).

The Medicaid extension is structured as a temporary increase in the federal match, but make no mistake: Like many spending increases in the stimulus package, this one has a good chance of becoming permanent. As for extending unemployment benefits through the downturn, it might be a good idea for other reasons, but it wouldn’t stimulate economic growth: It would provide an incentive for job-seekers to delay reentry into the workforce.


True, not part of the intent of the bill, thus pork. Mainly based on a igeological differance. And the thesis that everything temporal is always ending up permanent. Not without point, but for the authors sake I hope they haven't been pushing for temporary tax cuts.


PURE PORK

Will shorten it here. Some of is true pork and nothing belongs here.


RENEWABLE WASTE

Most of it will probably end up under the category pork (and some of it true pork), but almost every market shift will cost money during a transition period.



REWARDING STATE IRRESPONSIBILITY

Can't analyse enough here but a lot of it does seem like pork.


Short ending, does it make you think? Yep. Should you use it as your single source? Hell no. Atleast it doesn't even pretend to be unbiased.

[Lemur]

Apparently we already overpaid the banks to the tune of $80 billio (http://washingtonindependent.com/29257/the-80-billion-mistake)n under Paulson and Bush. I seriously doubt we'll be able to get that money back. And they're still not making loans.

[drone]

Apparently we already overpaid the banks to the tune of $80 billio (http://washingtonindependent.com/29257/the-80-billion-mistake)n under Paulson and Bush. I seriously doubt we'll be able to get that money back. And they're still not making loans.

You can't spell "Pilfer the Treasury" without T, A, R, and P.

[Don Corleone]

It's from the National Review, a partisan organ that pretty much exists to aid the Republican Party. They're good at what they do, but hopelessly slanted. We aren't going to have an intelligent or enlightening discussion based purely on their spin.

If those are the new rules around here, then kindly refrain from sharing stories from the Atlantic, Mother Jones, the Economist or other similar news contemplative magainzes from the other side.

I mean really, Lemur. :phonecall: " Hello, Pot? This is Kettle. I just called to say 'You're Black!'" You post 'news' items from firedoglake.com, and you have the nerve to call National Review 'hoplessly slanted' and say that any discussion of their news items won't be intelligent.... Oh brother, where for art thou? :drama2:

[Don Corleone]

Apparently we already overpaid the banks to the tune of $80 billio (http://washingtonindependent.com/29257/the-80-billion-mistake)n under Paulson and Bush. I seriously doubt we'll be able to get that money back. And they're still not making loans.

Isn't the reason the banks haven't been lending the TARP money because they were so underwater on their loans, even with the cash infusion, they're not meeting their reserve requirements?

[Xiahou]

Isn't the reason the banks haven't been lending the TARP money because they were so underwater on their loans, even with the cash infusion, they're not meeting their reserve requirements?I'm also of the opinion that many of us just plain don't want loans. We're being told the economy is in a tailspin- why would anyone in their right mind be expanding their business, buying a house or doing anything that would put them in more debt? Most of us are trying to hold onto what we have and preparing for the worst.

Ironically, doing that only serves to make the economy perform even worse. :juggle2:

[Lemur]

[K]indly refrain from sharing stories from [...] the Economist or other similar news contemplative magainzes from the other side.
The Economist is from the "other side"? For real? Then what on earth is your side?

I don't understand why people are getting so worked up about a plain statement of fact. All I said was that we (a) shouldn't base our discussion purely on that source, and (b) that I would need corroborating evidence before I took what they had to say as true.

If I opened up a thread with nothing more than a long screed from Daily Kos, I expect you'd ask for backup as well.

Check out any of the factual bits of what I've posted. It's all legitimate, and if it isn't I'll happily retract. Here's another source on the non-existent CBO report (http://coloradoindependent.com/20384/coffman-cites-nonexistent-cbo-study-as-reason-to-vote-against-stimulus) that NRO went on about.

The truth of the matter is that the bailout and the stimulus are huge, complex things, and I'd like to hear actual experts talk about it, and try to get to some sort of picture of what's appropriate and what isn't; what's potentially effective versus ineffective. Bloviation about "Left-Wingery," kinda lowers the level of discourse right off the bat.

Instead of eating your daily breakfast of outrage over my calling NRO exactly what it is, why not clue us in to what you think about the recession (depression?) and the various plans offered to bridge it.

-edit-

Oh, and Don, my links were to (in order): National Review, Washington Monthly, Wikipedia, Forbes, and now The Colorado Independent. If one of those sites is hosted by Firedoglake.com, I'm not aware of it.

[drone]

Isn't the reason the banks haven't been lending the TARP money because they were so underwater on their loans, even with the cash infusion, they're not meeting their reserve requirements?

That, and the fact that nobody put any restrictions on how the money had to be used, so they used it to buy up other banks and give out bonuses. With rock-bottom approval ratings and a long history of squandering any money allocated to the executive branch, Bush somehow was still able to browbeat a supposedly hostile Congress into giving up $350 billion with no oversight. I'm starting to think Bush was a political genius. :inquisitive:

Or Congress is filled with idiots.

[HoreTore]

I'm also of the opinion that many of us just plain don't want loans. We're being told the economy is in a tailspin- why would anyone in their right mind be expanding their business, buying a house or doing anything that would put them in more debt? Most of us are trying to hold onto what we have and preparing for the worst.

Uhm.... Most businesses operate on loans. Without being able to get new loans(to keep the old ones in check), they're suddenly unable to pay wages, order new materials, etc etc. In order words, they would face a full stop.

[Don Corleone]

The Economist is from the "other side"? For real? Then what on earth is your side?

I don't understand why people are getting so worked up about a plain statement of fact. All I said was that we (a) shouldn't base our discussion purely on that source, and (b) that I would need corroborating evidence before I took what they had to say as true.

If I opened up a thread with nothing more than a long screed from Daily Kos, I expect you'd ask for backup as well.

Check out any of the factual bits of what I've posted. It's all legitimate, and if it isn't I'll happily retract. Here's another source on the non-existent CBO report (http://coloradoindependent.com/20384/coffman-cites-nonexistent-cbo-study-as-reason-to-vote-against-stimulus) that NRO went on about.

The truth of the matter is that the bailout and the stimulus are huge, complex things, and I'd like to hear actual experts talk about it, and try to get to some sort of picture of what's appropriate and what isn't; what's potentially effective versus ineffective. Bloviation about "Left-Wingery," kinda lowers the level of discourse right off the bat.

Instead of eating your daily breakfast of outrage over my calling NRO exactly what it is, why not clue us in to what you think about the recession (depression?) and the various plans offered to bridge it. And while you're at it, why don't you see if you can pull in some sources that aren't complete and utter crackpots.

-edit-

Oh, and Don, my links were to (in order): National Review, Washington Monthly, Wikipedia, Forbes, and now The Colorado Independent. If one of those sites is hosted by Firedoglake.com, I'm not aware of it.

Now I may be wrong, but wasn't the impetus for your John Yoo=TortureBoy thread the firedoglake.com blog entry that you actually posted at the bottom of it?

And I'm not saying I don't enjoy the Atlantic or the Economist. I do, they're very well reasoned, well thought out positions that they're advocating. But they do come from one side of the playing field.

If you want my honest opinions on the recession, the need for stimulus and my consideration of the merit of the items proposed so far, I'll be happy to offer those. My intent was to say that if you're going to brand something like National Review as a partisan rag full of hacks, then expect it to come full circle. As for National Review flubbing the CBO report citation, which was wrong, where is your outrage when the NYTimes has another Jason Blair episode? Nope, then it's 'honest mistake', and for the record, Jason Blair really did invent his stories, and I still think that his editors went to press knowing it. But when it's National Review cites a report that hasn't been released yet, you start with the dispersions.

It's that old double standard thing, amigo. It really gets under my skin.

[HoreTore]

And I'm not saying I don't enjoy the Atlantic or the Economist. I do, they're very well reasoned, well thought out positions that they're advocating. But they do come from one side of the playing field.

Yes, The Economist is a hardcore capitalist newspaper. I honestly didn't know you'd turned socialist on us, Don Corleone...

But you're more than welcome among our ranks!

[Lemur]

Now I may be wrong, but wasn't the impetus for your John Yoo=TortureBoy thread the firedoglake.com blog entry that you actually posted at the bottom of it?
My sources for the OP in that thread were, in order: Wikipedia, informationclearinghouse.info, The Wall Street Journal and Firedoglake.com. The latter wasn't even quoted, I just offered the link as bonus reading.


If you want my honest opinions on the recession, the need for stimulus and my consideration of the merit of the items proposed so far, I'll be happy to offer those.
Yes, please.


My intent was to say that if you're going to brand something like National Review as a partisan rag full of hacks [...]
Where did I talk about "hacks"? I said "they are very good at what they do." Twice. There are some very talented, bright people at National Review. And they work for a dedicated partisan organ. Why is that so hard to hear? Why is it even in dispute?

And once again, if The Economist is from the "other side," what side is that, exactly?

[LittleGrizzly]

And I'm not saying I don't enjoy the Atlantic or the Economist. I do, they're very well reasoned, well thought out positions that they're advocating. But they do come from one side of the playing field.

Ill admit i don't know these so ill just ask, would they use phrases like various left wingery and other things you would more expect from someone like rush, the impression i got from Lemur was that NRO was more bias and partisan than these others you mentioned, if you really go into deatil theres little that has no partisan or bias so i can only assume he meant the level of bias and partisanery rather than its exsistence at all...

[Don Corleone]

Now, as for the matter of the stimulus itself... I think all sides are being disingenous. Non-partisan economic think tanks seem to agree the most rapid results will come from direct government spending, but the most enduring efforts would be tax cuts. In other words, it would appear that both sides might be onto something.

I see a lot of demogoguery going on from all sides. I see a lot of Lefty policies being inserted into the stimulus under the auspices of a stimulus bill. Not that some of them, like child healthcare, aren't good ideas, but if you want the bill approved quickly, keep the number of items in it down. There's also the provision that any institution that allows prayer or worship services on its grounds will be excluded.

I see a pathetic lack of address of the fundamental core issue in all of this: homeowners ability to live with the mortgages they currently have. How banks are allowed to collect 50Billion in TARP payments and still refuse to restructure mortages, which probably hurts themselves as much as the mortagees, is beyond me. The plan Lindsey Graham is floating about funding $30 billion to the FDIC to restructure mortages seems brilliantly simple. And yet, because Lindsey Graham made the mistake of propsing it himself, instead of giving it to a Democratic colleague, it's being shelved.

The core issue driving deflation is consumer confidence and disposable income. Nothing I've seen in the stimulus package from any side even begins to address that.

And oh, by the way, I'm really opposed to making Jillian and Allison, and their kids, pay for the :daisy: of our generation and our parents.

[Don Corleone]

Okay, do you want me to focus on the stimulus package and TARP reform, or do you really want to continue the NR debate, even though you keep telling me to drop it (though you're the one that brought it up). I suspect you're pissed that I didn't let you do a drive-by on it, and that's why you keep trying to get the last word, then say "now, back to the topic". If we're going to stay on topic, then let's stay on topic.

You said the NRO editors are good at what they do in a tongue-in-cheek sense. You had just gotten done saying they're an advocacy machine for the Republican party, and then you say "and they're very good at it".

They would describe themselves as thoughtful essayists that consider current events from a particular perspective. They don't make any bones about that, but the key point is thoughtful essayists on current events, not Republican shills.

Now, if it makes you feel better to dismiss everyone out of hand that doesn't subscribe to your world-view, there's nothing I can do to stop you. But I'm not going to let it walk by unquestioned.

And as for the Economist, they advocate free-trade and globalization (things I agree with), but they also take some pretty strong stance on the need for central banks, controling currencies and interfering in functioning markets (things I don't) . In other words, they take an editorial stance. Does that somehow dismiss their viewpoint as invalid? Should I say something like "they're an advocacy rag for the world bank, and they're very good at what they do"?

[Lemur]

[D]o you really want to continue the NR debate, even though you keep telling me to drop it (though you're the one that brought it up).
I'm sorry, when did I tell you to drop it?


And as for the Economist, they advocate free-trade and globalization (things I agree with), but they also take some pretty strong stance on the need for central banks, controling currencies and interfering in functioning markets (things I don't) . In other words, they take an editorial stance.
Most publications take some sort of editorial stance. As another poster pointed out, it's a question of degree. Do you see any functional difference between The Economist and National Review? (I'm assuming you're read enough of both to offer an informed opinion.)

I thought your point about "homeowners' ability to live with the mortgages they currently have" was very astute. I have wondered about that myself; why do you read and hear about banks (a) jacking up interest to unpayable levels, (b) refusing to negotiate with the homeowner, and then (c) foreclosing? It makes no economic sense on any level. Obviously, people who bought more property than they could handle will have to lose their homes, and that sucks, but what about people who get the (a) (b) (c) treatment? Would a mere $30 billion in the FDIC have stopped that bleeding, as Graham proposed?

-edit-


You said the NRO editors are good at what they do in a tongue-in-cheek sense. You had just gotten done saying they're an advocacy machine for the Republican party, and then you say "and they're very good at it".
Forgot to address this. Why do you declare that I'm being tongue-in-cheek or sarcastic? I think they are very good at what they do. And they make no bones about being a partisan organ. A memorable quote (http://corner.nationalreview.com/post/?q=NmQzZTE0ZjRkZTI3OTVmOTkyMjg0YmEzZDczZDlkYzA=) from the election season past: "Obama's the enemy — a far-left Democrat. We should be attacking him at every weak point. That's politics. A pro-Obama emailer whines to me that the Pastor Wright business is 'a Swift Boating of Obama.' Well, duh!"

Here's a not-terribly balanced post from today (http://corner.nationalreview.com/post/?q=OTUxMDJhNWEyZTEzY2I5YzczY2UwMjFhMDYxYTY0YTE=): "The economy began to collapse when the Democrats captured the House and Senate and we then knew that the lower tax rates on individuals, capital gains, and dividends would end after 2010. We are in the early stages of the Reid/Obama/Pelosi recession and nothing they are even talking about doing will help."

Do these strike you as the sorts of things you would read in Newsweek, The Economist or any mainstream news magazine?

[Crazed Rabbit]

Feel free to show me where I said that they were "worthless."

You didn't say exactly that, but you did say:

We aren't going to have an intelligent or enlightening discussion based purely on their spin.

Now what does that mean when I'm posting in a forum where the point is debating?


Unfortunately, the source is purely partisan, so I would honestly need a corroborating source before I would accept their accounting. These are the same people who proudly (http://article.nationalreview.com?q=NjRmYzhhZjZlZDYzNmQzZDEyYmE5ZDAyYTJiYjY0MzE=) cited a Congressional Budget Office report that turned out not to exist (http://www.washingtonmonthly.com/archives/individual/2009_01/016586.php). That was a week ago. To quote St. Reagan, "Trust but verify."

As I said, they're very good at what they do, but what they do has nothing no bearing on trying to get at the truth of any subject. They exist to aid a particular side in politics. There's nothing wrong with that, but it's naive to treat them like a normal news source.

A normal news source? Like what, exactly? The NYT? CNN? MSNBC?



Ad hominem would mean that I'm attacking a person instead of an idea. How is it ad hominem to point out, accurately, that National Review is a purely partisan organ? Please explain.

You're attacking the source, not the article.


As for the actual topic, the stimulus/pork bill, I find it a very hard subject to approach with a useful perspective. Obama is betting that Keynesian theories (http://en.wikipedia.org/wiki/Keynesian_economics) will put the brakes on the downward spiral, but in truth those theories have never been tested. So we're looking at a trillion-dollar gamble on an unproved economic theory. Also, the Congressional Dems have larded up the bill, which only serves to confuse the issue, and was strategically idiotic of them.

The basis of Keynes' theory is that prices of goods and labor don't adjust fast enough in changing conditions; they don't reach equilibrium, and that the government can fix that through spending. There's not much proof for that, especially since Keynes wrote his theory in 1936, when the gov't of the US was actively trying to not let wages and prices of goods adjust, and interfering in the market so that they did not adjust. So Keyne's argument for government intervention almost becomes an example of why the government shouldn't interfere.


On the other hand, I don't hear any reasonable counter-proposal coming from any cohesive group. Republicans saying "tax cuts!" strike me as borderline ridiculous; perhaps if some economist could make a proper argument for their "tax cuts will solve anything" position, I'd understand it better.

These one time rebates aren't going to help much; likely less than 50% will be spent, the rest saved or used to pay off bills. And heaven forbid we cut taxes on the rich.


Here's an interesting take from Bruce Bartlett (http://www.forbes.com/2009/01/22/stimulus-keynes-taxes-oped-cx_bb_0123bartlett.html):


The problem is that fiscal stimulus needs to be injected right now to counter the liquidity trap. If that were the case, I think we might well get a very high multiplier effect this year. But if much of the stimulus doesn't come online until next year, when we are likely to be past the worst of the slowdown, then crowding out will greatly diminish the effectiveness of the stimulus, just as the critics argue...

Thus the argument really boils down to a question of timing. In the short run, the case for stimulus is overwhelming. But in the longer run, we can't enrich ourselves by borrowing and printing money. That just causes inflation.

The trick is to front-load the stimulus as much as possible while putting in place policies that will tighten both fiscal and monetary policy next year.

How we actually accomplish that is way beyond my fiscal/economic understanding. But it certainly sounds reasonable.


I don't buy the need for huge loads of spending as 'overwhelming' and neither do a lot of economists (http://www.cato.org/fiscalreality).


Notwithstanding reports that all economists are now Keynesians and that we all support a big increase in the burden of government, we the undersigned do not believe that more government spending is a way to improve economic performance. More government spending by Hoover and Roosevelt did not pull the United States economy out of the Great Depression in the 1930s. More government spending did not solve Japan’s “lost decade” in the 1990s. As such, it is a triumph of hope over experience to believe that more government spending will help the U.S. today. To improve the economy, policymakers should focus on reforms that remove impediments to work, saving, investment and production. Lower tax rates and a reduction in the burden of government are the best ways of using fiscal policy to boost growth

Specifically, in the realm of taxes, we need to cut the corporate tax (higher than most of 'socialist' Europe), the capital gains tax, and broadly cut down the huge amount of regulation that makes it much more difficult for small businesses.


As for this "we're robbing our children" outrage: I understand it, and I'm sympathetic to it, but where the **** were you people for the last eight years as a Republican president loaded us up with a yearly trillion-dollar deficit? Is it just me, or are you being freakishly selective?

I've been against Bush's big government spending for a long time, at least from the medicare increase.

CR

[Don Corleone]

Okay, Lemur, there comes a point where friendship and decorum dictate that an issue be dropped. I'd say we've passed that point. I plead no lo contesto on the charge of National Review being the print version of Limbaugh's radio show, as I already know you've got your fingers in your ears to any rebuttals.


I thought your point about "homeowners' ability to live with the mortgages they currently have" was very astute. I have wondered about that myself; why do you read and hear about banks (a) jacking up interest to unpayable levels, (b) refusing to negotiate with the homeowner, and then (c) foreclosing? It makes no economic sense on any level. Obviously, people who bought more property than they could handle will have to lose their homes, and that sucks, but what about people who get the (a) (b) (c) treatment? Would a mere $30 billion in the FDIC have stopped that bleeding, as Graham proposed?


Well, this is what happens when you incentivize troubled assets, no? When you make defaulted mortages worth their full value, what reason does the bank have to see to it that the mortage doesn't go into default? So many things about TARP were so poorly thought out (or were shrewdly thought out, but not with the stated goal in mind), and this would be prinicipal among them.

It's not that banks aren't working with homeowners to come to agreeable terms. The healthy ones are actually leading on this. Many reigional and local banks are pro-actively contacting homeowners whose 5-25, 7-23 ARMS are about to convert and working with them to set up terms they can actually meet.

It's the larger banks, the ones that are beating a path to Treasury's front doors, that are putting the thumbscrews to the homeowners. Why shouldn't they? Either the homeowner pays, with everything they've got, and the bank makes unprecedented profits on what is a relatively secure loan, or the homeowner is forced to default, and the Treasury reimburses the bank for the failed loan, and the bank winds up with the collateral, aka the house, to boot. Heads the bank wins, tails, guess what, they win again..

[Crazed Rabbit]

The Congressional Budget Office says Obama's stimulus plan will lead to a lower GDP (http://www.washingtontimes.com/news/2009/feb/04/cbo-obama-stimulus-harmful-over-long-haul/) in the long run.

CR

[Lemur]

Specifically, in the realm of taxes, we need to cut the corporate tax (higher than most of 'socialist' Europe), the capital gains tax, and broadly cut down the huge amount of regulation that makes it much more difficult for small businesses.
Hmm, so in your view, tax cuts really can solve the majority of our current economic problems. Why didn't we see something along these lines proposed while George W. Bush was still in office? Surely an agenda of deep deregulation would have stood a better chance under a Republican President ...


Either the homeowner pays, with everything they've got, and the bank makes unprecedented profits on what is a relatively secure loan, or the homeowner is forced to default, and the Treasury reimburses the bank for the failed loan, and the bank winds up with the collateral, aka the house, to boot. Heads the bank wins, tails, guess what, they win again..
That just makes my head hurt. Ow. Ow.

I'll be quite blunt: I don't have enough of an economics background to know what to root for here. It's clear to me that we are in deep doo-doo. It also stands to reason that if we wait around long enough and do nothing, it will probably fix itself. But nobody knows how long that will take, and nobody really wants a decade of recession. I am leery of the Dems and their porkish tendencies, but then again, over the last eight years I've gotten used to everybody and his dog loading up every bill with pork. The only difference now is that the people doing it have a (D) on their names, and the folks with an (R) have experienced a prison conversion and re-discovered Adam Smith.

I've heard quite a few people drawing comparisons with the Great Depression, often claiming that FDR lengthened the depression, and that only the Nazi menace truly ended the hurting. Does anyone here thing the Great Depression is a useful yardstick? Any lessons we should take from it?

-edit-


The Congressional Budget Office says Obama's stimulus plan will lead to a lower GDP (http://www.washingtontimes.com/news/2009/feb/04/cbo-obama-stimulus-harmful-over-long-haul/) in the long run.
An interesting bit from that:


CBO said there is no crowding out in the short term, so the plan would succeed in boosting growth in 2009 and 2010.

The agency projected the Senate bill would produce between 1.4 percent and 4.1 percent higher growth in 2009 than if there was no action. For 2010, the plan would boost growth by 1.2 percent to 3.6 percent.

CBO did project the bill would create jobs, though by 2011 the effects would be minuscule.

So in the short-term the stimulus would work?

[drone]

An interesting bit from that:


CBO said there is no crowding out in the short term, so the plan would succeed in boosting growth in 2009 and 2010.

The agency projected the Senate bill would produce between 1.4 percent and 4.1 percent higher growth in 2009 than if there was no action. For 2010, the plan would boost growth by 1.2 percent to 3.6 percent.

CBO did project the bill would create jobs, though by 2011 the effects would be minuscule.

So in the short-term the stimulus would work?

The point of boosting growth in 2009/2010 at the cost of long term decline: Nov 2, 2010. Or am I just being cynical?

[Lemur]

Well, not to be too starry-eyed, but I thought the point was to get us out of the liquidity trap (http://en.wikipedia.org/wiki/Liquidity_trap).

[Don Corleone]

I personally think the comparisons to the Great Depression are inappropriate. We may find ourselves in our own 'not-so-small' Depression, but the root causes, and therefore the appropriate solutions, only marginally mirror each other.

Some important differences:

-In 1932, agriculture represented a substantially larger portion of our GDP, and we experienced several back-to-back crop failures on cash crops.

-Global currency was experiencing an artificial downward push, because Germany was being forced to make reparations payments and was inflating their money supply.

-We were actually still on the gold standard, so our currencies were technically more closely tied with other currencies that were also on the gold standard.

-With as irresponsible as we currently are, our margin rates are nowhere near what they were in the late 20's. We talk about 5% being riverboat gambling... Joe Kennedy made his bones on Wallstreet by selling 1% margin plays.

-The level of home ownership wasn't what it currently is.

Not to say we don't have our own new issues these days:

-Even the most astute minds on Wall Street are having trouble understanding some of the more advanced mortgage backed securities and credit default swaps. Any layman you meet who tells you they understand it is full of :daisy:. Paulson himself admitted he couldn't get his mind around the problem, nor could Greenspan. When you hear them say "We don't know how to value the losses", they're not saying "we don't know how much the value has shrunk". They're being literal. They have no earthly idea how to value some of these tools.

-Municipalities are in a precarious position hitherto unthinkable. Arizona, California and about 8 other states are about to default on outstanding bond payments. Just 1 year ago, it was unthinkable that a state bond wouldn't even rate at investment grade. That is going to to torpedo the bond market and artificially hold interest rates up, no matter what the Treasury and the Fed try to do to remedy the situation.

-The average American consumer has a net negative worth. Now, we can argue whether that's because of concentration of wealth by greedy fatcats or foolish consumers, but the net result is the same. The consumer demand market is historically inelastic right now.


In short, we can't keep saying "This is what we did in 1932, and it worked", or for that matter "It didn't work in 1932, so we shouldn't do it know". The two events are similar mainly in their magnitude and reach, not in nature.

Personally, the midst of a deep-reaching recssion is the wrong time to switch economic course. Until now, our economy has increasingly been driven by consumer spending, right or wrong. Making the decision to abandon that plan and rely on government spending to prop up our GDP is going to introduce its own host of problems. I would argue we should focus on bandaging the system we currently have (prop up consumer spending) and when things calm down, evaluate whether we want to rebalance the GDP percentages.

That means addressing the home mortgage crisis from the homeowner side. Neither the Democrats nor the Republicans want to do that. Democrats want to take advantage of the situation to grow government spending as a portion of GDP. They have romantic visions of a new generation of Roosevelt devotees to quasi-socialism (all those comparisons in the news aren't by accident).

But by the same token, now is not the time for trickle-down economics either. No matter how much the Republicans want it to be otherwise, corporate America is not going to generate economic activity with any money they get. Your average CEO is running scared :daisy:. Any money he can get, he's going to sock away, improve his balance sheet and turn to his investor analysts and point out that he's beating the competition in his sector. That's an incredibly short-sighted view, but that's what they're paid to do. If you're the CEO of Caterpillar, you're not supposed to care about the macro-economy, you're supposed to care about large equipment sales and your own finances.

No, I think the only right answer is to remove both filters to the consumer, government and corporate and find ways to inject capital directly into consumer spending, as its the only way to stimulate economic activity again. However, it has to be large scale. As CR rightly points out, rebates or small cuts aren't going to cut it. You have to convince the average consumer that 1) they're not going to be homeless if they consume and 2) the income truly is disposable, they don't need to sock it away. Otherwise, the consumer is no better than the aforementioned corporate executive.... you'll just wind up with a much larger number of much smaller money pools.

[Don Corleone]

If you want to avoid the Liquidity Trap, all you have to do is declare a moratorium on all Capital Gains taxes.

[Lemur]

Thanks for the analysis, Don. Very helpful.

I still feel as though a crazy amount of political posturing is going on, much of it in bad faith. Take Senator McCain, who campaigned promising that he would bring broadband to rural areas (http://www.azcongresswatch.com/?p=579). It was part of his stump speech.

Well, now that he's Senator McCain and not a Presidential Candidate McCain, rural broadband is the definition of wasteful spending (http://www.fastcompany.com/blog/chris-dannen/techwatch/which-senators-are-fighting-broadband-funding).


Sen. John McCain (R-AZ) is employing his classically reductive reasoning to undercut broadband spending. “The American people are figuring it out. This is not a stimulus bill, it is a spending bill," he said Thursday. Of course, the terms "stimulus" and "spending" are essentially synonymous, but the semantic distinction he's making is two-fold: between government and consumer spending, and between short-term and long-term spending. Republicans want short-term capital infused into the economy by way of consumer spending.

Anyway ...

[Don Corleone]

I couldnt' agree more. The whole goal of the stimulus is to stop hemoraghing of jobs, and deflation, in the economy, right? Well, we all know the industries that are losing jobs right now: construction, manufacturing, financial services and technology. Two industries that have actually held up pretty well? Health care and education.

So where is 66% of the stimulus money going? You guessed it... health care and education. So yeah, we're going to solve the economic problems by giving money to... those that don't currently need it.

You could argue financial services is covered under TARP, but construction, manufacturing and technology companies and workers? So sorry, you're not in the Democratic playbook.

[LittleGrizzly]

To be honest with the great depression, its hard to know what overall effect FDR had, but in comparison to Britian and other allied countrys America recovered much sooner whereas Allied countrys didn't begin to recover until rearmament for ww2 began..

[Major Robert Dump]

The great depression wasnt lengthened by the all the spending, it was lengthened by price fixing.

I could honestly give 2 craps about pet projects in the stimulus bill because everyone does it, and now its the democrats turn. Until they change the manner in which earmarks are added (undemocratic imo) and the manner in which this country uses deficit spending and the federal reserve this garbage is just going to repeat itself. People like Tom Coburn in congress are an extinct dinosaur, a minority, and while we need more like him it won't happen.

Boohoo, theres pork.

[Lemur]

The great depression wasnt lengthened by the all the spending, it was lengthened by price fixing.
How certain is that as a conclusion? Just curious. Oh, and apparently , if you go by the numbers, FDR's stimulus did a pretty good job at the time (http://www.ourfuture.org/blog-entry/2009020603/fdr-failed-myth) ...


https://img.photobucket.com/albums/v489/Lemurmania/Depression-GDP-output-1.gif https://img.photobucket.com/albums/v489/Lemurmania/Depression-GDP-output-2.gif

[Alexander the Pretty Good]

The great depression wasnt lengthened by the all the spending, it was lengthened by price fixing.

I could honestly give 2 craps about pet projects in the stimulus bill because everyone does it, and now its the democrats turn. Until they change the manner in which earmarks are added (undemocratic imo) and the manner in which this country uses deficit spending and the federal reserve this garbage is just going to repeat itself. People like Tom Coburn in congress are an extinct dinosaur, a minority, and while we need more like him it won't happen.

Boohoo, theres pork.
And people wonder why I want to dodge taxes...

[Crazed Rabbit]

How certain is that as a conclusion? Just curious. Oh, and apparently , if you go by the numbers, FDR's stimulus did a pretty good job at the time (http://www.ourfuture.org/blog-entry/2009020603/fdr-failed-myth) ...


Really? You malign National Review and then pull this out?

That FDR lengthened the depression through really stupid actions is a matter of historical economical fact (http://newsroom.ucla.edu/portal/ucla/FDR-s-Policies-Prolonged-Depression-5409.aspx). So MRD's conclusion is very certain.


So in the short-term the stimulus would work?

For those people planning on dying in less than ten years.

CR

[LittleGrizzly]

That FDR lengthened the depression through really stupid actions is a matter of historical economical fact (http://newsroom.ucla.edu/portal/ucla/FDR-s-Policies-Prolonged-Depression-5409.aspx).

http://en.wikipedia.org/wiki/New_Deal#Prolonged.2Fworsened_the_Depression

Prolonged/worsened the Depression
A number of economists believe the New Deal delayed economic recovery.[52] (http://en.wikipedia.org/wiki/New_Deal#cite_note-51) A 1995 survey of economic historians asked whether "Taken as a whole, government policies of the New Deal served to lengthen and deepen the Great Depression." Of those in economics departments 27% agreed, 22% agreed 'with provisos' (what provisos the survey does not state) and 51% disagreed. Of those in history departments, only 27% agreed and 73% disagreed.

A matter of historical fact for the economists you cited perhaps but its not everyone else's historical 'fact'. There is no wde ranging agreement on the matter and according to these figurers a higher percentage don't think FDR's policys served to lengthen and deepen the great depression. With the figures in even higher disagreement for historians probably because they look at the comparison with other allied countries who were determined to stick with smith's policys and had to wait for rearmement for WW2 before they're recovery began whereas US started recovering sooner...

[Lemur]

A matter of historical fact for the economists you cited perhaps but its not everyone else's historical 'fact'.
But ... but two UCLA economists wrote a paper saying otherwise! Do you understand? Not one, but two!

[Devastatin Dave]

Here's a very telling statement from John "Did you know I served in Vietnam" Kerry said about the importance of passing this legislation...
http://www.weeklystandard.com/weblogs/TWSFP/2009/02/john_kerry_you_know_whats_the.asp

Our country is dead...

[Devastatin Dave]

For those people planning on dying in less than ten years.

CR

Sounds like the majority of our sneators and congressmen!!! Its like these global warming alarmists, there making so much money right now knowing by the time their predictions might come true, they'll be worm meat. Al Gore is the greatest personal capitalist and snake oil salesman the world has ever known...

[Seamus Fermanagh]

A comment on the "Source War" in this thread:

There is nothing wrong with using the National Review as a source. The whole point in citing sources is to make your reader aware of where you got your information so that they may evaluate the data or opinion profferred in light of the editorial stance/journalistic standards of the source noted.

Because a source takes a partisan stance, it cannot be logically assumed that all information presented therein is incorrect. YES, if a notably conservative source is being cited, opinions and inferences presented should be evaluated as coming from that perspective. That does not automatically mean that everything presented is :daisy:


Jefferson owned slaves. Does this invalidate everything he said about human freedom?

Henry Ford bought into the Great Jewish Conspiracy theory. Does this mean that all his innovations in manufacturing are therefore suspect?

Mohandas Ghandi advocated a combat role for Indians in South Africa during the 1906 war. Does this render anything he said regarding non-violence as the correct means for political change invalid?


In other words, a little perspective please....

[Lemur]

Fair enough. Thanks for the balanced perspective, Seamus.

A recent Nobel laureate in economics (http://www.nytimes.com/2009/02/06/opinion/06krugman.html?em) weighs in ...


A not-so-funny thing happened on the way to economic recovery. Over the last two weeks, what should have been a deadly serious debate about how to save an economy in desperate straits turned, instead, into hackneyed political theater, with Republicans spouting all the old clichés about wasteful government spending and the wonders of tax cuts.

It’s as if the dismal economic failure of the last eight years never happened — yet Democrats have, incredibly, been on the defensive. Even if a major stimulus bill does pass the Senate, there’s a real risk that important parts of the original plan, especially aid to state and local governments, will have been emasculated. [...]

As the great American economist Irving Fisher pointed out almost 80 years ago, deflation, once started, tends to feed on itself. As dollar incomes fall in the face of a depressed economy, the burden of debt becomes harder to bear, while the expectation of further price declines discourages investment spending. These effects of deflation depress the economy further, which leads to more deflation, and so on.

And deflationary traps can go on for a long time. Japan experienced a “lost decade” of deflation and stagnation in the 1990s — and the only thing that let Japan escape from its trap was a global boom that boosted the nation’s exports. Who will rescue America from a similar trap now that the whole world is slumping at the same time?

[Seamus Fermanagh]

As to the stimulus package.

The Senate will strip it down a bit from 1.3T down to about the 1.0T level. It will then pass. The conference bill will drag it back up to 1.1T or so.

This conference bill will pass the Senate with 2-5 GOP votes, it will pass the House party line. Obama will declare victory. Pelosi will declare victory. McCain will declare it was necessary. Baehner [sic?] will declare it's a boondoggle. We'll all go on doing pretty much what we've already done.

Is it more of an omnibus paying for loads of Democratic party favored changes rather than jobs stimulus -- yes. What did you expect? The won the election and they have the power. That's how the game is played.

[Crazed Rabbit]

A matter of historical fact for the economists you cited perhaps but its not everyone else's historical 'fact'. There is no wde ranging agreement on the matter and according to these figurers a higher percentage don't think FDR's policys served to lengthen and deepen the great depression. With the figures in even higher disagreement for historians probably because they look at the comparison with other allied countries who were determined to stick with smith's policys and had to wait for rearmement for WW2 before they're recovery began whereas US started recovering sooner...

That survey was almost a decade before the paper came out, and since then there's been more research done on the topic. It is pretty much fact.

Bernanke, chairman of the federal reserve, believes it (The Fed) played a key role in causing the depression (He actually apologized for it).

There are many others, like Milton Friedman, who hold the same views:

"Admirers of FDR credit his New Deal with restoring the American economy after the disastrous contraction of 1929—33. Truth to tell–as Powell demonstrates without a shadow of a doubt–the New Deal hampered recovery from the contraction, prolonged and added to unemployment, and set the stage for ever more intrusive and costly government."
–Milton Friedman, Nobel Laureate, Hoover Institution


As the great American economist Irving Fisher

Oh, that partisan Kruggy. There's a really funny quote from Fishing from 1929 (80 years ago!) - anyone care to guess what he says?


But ... but two UCLA economists wrote a paper saying otherwise! Do you understand? Not one, but two!

Oh my, what a rebuke! Truly, I wish I had a partisan website where the author could regurgitate leftist talking points and put up two graphs that ever so neatly go along with what he says! Truly, I am undone for relying on such fools as published economists and not a partisan blogger!

CR

[LittleGrizzly]

There are many others, like Milton Friedman, who hold the same views:

Milton Friedman is a huge adovocate of smith's theory's, he was keynes rival back in the day, not that he's not a great economist (he is, from what i have read) but he is someone who is going to disagree, i actually read a little bit of his view's and he was of the opinion that the reason for the depression in the first place was hoover not actually following smith's free market ideals...

That survey was almost a decade before the paper came out, and since then there's been more research done on the topic. It is pretty much fact.

The facts of the matter are America recovered quicker than other allied countries which where following smith's ideal of the free market, these countries continued in a slump until they began rearming. Im sure there are parts of FDR's new deal which did actually cause harm, but it is arguable that the new deal actually lengthend the depression or shortened it, various brilliant economists such as Friedman and Keynes have argued differing views and i would say it is difficult to pick one or the other as 'fact'

[LittleGrizzly]

If you want some economists who disagree...

http://mediamatters.org/items/200901080005

extracts from article...

He later asserted that "President Roosevelt waged what could only be called a jihad against private enterprise." However, Hume's assertion that "the New Deal failed" has been flatly rejected by some prominent economists, including Nobel Laureate Paul Krugman, who has said that Roosevelt did not go far enough to end the crisis and that his attempts to balance the budget hindered recovery.

In a November 10, 2008, New York Times column (http://mediamatters.org/rd?to=http%3A%2F%2Fwww.nytimes.com%2F2008%2F11%2F10%2Fopinion%2F10krugman.html%3F_r%3D2%26hp), Krugman wrote that Roosevelt's policies included "long-run achievements" that "remain the bedrock of our nation's economic stability" and that Roosevelt's short-term successes were constrained because "his economic policies were too cautious."
Krugman further wrote:

Now, there's a whole intellectual industry, mainly operating out of right-wing think tanks, devoted to propagating the idea that F.D.R. actually made the Depression worse. So it's important to know that most of what you hear along those lines is based on deliberate misrepresentation of the facts. The New Deal brought real relief to most Americans.

During a roundtable discussion on ABC's This Week on November 16, responding (http://mediamatters.org/rd?to=http%3A%2F%2Fwww.youtube.com%2Fwatch%3Fv%3D3yAyQV8gOjo) to Washington Post columnist George Will's assertion that "the first New Deal didn't work," Krugman stated, in part: "Roosevelt got the economy moving somewhat. By 1937, things were a lot better than they were in 1933." He continued, "Then he was persuaded to balance the budget, or try to, and he raised taxes and cut spending and the economy went back down again. And it took an enormous public works program known as World War II to bring the economy out of the Depression."

It is a commonly accepted fact that wars, get economys going, it is only sensible to assume you can have an even greater effect if instead of using it all to wage a war you use all the spending on improving infrastructure and the economy in general...

Similarly, in a January 6 column (http://mediamatters.org/rd?to=http%3A%2F%2Fwww.alternet.org%2Fstory%2F117537%2Frepublicans_fight_obama%2527s_stimulus_plans% 252C_fearing_its_success_will_mean_years_of_political_oblivion%2F), Dean Baker, co-director of the Center for Economic and Policy Research, wrote: "In reality, any careful reading showed that the New Deal policies substantially ameliorated the effects of the Great Depression for tens of millions of people. The major economic failing of the New Deal was that President Roosevelt was not prepared to push the policies as far as necessary to fully lift the economy out of the Great Depression." Baker continued:

Roosevelt was too worried about the whining of the anti-stimulus crowd that he confronted. He remained concerned about balancing the budget when the proper goal of fiscal policy should have been large deficits to stimulate the economy. Roosevelt's policies substantially reduced the unemployment rate from the 25 percent peak when he first took office, but they did not get the unemployment rate back into single digits.

Further, in a November 17 post (http://mediamatters.org/rd?to=http%3A%2F%2Fdelong.typepad.com%2Fsdj%2F2008%2F11%2Flessons-from-th.html) on his personal blog, University of California-Berkeley economics professor Brad DeLong wrote, "Private investment recovered in a very healthy fashion as Roosevelt's New Deal policies took effect. The interruption of the Roosevelt Recovery in 1937-1938 is, I think, wel [sic] understood: Roosevelt's decision to adopt more 'orthodox' economic policies and try to move the budget toward balance and the Federal Reserve's decision to contract the money supply by raising bank reserve requirements provide ample explanation of that downturn."

Even the federal reserve chair, someone appointed by George Bush

Progressive economists are not alone in crediting Roosevelt's policies for easing the economic crisis. As Newsweek senior editor Daniel Gross noted on his blog (http://mediamatters.org/rd?to=http%3A%2F%2Fwww.danielgross.net%2Farchives%2F2006%2F12%2F31-week%2Findex.html%23a001266) on January 4, 2007, Federal Reserve Chair Ben Bernanke -- appointed by President George W. Bush -- wrote in his Essays on the Great Depression (http://mediamatters.org/rd?to=http%3A%2F%2Fbooks.google.com%2Fbooks%3Fid%3Dc2OSWhLjzJkC%26printsec%3Dfrontcover%26dq%3Dessay s%2Bon%2Bthe%2Bgreat%2Bdepression%23PPA41%2CM1), "Only with the New Deal's rehabilitation of the financial system in 1933-35 did the economy begin its slow emergence from the Great Depression."

This is with just a quick look, stating such things as facts is simply right wing propaganda, there is argument among economists over the issue, only those with a view to push would tell you otherwise...

[Don Corleone]

I think what everyone is failing to recognize is that when you look at Keynsian economic theory (and it's latest prophet, Paul Krguman) or the Austrian school (ala Milton Friedman), you have two inherently different definitions of success.

Folks on the Austrian side look at wealth generation. Folks on the Keynsian side look at standard of living. Neither are wrong, but when you argue back and forth over who's correct, you have to understand it's an apples & oranges argument.

One thing I don't think Paul Krugman is being completely forthwright on is that the methods of GDP stimulus advocated by Keynes were never intended to be long term strategic policies: by Keynes or by FDR for that matter. Even FDR's crown jewel, social security, was meant to be a stop gap measure until pensions and personal savings could accrue to a point where people could look to their own needs.

You don't win an argument on which is better: Capitalism or Socialism, because they argue different points. I'd even go so far as to say the two are not necessarily mutually exclusive. But sound-byte economics, as practiced by politicians, the media, and yes, here in our beloved Backroom, benefit nobody.

One thing I find amazing as I go reading up on 1930's era economics... even a so-called dyed in the wool demand-sider like FDR, a blind adherent who zealously followed Keynes' most radical theories, understood that defecits by the Federal government trash the credit market in the long run in ways that make them inherently dangerous.

Is there anybody, in either party, who would actually commit to National Debt reduction? Is there any hope that your average American can move beyond the current levels of ignorance to understand the toll defecits and national debts take on your long term prosperity, and demand an end? Or at the end of the day, have we decided to just say ":daisy: the kids, I'm going to get mine..."

Do larger European governments like France, Germany and UK keep large debts on the books?

[LittleGrizzly]

I would like to point out that im not arguing one that one is better than the others... they both have thier own benefits... and i would personally say that each has its benefits and using a cycle of both, saving a little in the good times and investing in the bad is the best way imo...

One thing I find amazing as I go reading up on 1930's era economics... even a so-called dyed in the wool demand-sider like FDR, a blind adherent who zealously followed Keynes' most radical theories, understood that defecits by the Federal government trash the credit market in the long run in ways that make them inherently dangerous.

FDR actually wanted a conservative budget, it is why he slashed spending and increased prices quite quickly (in one of the quotes in my post above)

Do larger European governments like France, Germany and UK keep large debts on the books?

I know the UK has a fairly sizeable one... i now its smaller but im not sure how it compares to the size of our economy in contrast to yours..

I agree to many are far too selfish these days, we should save a little and get rid of previous debts in the good times, and then invest the savings and build up small debts in the bad times...

[Husar]

Well, on that one TV show(not that much of a show, more like a science and everything around it kind of program) they said at the moment every eigth tax Euro in Germany goes to paying the interest of our national debt. I think that sounds like a huge debt, in fact it's over a trillion euros IIRC, they also showed that there.
the government had this plan to somehow be debt-free by 2012 or so but it looks like the recession etc. delayed that until about 294768, including all future delays of course.

[Lemur]

Excellent points, Don. I thought we were on our way toward debt reduction when Newt and Bill did their suicidal tango, but it was nothing more than a fleeting moment of fiscal sanity.

A blogger makes salient points today:


a) no one knows quite what will work for sure;

b) Obama was elected in part to tackle this crisis and the election was obviously not a vote to continue the approach favored by the GOP;

c) Obama will be held responsible for the effects of the package, as he should be;

d) in the context of the current collapse in demand, the distinction between a "stimulus" package and a "spending" bill seems increasingly esoteric;

e) Obama did a great deal to try and bring Republicans on board and to allow for a to-and-fro; the GOP, for good or ill, had no interest in cooperating with the in-coming president. They too should be held accountable for this. If the bill fails to make a dent on the collapse of demand, and if it does end up hurting the US through even more debt, then the GOP will be able to make that point in the next election. But if it works, their opposition should be recalled.

f) none of this makes sense if looked at entirely alone. The looming financial reform package must be seen as part of the rescue. If Obama can find a center for serious long-term entitlement reform, then the long-term consequences of more debt in the stimulus bill will be drastically mitigated. Again, true fiscal conservatives will focus on entitlement reform as the balance to this bill — not stupid posturing over trivial issues like pork.

[Xiahou]

The Senate will strip it down a bit from 1.3T down to about the 1.0T level. It will then pass. The conference bill will drag it back up to 1.1T or so.Have a little faith will ya? They'll lard it up better than that in conference. :beam:

[Don Corleone]

Excellent points, Don. I thought we were on our way toward debt reduction when Newt and Bill did their suicidal tango, but it was nothing more than a fleeting moment of fiscal sanity.

A blogger makes salient points today:


a) no one knows quite what will work for sure;

b) Obama was elected in part to tackle this crisis and the election was obviously not a vote to continue the approach favored by the GOP;

c) Obama will be held responsible for the effects of the package, as he should be;

d) in the context of the current collapse in demand, the distinction between a "stimulus" package and a "spending" bill seems increasingly esoteric;

e) Obama did a great deal to try and bring Republicans on board and to allow for a to-and-fro; the GOP, for good or ill, had no interest in cooperating with the in-coming president. They too should be held accountable for this. If the bill fails to make a dent on the collapse of demand, and if it does end up hurting the US through even more debt, then the GOP will be able to make that point in the next election. But if it works, their opposition should be recalled.

f) none of this makes sense if looked at entirely alone. The looming financial reform package must be seen as part of the rescue. If Obama can find a center for serious long-term entitlement reform, then the long-term consequences of more debt in the stimulus bill will be drastically mitigated. Again, true fiscal conservatives will focus on entitlement reform as the balance to this bill — not stupid posturing over trivial issues like pork.

Corleone rule #3 is that authority and responsiblity must remain perfectly correlated. Therefore, I am inclined to agree with point C. Point A goes without saying. Point B is debatable, I would argue that the average voter voted "Not Bush", but I'll willing to allow the point.

But Point D is a dangerous oversimplification. It is an omnibus spending bill as Seamus pointed out, and it's the right of the Democratic majority to make it. But if Obama decided to give $500 billion to the DNC, arguing, money in the economy is money in the economy, and arguing where it's going is esoteric, would you still agree with point D (and yes, that's a gross hyperbole, in the interest of making my point and avoiding my normal verbosity, and getting back to my DSP homework.)

I totally and utterly disagree with the tar and feather job you and your blogger buddy are doing in pont E. Yes, Obama has reached out to Republicans. But they did offer ideas for the stimulus, TO HIM. They had the door slammed in their face by House Democratic leadership, and only received modestly more respect in the Senate process, due to the filibuster threat. Yes, Obama attempted to involve Republicans in the process, but Frank and Pelosi went out of their way to shove it up the Republican's :daisy: that they had no say, and they could vote or not vote, but they had no ability to change the bill.

Honestly Lemur, representing point E as solid is not your best work.

I'm cautious about point F, as it is the first mention I have seen of any hint of long term entitlement reform. When did that come up? The closest thing I've heard, and it's a stretch, was Obama's inauguration speech, when he talked about shifting the debate to "Government that works and government that doesn't". But that was as a basis point for an attack he was making on a core philosophical belief of (small-c) conservatives (not the Republican party, they've lost the right to call themselves that) of limited government. I believe he used the term "false choice". In other words, I'm not going to shrink government, I'm going to find out how to make it bigger yet more effective. Doesn't sound too much like a commitment to a strategy of long-term entitlement reform to me.

Point E... sheesh. Come on, man.

[Lemur]

I'm cautious about point F, as it is the first mention I have seen of any hint of long term entitlement reform. When did that come up
Oh, who knows, maybe it got mentioned (http://www.cbsnews.com/stories/2009/01/16/politics/washingtonpost/main4727711.shtml) at some point.


President-elect Barack Obama pledged yesterday to shape a new Social Security and Medicare "bargain" with the American people, saying that the nation's long-term economic recovery cannot be attained unless the government finally gets control over its most costly entitlement programs.

That discussion will begin next month, Obama said, when he convenes a "fiscal responsibility summit" before delivering his first budget to Congress. He said his administration will begin confronting the issues of entitlement reform and long-term budget deficits soon after it jump-starts job growth and the stock market.

"What we have done is kicked this can down the road. We are now at the end of the road and are not in a position to kick it any further," he said. "We have to signal seriousness in this by making sure some of the hard decisions are made under my watch, not someone else's."

Maybe some leftist liberal columnist (http://www.kansascity.com/273/story/1022291.html) talked about it at some point.

It's possible some RINOs might have signed on in the hopes of advancing entitlement reform (http://www.realclearpolitics.com/articles/2009/02/gregg_will_help_move_entitleme.html) under Obama, too.


In months to come, Gregg will be worth celebrating. He is one of the smart guys on Capitol Hill, especially when it comes to fiscal policy. And he provides Obama with a third strong Republican Cabinet member, joining Defense Secretary Bob Gates and Ray LaHood at Transportation. [...]

Moreover, Mitch McConnell of Kentucky, the Republican leader of the Senate, told the National Press Club that a bipartisan deal on entitlements is something he thinks can and should happen in this Congress.

Obama said the same thing when he visited The Washington Post just before the inauguration, and now he has in Gregg someone who can help him lobby Congress to move that project forward.

-edit-

As for point (F), which got your gander up, I have no idea if the narrative you offer is legit. It's the one House Republicans are selling, but they would do, wouldn't they? They can't very well go after the new Prez with the 70% approval, so they would logically make a stink about the Congressional leaders with rather lower numbers. Hey, maybe that's exactly how it really happened, in which case they are very lucky that it just happens to be the most fortuitous way of positioning themselves. Frankly, I have a feeling that if the House Republicans had any intent of working with the new Prez, they could have made it happen.

[Crazed Rabbit]

The facts of the matter are America recovered quicker than other allied countries which where following smith's ideal of the free market, these countries continued in a slump until they began rearming. Im sure there are parts of FDR's new deal which did actually cause harm, but it is arguable that the new deal actually lengthend the depression or shortened it, various brilliant economists such as Friedman and Keynes have argued differing views and i would say it is difficult to pick one or the other as 'fact'

Oh really? Wikipedia suggests (http://en.wikipedia.org/wiki/Great_Depression) otherwise;

The massive rearmament policies to counter the threat from Nazi Germany helped stimulate the economies of Europe in 1937-39. By 1937, unemployment in Britain had fallen to 1.5 million. The mobilization of manpower following the outbreak of war in 1939 finally ended unemployment.


http://mediamatters.org/items/200901080005

extracts from article...

That place is absolutely nothing more than a parroting of left wing democrat talking points.


In a November 10, 2008, New York Times column, Krugman wrote that Roosevelt's policies included "long-run achievements" that "remain the bedrock of our nation's economic stability" and that Roosevelt's short-term successes were constrained because "his economic policies were too cautious."

Krugman long ago divorced his writing from economic facts and joined it instead with partisan pandering.

Most importantly, all he does here is talk - that is nothing compared to the actual research that was done by the two economists at UCLA. Partisan diehards will always fight what they oppose, no matter the facts.


Progressive economists are not alone in crediting Roosevelt's policies for easing the economic crisis. As Newsweek senior editor Daniel Gross noted on his blog on January 4, 2007, Federal Reserve Chair Ben Bernanke -- appointed by President George W. Bush -- wrote in his Essays on the Great Depression, "Only with the New Deal's rehabilitation of the financial system in 1933-35 did the economy begin its slow emergence from the Great Depression."

The author is a deceiver or a fool. Here is what Bernanke said: (http://www.federalreserve.gov/BOARDDOCS/SPEECHES/2002/20021108/default.htm)


Their argument, in short, is that under institutional arrangements that existed before the establishment of the Federal Reserve, bank failures of the scale of those in 1929-33 would not have occurred, even in an economic downturn as severe as that in the Depression

....

For practical central bankers, among which I now count myself, Friedman and Schwartz's analysis leaves many lessons. What I take from their work is the idea that monetary forces, particularly if unleashed in a destabilizing direction, can be extremely powerful. The best thing that central bankers can do for the world is to avoid such crises by providing the economy with, in Milton Friedman's words, a "stable monetary background"--for example as reflected in low and stable inflation.

Let me end my talk by abusing slightly my status as an official representative of the Federal Reserve. I would like to say to Milton and Anna: Regarding the Great Depression. You're right, we did it. We're very sorry. But thanks to you, we won't do it again.

CR

[Lemur]

Krugman long ago divorced his writing from economic facts and joined it instead with partisan pandering.
Didn't he win a Nobel Prize for economics (http://en.wikipedia.org/wiki/Paul_Krugman#Nobel_Prize) last year?

If he's a hack, what does it take not to be a joke in your book, CR?

[Crazed Rabbit]

Didn't he win a Nobel Prize for economics (http://en.wikipedia.org/wiki/Paul_Krugman#Nobel_Prize) last year?

If he's a hack, what does it take not to be a joke in your book, CR?

Oh, I'm sorry, did he win the Nobel for his opinion column?

CR

[Lemur]

He won it for work in "economic science," which seems to be not unrelated to (a) his column subject, and (b) what we are discussing.

Does a Nobel laureate in economic science need to agree with you to not be a hack?

[Crazed Rabbit]

IIRC, the nobel was for international trade research.

Now, the people who say FDR didn't help are those like Friedman, Bernanke, and those two UCLA fellows.

All have done extensive research on the Great Depression. I don't believe Krugman has. His articles are not reports of research he's done; they are his partisan look at current events.

Just look at what The Economist (http://www.fsa.ulaval.ca/personnel/vernag/EH/F/cause/lectures/krugman.htm)had to say on him.

"A glance through his past columns reveals a growing tendency to attribute all the world's ills to George Bush…Even his economics is sometimes stretched…Overall, the effect is to give lay readers the illusion that Mr Krugman's perfectly respectable personal political beliefs can somehow be derived empirically from economic theory."

CR

[Lemur]

The article is from '03, but it's fascinating. I had no idea Krugman was considered such a lefty! Ranked second only to Ann Coulter for pure partisanship by one survey? Wowsers, that's stern stuff. Thanks for the article. I see he won second place again in '07 (http://www.lyinginponds.com/archives/2008/01/20/partisan-punditry-2007/).

Okay, point taken. He's an anti-Bush shill. Who won the Nobel Prize.

[LittleGrizzly]

http://www.marginalrevolution.com/marginalrevolution/2008/11/ben-bernanke-on.html

Bernanke does suggest that some of the gains came from forced unionization and "efficiency wage" effects and yes that would credit the New Deal.

Look there is disagreement on the issue there were plenty of other economists mentioned in the article, so much so that to call it an historical fact is not accurate

Remarks by Governor Ben S. Bernanke
At the Conference to Honor Milton Friedman, University of Chicago, Chicago, Illinois
November 8, 2002

Those comments made at a conference to honour Friedman don't really invalidate what he said...

[Don Corleone]

Oh yeah, he won a nobel prize, so he has divinely inspired insights. They NEVER play politics with the award...:dizzy2:

[Xiahou]

Okay, point taken. He's an anti-Bush shill. Who won the Nobel Prize.
Sorta like Al Gore then. :yes:

[Major Robert Dump]

Maybe I'm not looking deep enough into what the depression was. But I always thought that letting food and goods go to waste in warehouses and plowing under perfectly good crops while people starved and went without was a pretty good sign that price fixing was not working and the depression was, in fact, still on.

[Devastatin Dave]

Sorta like Al Gore then. :yes:

Don't forget about Arafat.

[Lemur]

Or Henry Kissinger (https://www.youtube.com/watch?v=fYDo9BIeNHg). I take it we're drawing no distinction between the Peace Prize and the ones they give out for scientific disciplines?

-edit-

While we're making big lulz over hippie Swedes and their meaningless awards:


https://img.photobucket.com/albums/v489/Lemurmania/jobsrecessionssm_2.jpg

[Lemur]

I just haven't shared enough pretty charts in this thread ...


https://img.photobucket.com/albums/v489/Lemurmania/spkmsc5sue2tgkahrvqrxq.gif (http://www.gallup.com/poll/114202/Obama-Upper-Hand-Stimulus-Fight.aspx)

[Devastatin Dave]

I just haven't shared enough pretty charts in this thread ...


https://img.photobucket.com/albums/v489/Lemurmania/spkmsc5sue2tgkahrvqrxq.gif (http://www.gallup.com/poll/114202/Obama-Upper-Hand-Stimulus-Fight.aspx)

Hail Ceasar!!!!

[Xiahou]

While we're making big lulz over hippie Swedes and their meaningless awards:


https://img.photobucket.com/albums/v489/Lemurmania/jobsrecessionssm_2.jpgThat population adjusted? Seeing as how the source is "The office of the Speaker" (Nancy Pelosi), I'm gonna call shenanigans on that one. :wink:

Oh noes! Worst recession evar- pass stimulus now!

[KukriKhan]

In other top news:

POTUS bumps his head (again)
https://jimcee.homestead.com/mc1.jpg

climbing aboard MarineCorps1 (MC1). Yesterday, he startled the the MC1 Marine Guard who was rendering his finest Corps salute, by reaching out to shake the lad's hand and chit-chat a moment. (Note: It always takes these never-been-in-service-before new POTUS's about 6 months to learn how to return a salute; I always wondered why some Command Sergeant Major didn't swing by for a quick lesson).

[seireikhaan]

That population adjusted? Seeing as how the source is "The office of the Speaker" (Nancy Pelosi), I'm gonna call shenanigans on that one. :wink:

Oh noes! Worst recession evar- pass stimulus now!
Actually, if you look at the graph, it claims source as Bureau of Labor Statistics. But, of course, I'm sure they're just in on the whole thing, so therefore we can't trust any sources. ~:handball:

[Xiahou]

In other top news:

POTUS bumps his head (again)
https://jimcee.homestead.com/mc1.jpg

climbing aboard MarineCorps1 (MC1). Yesterday, he startled the the MC1 Marine Guard who was rendering his finest Corps salute, by reaching out to shake the lad's hand and chit-chat a moment. (Note: It always takes these never-been-in-service-before new POTUS's about 6 months to learn how to return a salute; I always wondered why some Command Sergeant Major didn't swing by for a quick lesson).

Obama also recently tried to enter the Whitehouse through a window- that was mistaken for a door:
https://img99.imageshack.us/img99/3068/algobamadooror1.jpg
Notice the actual door, a few feet off to the right. :laugh4:

[Lemur]

Obama also recently tried to enter the Whitehouse through a window- that was mistaken for a door:

Notice the actual door, a few feet off to the right. :laugh4:
I seem to have given you a bad case of Lemur's Disease (https://forums.totalwar.org/vb/showpost.php?p=2120709&postcount=3151).

Oh noes! The Bureau of Labor Statistics and Nancy Pelosi are working with the Nobel Committee to deceive Americans into doing bad things! Run!


https://img.photobucket.com/albums/v489/Lemurmania/six_recessions.gif https://img.photobucket.com/albums/v489/Lemurmania/employ_recessionthumb600x422.jpg

[Lord Winter]

It would be nice if those graphs had 2008/2009 data. Looks like the recession is going to stay here for a while. The past reccessioins have all taken 6-12 months to end.

[Seamus Fermanagh]

It would be nice if those graphs had 2008/2009 data. Looks like the recession is going to stay here for a while. The past reccessioins have all taken 6-12 months to end.

The historical norm is 6-24 months -- only the Great Depression lasted significantly longer. Some would argue that was because of the "cure." Others argue that without the New Deal, it would have gone on longer. Who can be sure?

[KukriKhan]

Just watched his first prime-time news conference. Thirteen questions, 10 minute answers apiece.

I've figured it out, I think: wait 'til he says the phrase "the bottom line" or "my bottom line". Words spoken after that phrase are the answer. Previous words are, I dunno, internal discussion, academic reflection, tutoring time? Whatever.

"Bottom line" is the key. Wait for it, and all will be revealed.

[Husar]

"Bottom line" is the key. Wait for it, and all will be revealed.

I often do the same with long reviews, often all the info you need is in the conclusion.

Concerning windows vs doors, the actual door seems quite big for a door and looks more like a window to me, I might have made the same mistake(does that mean I can run for POTUS now? ~D ).

It's also great to have a big recession now, I hope it continues for a while, we can have a big boom afterwards, it's best if they wait with that until I am done studying. :eyebrows:

[Crazed Rabbit]

It gets worse:
A new bureaucracy will be formed: (http://www.bloomberg.com/apps/news?pid=20601039&refer=columnist_mccaughey&sid=aLzfDxfbwhzs)

One new bureaucracy, the National Coordinator of Health Information Technology, will monitor treatments to make sure your doctor is doing what the federal government deems appropriate and cost effective. The goal is to reduce costs and “guide” your doctor’s decisions (442, 446). These provisions in the stimulus bill are virtually identical to what Daschle prescribed in his 2008 book, “Critical: What We Can Do About the Health-Care Crisis.” According to Daschle, doctors have to give up autonomy and “learn to operate less like solo practitioners.”

Keeping doctors informed of the newest medical findings is important, but enforcing uniformity goes too far.

New Penalties

Hospitals and doctors that are not “meaningful users” of the new system will face penalties. “Meaningful user” isn’t defined in the bill. That will be left to the HHS secretary, who will be empowered to impose “more stringent measures of meaningful use over time” (511, 518, 540-541)

What penalties will deter your doctor from going beyond the electronically delivered protocols when your condition is atypical or you need an experimental treatment? The vagueness is intentional. In his book, Daschle proposed an appointed body with vast powers to make the “tough” decisions elected politicians won’t make.

The stimulus bill does that, and calls it the Federal Coordinating Council for Comparative Effectiveness Research (190-192). The goal, Daschle’s book explained, is to slow the development and use of new medications and technologies because they are driving up costs. He praises Europeans for being more willing to accept “hopeless diagnoses” and “forgo experimental treatments,” and he chastises Americans for expecting too much from the health-care system.

Elderly Hardest Hit

Daschle says health-care reform “will not be pain free.” Seniors should be more accepting of the conditions that come with age instead of treating them. That means the elderly will bear the brunt.

Medicare now pays for treatments deemed safe and effective. The stimulus bill would change that and apply a cost- effectiveness standard set by the Federal Council (464).

And to think, this is only the first month of Obama's presidency.

CR

[Husar]

That actually sounds worse than our system, though i think for experimental treatments you may have to pay here as well, it seeme to be mostly decided by the insurance you have, which would be the same with a private insurance system, or can you currently get a 1 million dollar experimental treatment for free in the US when you don't have any insurance or do all insurance companies just pay anything?
Because the article sure makes it sound like currently you get any treatment for free, no matter how much it costs, but the way I always understood it you currently have to pay for every plaster you get from the doctor.

[Xiahou]

It gets worse:
A new bureaucracy will be formed: (http://www.bloomberg.com/apps/news?pid=20601039&refer=columnist_mccaughey&sid=aLzfDxfbwhzs)


And to think, this is only the first month of Obama's presidency.

CR
Don't forget the disturbingly protectionist, "Buy American" (http://www.investors.com/editorial/editorialcontent.asp?secid=1501&status=article&id=319075045418246) provisions:
As if the $900 billion stimulus package wasn't controversial enough, provisions requiring purchase of U.S.-made iron and steel for government contracts that were slipped into the House version, and of all manufactured goods in the Senate's, have annoyed more people than expected — across the world.

Last week, leaders from Canada, Brazil, China, the U.K., India, Mexico, Germany and the Czech Republic, among others, spoke out against such "Buy American" provisions as protectionist. Some threatened retaliation.

The most assertive voice came from the European Union, our top overseas market, which last year engaged in two-way trade with the U.S. totaling $709 billion.

EU ambassador to the U.S. John Bruton warned Congress that the "Buy American" provisions will damage the U.S. as well as world trade by building protectionist sentiment around the world.Let's hope that gets let on the cutting room floor in the final version of the bill. :sweatdrop:

[Seamus Fermanagh]

Don't forget the disturbingly protectionist, "Buy American" (http://www.investors.com/editorial/editorialcontent.asp?secid=1501&status=article&id=319075045418246) provisions:Let's hope that gets let on the cutting room floor in the final version of the bill. :sweatdrop:

I thought Obama wanted to redo FDR's approach, not that of Hoover?

[Spino]

The abominable snowjob bill just passed the Senate, 61 to 37. Three Republicans voted for it; Susan Collins and Olympia Snowe (both from Maine) and Arlen Specter (Pennsylvania).

[Don Corleone]

The abominable snowjob bill just passed the Senate, 61 to 37. Three Republicans voted for it; Susan Collins and Olympia Snowe (both from Maine) and Arlen Specter (Pennsylvania).

I think Maine gets the highest return on the stimulus bill, in terms of money in-money out. Good for them. Senators represent their states, not their national party.

As for Specter, I think the time has come to refuse him the right to caucus with with the party. He's more loyal to the Democatic party, and has been for at least the past decade, than at least half the Democratic senate caucus. If he's unwilling to make the letter change (R-> D), perhaps Senator McConnell should do it for him.

[drone]

As for Specter, I think the time has come to refuse him the right to caucus with with the party. He's more loyal to the Democatic party, and has been for at least the past decade, than at least half the Democratic senate caucus. If he's unwilling to make the letter change (R-> D), perhaps Senator McConnell should do it for him.

For what it's worth, here (http://www.washingtonpost.com/wp-dyn/content/article/2009/02/08/AR2009020801710.html) is Specter's justification for his vote.

I'm still a little surprised that the bill is almost $20B more than the House's version, I would have thought the opposition could have carved out a little more of the pork. So if the House approves $819B, and the Senate approves $838B, any bets on the final bill? I'm guessing a nice compromise at $850B. ~:rolleyes:

[Strike For The South]

Can we call it a spending package instead of a stimulus package? I would like to have the people who are robbing me to at lease be honest. I will put up with a liar or a thief but not both.

[Don Corleone]

Can we call it a spending package instead of a stimulus package? I would like to have the people who are robbing me to at lease be honest. I will put up with a liar or a thief but not both.

How about if we call it the Health Care reform and government oversight of your your health care (http://www.bloomberg.com/apps/news?pid=20601039&refer=columnist_mccaughey&sid=aLzfDxfbwhzs) bill?


The Federal Council is modeled after a U.K. board discussed in Daschle’s book. This board approves or rejects treatments using a formula that divides the cost of the treatment by the number of years the patient is likely to benefit. Treatments for younger patients are more often approved than treatments for diseases that affect the elderly, such as osteoporosis.

In 2006, a U.K. health board decreed that elderly patients with macular degeneration had to wait until they went blind in one eye before they could get a costly new drug to save the other eye. It took almost three years of public protests before the board reversed its decision.

[Crazed Rabbit]

How about if we call it the Health Care reform and government oversight of your your health care (http://www.bloomberg.com/apps/news?pid=20601039&refer=columnist_mccaughey&sid=aLzfDxfbwhzs) bill?

A-hem. (https://forums.totalwar.org/vb/showpost.php?p=2132829&postcount=88)

Clearly, LD knows no political boundaries.

CR

[Don Corleone]

A-hem. (https://forums.totalwar.org/vb/showpost.php?p=2132829&postcount=88)

Clearly, LD knows no political boundaries.

CR

:oops: Sorry.

[Seamus Fermanagh]

For what it's worth, here (http://www.washingtonpost.com/wp-dyn/content/article/2009/02/08/AR2009020801710.html) is Specter's justification for his vote.

I'm still a little surprised that the bill is almost $20B more than the House's version, I would have thought the opposition could have carved out a little more of the pork. So if the House approves $819B, and the Senate approves $838B, any bets on the final bill? I'm guessing a nice compromise at $850B. ~:rolleyes:

Actually, CBO figures suggest that a final tag for the House bill would be nearer $1.3T, whereas the Senat's will finish closer to $1.0T. However, I would not bet against the Conference process jacking it up a good bit. The three GOP Senators not only have to be less than pleased about the conference bill, but less than pleased enough to stage a unanimous filibuster effort with the rest of the GOP -- a tougher bet.

[drone]

I guess that's what I get for looking at the fully spun press releases instead of the CBO. ~:doh:

One ray of responsibility sunshine, the House leadership has decided to move forward with a bill to suspend their COLA raises for 2010 (http://voices.washingtonpost.com/capitol-briefing/2009/02/no_pay_raise_for_lawmakers_nex.html?hpid=topnews). Tightening of the belt perhaps?

Of course, the uninformed cynic in me is suspicious that the COLA "raise" is actually a salary adjustment based on the Labor department stats, and the House fears they may actually be looking at a pay cut with the recession in full swing. :inquisitive: God forbid that that should happen! Anyone familiar with the algorithm they use to determine the adjustment?

[Xiahou]

The Economist (http://www.economist.com/printedition/displayStory.cfm?Story_ID=13061443) has also chimed in on the 'Buy American' provision in the stimulus. (They don't like it.)
Once again, the task of saving the world economy falls to America. Mr Obama must show that he is ready for it. If he is, he should kill any “Buy American” provisions. If he isn’t, America and the rest of the world are in deep trouble.

[Proletariat]

Forget the chump change pork in this bill, the Buy American thing is the scariest part of this bill, imo.

[seireikhaan]

I thought Obama wanted to redo FDR's approach, not that of Hoover?
It appears this is more of the House's work(not surprising given who leads it :~:rolleyes:). However, I really wish Obama would make a more concerted effort to nix this thing in the bud. I really can't stand these "buy *insert country*" things.

[Husar]

How about, when you talk of final costs, you factor in the interest that needs to be paid until the resulting national debt has been paid off? :sweatdrop:

[LittleGrizzly]

I think almost every economist agree's protectionism is bad... but when did something like expert opinion ever bother politicians...

[Lemur]

One of National Review's (and the CATO Institutes') pet economists gets busted (http://patriotsquill.blogspot.com/2009/02/stunning-shamlessness-of-right.html).


“I think about the stimulus as an economist but I feel it as a father. Barack Obama is destroying my daughter's future. It is like sitting there watching my house ransacked by a gang of thugs. That’s how I feel, now back to how I think.” [...]

Now, my first reaction was to sneer at the NRO blogger who, after 8 years of tax cut induced deficits that managed to double the national debt, has suddenly experienced a Damascene conversion and now believes that deficits are, indeed bad. I was going to post a note to that effect on this blog, but point out that as far as this fellow Arnold Kling is concerned, I just don't know enough about him to say whether or not he too is a convenient convert to the religion of balanced budgets.

But then I did a little googling and stumbled upon this gem on arnoldkling.com:

[...] "In conclusion, I believe that a large, temporary revenue-sharing program would be a good approach for fighting a recession. This form of fiscal stimulus would quickly find its way into the economy. Unfortunately, I suspect that there is little chance of any Keynes getting through to Bush."

So this CATO Institute economist who depicts Barack Obama's simulus plan as akin to a gang of thugs ransacking his house, and who worries for his daughter's future, is the same guy who back in 2000 was urging Bush to go on a Keynsian spending spree?

[Vladimir]

Hi guys :wave: . I know I'm late.



https://img.photobucket.com/albums/v489/Lemurmania/six_recessions.gif https://img.photobucket.com/albums/v489/Lemurmania/employ_recessionthumb600x422.jpg

Does anyone notice a disturbing trend? The more recent the recession, the longer the recovery. From these pretties I'm not very concerned about this recession. I am concerned that it appears the economy is less robust than ever before.

[LittleGrizzly]

Possibly just reading too much into it... or looking at it the wrong way. For example the feb '01 recession probably wasn't helped by 9/11...

A more positive way to look at it would be the recent recessions seem to involve less of a downturn, amd the dec'07 one is one of the shortest recessions on there...

[Don Corleone]

I'd like to shift gears for a moment and discuss the 2nd half of the financial bailout that Tim Geithner announed yesterday.

So, after weeks of hearing we need the money, but we need more oversight, more clarity... Barney Frank promising he's going to watch every nickel personally... he goes up to the Hill and... pulls a Paulson "Just give me the money... we need it and I can't tell you yet where it's going".

A couple of I think common sense questions...

-Everyone and his brother knows Geithner is putting together a bad bank. Why doesn't he just come out and say it? It can't be worse than the speculation.

-Why isn't Hank Paulson in jail? As far as I can tell, he told everyone he understood their concerns but would do what was necessary to keep the public plugged in. He then turned around and handed out $350B to his buddies at Citbank, Morgan Stanley and the like... I guess the CEO of Lehman Brothers wasn't one of Hank's buddies.

-Why does anyone have any hope that there will be more oversight on Treasury this time around? I'm not going to argue that it was the Bush Treasury department that stole $350 billion, it was. But wasn't Barney Frank chairman of the House Financial Services comittee last year? Wasn't he tasked with oversight of Paulson, especially on where TARP was going? Is there any reason to believe he's going to be more intrusive, more regulatory on the a Treasury Secretary that's part of a Democratic administration?

It just doesn't make any sense on any of this. Hank Paulson stole $350B. Tim Geithner is acting as though he expects the right to do the same. And Barney Frank is standing in the town square, pompously proclaiming "Twust me.. this time I'll get it wight"

[Don Corleone]

P.S. Wall Street was so impressed with Mr. Geithner's proverbial 'turd on the floor', indices dropped over 5% yesterday on the news, on broad concerns (i.e. across all sectors).

[Crazed Rabbit]

One of National Review's (and the CATO Institutes') pet economists gets busted (http://patriotsquill.blogspot.com/2009/02/stunning-shamlessness-of-right.html).


Hmm, its not quite so simple. The economist said;

Kling says this is a big bill, but not a big stimulus. There is nothing timely, targeted, or temporary about it. It is a simple transfer of money from one set of people to favored interest groups of the Democratic Party.

Which is a very good point; the bill is not what even a Keynesian economist would find ideal - it has long term spending, a whole bunch of pork ($300MM for green golf carts!), etc.

So wanting Keynesian spending back in 2000 and not liking this bill because it adds a huge debt and isn't that keynesian isn't hypocritical.

CR

[Seamus Fermanagh]

-Why isn't Hank Paulson in jail? As far as I can tell, he told everyone he understood their concerns but would do what was necessary to keep the public plugged in. He then turned around and handed out $350B to his buddies at Citbank, Morgan Stanley and the like... I guess the CEO of Lehman Brothers wasn't one of Hank's buddies.

Paulson got Congress to pass, and the President to sign, a bill giving him virtually unlimited authority to do whatever he wanted with the money short of putting it, directly at least, into his own retirement account. When he changed the ostensible plan, 15 minutes after receiving the money, he was met with a chorus of "Hey, wait a minute"'s to which he responded, "It's okay, I know better." Their response to this wondrous approach was to say, "okay." They then did what they really wanted which was to shelve it and get back to their districts for the October races. There is no jail option unless you indict at least 536 co-conspirators.



-Why does anyone have any hope that there will be more oversight on Treasury this time around? I'm not going to argue that it was the Bush Treasury department that stole $350 billion, it was. But wasn't Barney Frank chairman of the House Financial Services comittee last year? Wasn't he tasked with oversight of Paulson, especially on where TARP was going? Is there any reason to believe he's going to be more intrusive, more regulatory on the a Treasury Secretary that's part of a Democratic administration?

Now these are good "questions." Not really questions of course, as you already know the answers.

[drone]

The Democratic leadership in Congress needs to be changed, a revolt within the party is needed to get more competent leadership in place. Pelosi may have been a good minority leader, but she does not have the ability to run the show. I knew as soon as Bush asked for "$700B, no oversight, immediately to avert disaster, disagree and you're a terrorist", it was a bad idea, he had used this tactic several times before. Yet they still caved, even when they had control. Deja vu.

The bankers get to face Congress today, should make for a good dog and pony show, with much vitriol from the lawmakers to show their constituents they are outraged. I'd give anything for the bankers to grill back why the TARP funds were not legislated with oversight in the first place. The look on Barney's face would be priceless.

[Don Corleone]

Judd Gregg; (http://gregg.senate.gov/public/)
Jeanne Shaheen; (http://shaheen.senate.gov/)
Paul Hodes; (http://hodes.house.gov/)
and Carol Shea-Porter (http://www.shea-porter.house.gov/)

are teh SUCK as a congressional delegation. :daisy:. Utter :daisy: I mean, they have their head up their :daisy:. They really, really suck. They're so inept and lazy, it should be criminal. We should impeach all 4 of them. :furious3::furious3:

Want to know what portion of the ~$1 Trillion, that's trillion with a "T" is going to New Hampshire? 10 billion? 1 billion? 100 million? Try ZERO!!! John Lynch announced that he had requested 300 million in state medicaid/medicare payments as part of the stimulus, and 200million in infrastructure improvements. I'm not certain, but I believe both technically are unfunded mandates, so it's not like Congress didn't force NH to spend the money in the first place. And this morning, on the news, I heard that Lynch will not be entering any federal stimulus money into the expected revenue, as none of what he requested was approved. NONE!

I can understand Gregg, being out in the wilderness, not being able to represent... but our Democrats are so abysmal at representing our state, it's criminal. Snowe and Collins, who represent Maine of all places, are bringing home about 15billion. NH? Not one :daisy: penny. ARRRRGGGGGH!!!!! :furious3::furious3::furious3::furious3: (I'm having a Howard Dean moment...)

[Spino]

Hi guys :wave: . I know I'm late.

Does anyone notice a disturbing trend? The more recent the recession, the longer the recovery. From these pretties I'm not very concerned about this recession. I am concerned that it appears the economy is less robust than ever before.

I ain't too edyookated on these matters but could this trend be linked to the decline of our industry and overall exports? With each passing year we make less and less 'stuff' and (to my limited knowledge) fewer nations consume materials and/or food from the US of A. Might I venture forth the idea that a nation that imports more than it exports is more susceptible to a prolonged recession/depression than one which exports more than it imports?

Might a service oriented economy be more prone to the pitfalls of a recession/depression than an industry oriented one?

Just a thought, don't take it too seriously as I'm only on my first cup of coffee...

[Seamus Fermanagh]

Judd Gregg; (http://gregg.senate.gov/public/)
Jeanne Shaheen; (http://shaheen.senate.gov/)
Paul Hodes; (http://hodes.house.gov/)
and Carol Shea-Porter (http://www.shea-porter.house.gov/)

are teh SUCK as a congressional delegation. :daisy:. Utter :daisy: I mean, they have their head up their :daisy:. They really, really suck. They're so inept and lazy, it should be criminal. We should impeach all 4 of them. :furious3::furious3:
...specifics.... ARRRRGGGGGH!!!!! :furious3::furious3::furious3::furious3: (I'm having a Howard Dean moment...)


Stop sugar-coating things Don, tell us what your really feel.

:devilish: :laugh4::laugh4::laugh4:

[Ironside]

I ain't too edyookated on these matters but could this trend be linked to the decline of our industry and overall exports? With each passing year we make less and less 'stuff' and (to my limited knowledge) fewer nations consume materials and/or food from the US of A. Might I venture forth the idea that a nation that imports more than it exports is more susceptible to a prolonged recession/depression than one which exports more than it imports?

Might a service oriented economy be more prone to the pitfalls of a recession/depression than an industry oriented one?

Just a thought, don't take it too seriously as I'm only on my first cup of coffee...

Interesting enough I was thinking of something simular but from a very different angle. To put it short, the current economic system requires eternal growth, something that by it's very nature is impossible. Currently there's been several signs, for years, indicating that the current system is close to its end in the western world and it's fairly safe to bet that the end will be unstable, with events simular to the current recession (or I'm off with 50+ years).

And then you suggest that the larger focus on the service sector, something that is in the current market's very nature, that causes deeper recessions... :juggle:

Well for me they are linked, as both things are simply to evolution of the market, to its end. :logic:

Got absolutly not idea what would replace the current system though.

Spino, are you sure that the industrial production actually drops in the US and not just the employment in the industrial sector?

[Spino]

Interesting enough I was thinking of something simular but from a very different angle. To put it short, the current economic system requires eternal growth, something that by it's very nature is impossible. Currently there's been several signs, for years, indicating that the current system is close to its end in the western world and it's fairly safe to bet that the end will be unstable, with events simular to the current recession (or I'm off with 50+ years).

And then you suggest that the larger focus on the service sector, something that is in the current market's very nature, that causes deeper recessions... :juggle:

Well for me they are linked, as both things are simply to evolution of the market, to its end. :logic:

Got absolutly not idea what would replace the current system though.


Well industry or not first and foremost an overhaul of our monetary policy is way overdue. Relying on a system that allows banks to generate ridiculous amounts of money vis a vis credit which ultimately places the entire system deeply into debt seems to defy all reason. I fail to see how a system is sustainable. So long as such a system is allowed to continue unabated it will only encourage foolishness and irresponsible practices (i.e. the sub-prime market) to take root to the detriment of the entire system. I suppose this is why the gold standard argument often comes up in these types of conversations, it deals with basing currency on something more than guarantees based on projected growth. It seems to me if your your currency/credit is based on nothing but on an empty guarantee of sustainable growth then incompetence combined with lack of confidence in the entities generating such credit can and will routinely wreak havoc. But my grasp of these matters is entirely superficial and based on the few articles and documentaries I've bothered to check out. I guess we'll see what happens once the dust settles.

Here's another question. What would happen to the existing system (and affected currencies) if someone else offered a more reliable and sustainable alternative during a global economic crisis? Meaning what would happen if someone decided to 'cheat' and take a dramatic step outside the widely accepted rules of the game? It seems to me that the current system works only because everyone seems to buy into the game. What would happen if some nation were to break ranks and back its currency with something more than an empty guarantee based on projections? I'm not necessarily talking about a gold standard but simply an alternative to the widely accepted norm.


Spino, are you sure that the industrial production actually drops in the US and not just the employment in the industrial sector?

Well I'm not really sure which is why I put that question out there to begin with. I suppose my problem is in our dependence on industries that produce 'nothing' (i.e. service industries) versus those that produce 'something' (i.e. tangible items that can be used, rented, sold or scrapped/recycled). Based purely on my observations it is painfully apparent that all but a handful of consumer goods are made in the USA. If I were to take a tally of everything in my home I'll wager all but the raw materials used to make my home and a smattering of goods I've bought were made here in the US. It seems like everything I wear, watch, use, etc. (along with a growing percentage of the things I eat), are manufactured or produced outside the USA.

[Don Corleone]

So, I'm very, very confused. The White House and House & Senate majorities promised a new era of openness and inclusion for citizens in the government process.

So, could somebody explain to me why the compromise language was reached on Wednesday, but it was only posted to the Speaker's website last night at 11:30 PM Eastern, when the vote is schedule for 9AM this morning?

Could somebody explain to me why the House staff took the time to print a computer file out and scan it in, rather than posting the electronic version of the document? It couldn't possibly be so that we can't parse the document or use search terms, could it?

What Nancy Pelosi hoped you'd sleep through... (http://www.speaker.gov/newsroom/legislation?id=0273)

Could somebody explain to me why only Democrats were allowed to be on the bi-cameral compromise committee? Forget about the average citizens, even the 3 Senate Republicans that voted for the Stimulus didn't get to see it until close to midnight last night and have to vote on it at 9AM.

Does all of this sound open and inclusive to anyone else? :juggle2:

[drone]

Didn't you hear? It's got to be on Obama's desk by Monday morning. Letting the GOP in on the discussion might threaten that. ~;)

That link is either down or slowed to a crawl. Anybody know what the software package used to generate the document was? They may have printed and scanned it to prevent the markups from being seen, I think that has bit them before.

[Xiahou]

Forget about the average citizens, even the 3 Senate Republicans that voted for the Stimulus didn't get to see it until close to midnight last night and have to vote on it at 9AM.The bill is supposed to be over 1000 pages. I think we can be pretty sure that no one has read this final version of the bill in its entirety- but that won't stop them from voting on it. :sweatdrop:

The Heritage Foundatio (http://www.heritage.org/Research/Welfare/wm2287.cfm)n is also claiming that the stimulus bill will repeal the welfare reform from the 1990s.
The House and Senate stimulus bills will overturn the fiscal foundation of welfare reform and restore an AFDC-style funding system. For the first time since 1996, the federal government would begin paying states bonuses to increase their welfare caseloads. Indeed, the new welfare system created by the stimulus bills is actually worse than the old AFDC program because it rewards the states more heavily to increase their caseloads. Under the stimulus bills, the federal government will pay 80 percent of cost for each new family that a state enrolls in welfare; this matching rate is far higher than it was under AFDC.

[drone]

The Heritage Foundatio (http://www.heritage.org/Research/Welfare/wm2287.cfm)n is also claiming that the stimulus bill will repeal the welfare reform from the 1990s.

Obama is supposed to be destroying Bush's legacy, not Clinton's. :inquisitive:

EDIT-> Stimulus passes in the House 246-183, no Republican votes for it, 7 Dems vote no.
http://www.washingtonpost.com/wp-dyn/content/article/2009/02/13/AR2009021301596.html?hpid=topnews

[Lemur]

I thought this (http://www.reason.com/blog/show/131670.html) was fairly astute:


When it comes to bailout/stimulus/econ, there is no significant break in policy between George W. Bush and Barack Obama, no matter how much it benefits enthusiasts and detractors from pretending there's a sharp break between the two. The biggest economic political event last fall was not the election, it was the bipartisan, unpopular, panic-driven bailout. So yeah, Obamanomics from the outset precludes much of any warm embrace between liberals and libertarians. Much like Bushonomics did throughout his term. Hmmmm, what do the two presidents (and the congressional majorities that enabled them) have in common?

[Seamus Fermanagh]

Could somebody explain to me why only Democrats were allowed to be on the bi-cameral compromise committee? Forget about the average citizens, even the 3 Senate Republicans that voted for the Stimulus didn't get to see it until close to midnight last night and have to vote on it at 9AM.

Errr....because they won largish majorities in both houses and don't have to give the minority anything but the right to speak to the issue and to vote?

The key dynamic is power. While the Dems have it, they intend to use it to re-shape things in the direction they think is best. The part that galls me is that, when the GOP had that power, they were too busy either feathering their own nests or trying to "make nice" with the media to actually attempt the same thing. All-in-all, the Dems are just better at wielding power. I wish to God they did so on anything APPROACHING an agenda I'd be happy with.

[Spino]

No matter how you slice it GW Bush may have been a two term Republican but he was a terrible conservative. Speaking purely as to conservative principles his biggest accomplishments were the tax cuts and SCOTUS appointments. Taking the remainder of his policies and achievements at face value GW Bush fits the definition of a RINO more than anything else.

[Ironside]

Well industry or not first and foremost an overhaul of our monetary policy is way overdue. Relying on a system that allows banks to generate ridiculous amounts of money vis a vis credit which ultimately places the entire system deeply into debt seems to defy all reason. I fail to see how a system is sustainable. So long as such a system is allowed to continue unabated it will only encourage foolishness and irresponsible practices (i.e. the sub-prime market) to take root to the detriment of the entire system. I suppose this is why the gold standard argument often comes up in these types of conversations, it deals with basing currency on something more than guarantees based on projected growth. It seems to me if your your currency/credit is based on nothing but on an empty guarantee of sustainable growth then incompetence combined with lack of confidence in the entities generating such credit can and will routinely wreak havoc. But my grasp of these matters is entirely superficial and based on the few articles and documentaries I've bothered to check out. I guess we'll see what happens once the dust settles.

The thing with that is that it (has) works(ed?), the speculated growth has been followed by an actual growth for decades, and is even pushed on as the system has to grow to work properly. A change needs to be able to handle 0 growth or deflation without it being terribly bad.


Here's another question. What would happen to the existing system (and affected currencies) if someone else offered a more reliable and sustainable alternative during a global economic crisis? Meaning what would happen if someone decided to 'cheat' and take a dramatic step outside the widely accepted rules of the game? It seems to me that the current system works only because everyone seems to buy into the game. What would happen if some nation were to break ranks and back its currency with something more than an empty guarantee based on projections? I'm not necessarily talking about a gold standard but simply an alternative to the widely accepted norm.

Hard to say, the system of grow or die is very integrated to the economy today and has been even before the loss of the gold standard. That indicates that the change has to be larger than a simple removal of fiat currency. But breaking the game depends on how its done, a brilliant reform would probably spread slowly at the start while being rejected by the others. Then it would settle in the industrial countries, but the question is what would happen for the rest? The aren't at the same point on the economical development trends as the west.


Well I'm not really sure which is why I put that question out there to begin with. I suppose my problem is in our dependence on industries that produce 'nothing' (i.e. service industries) versus those that produce 'something' (i.e. tangible items that can be used, rented, sold or scrapped/recycled). Based purely on my observations it is painfully apparent that all but a handful of consumer goods are made in the USA. If I were to take a tally of everything in my home I'll wager all but the raw materials used to make my home and a smattering of goods I've bought were made here in the US. It seems like everything I wear, watch, use, etc. (along with a growing percentage of the things I eat), are manufactured or produced outside the USA.

Yet your industry is probably producing more than ever, but the focus are no longer on those consumer goods that has that note "made in XX". It's hard to tell without those raw numbers. The numbers employed has gone down, but has also the "today, 10 people produce 10 times more than what 100 people produced yesterday" factor.