All I’ve read is either “this is just what this country needs to get back on track” or “it’s certain to collapse the economy,” so I thought I’d get a little more meat to the analysis already out there. Anyone care to tell me their opinions on what’s good and bad in it?
The details are beyond comprehesion and the amounts of money are staggering so while the effects aren’t guaranteed even though the debt is I think the question was always “For those opposing it, what other solution is there?”
You can’t sit on your hands and wish it away while every day the chain reaction downward death spiral continued. The fix will be expensive and painful no matter what it is so I for one rather take the punch to the gut now rather than a gun to the head later.
Krugman likes it.
1.75 trillion dollars of debt in one year is absolutely insane.
So, should we raise taxes and make people poorer, or cut spending and put people out of work?
It is big. He told the truth and that is un-American, We are comfortable with out government lying to us. When they stop it, we become nervous and scared. Lie damn it. I am used to it and am unprepared to face the truth.
That’s okay.
You can all rest assured that the entirety of the national debt held by the public will be retired by 2014.
http://www.businessweek.com/1999/99_32/b3641059.htm
Now, does anyone else see how these multi-year projections are crazy?
I think ones view of the budget is going to depend on whether you agree with the philosophy behind the budget, which is a repudiation of Reaganism and trickle down economics. The last eight years has demonstrated that increasing the gap between the very rich and everyone else does not lead to prosperity. When the vast majority of Americans don’t get benefit from improved productivity, they respond either by consuming via debt or not consuming - either of which is disastrous to the economy.
It is far more daring than I ever expected. I think it is more daring than Krugman expected. Sure it is risky, but if it works, and I think it will, I predict a very prosperous future.
Hey, if the Supremes had voted for Al Gore, it could have happened. No projection will be accurate if a moron is allowed in to gum up the works.
In any case, nothing that far out is more than a guess, unless Hari Seldon pops up.
Really? If Al Gore was elected we would be entering our 18th year of economic expansion with the housing market and the dot coms roaring and all of us partying like it was 1999?
The quote you used said Could not Would.
I see Obama’s plan is reducing mortgage interest deductions which will not be a good idea when it comes to reducing the increasing inventories of homes for sale. That’s a major disincentive, although I’ve heard from representatives in both camps that that will be majorly contested and probably thrown out of the proposal.
On the other hand, California has set aside a pool of $100M in tax credits for new home sales starting March 1st (up to $10K in tax credits or 5% of the home’s sale price - which ever is lower), first come first serve. That might be of use to help the idle home builders.
Here is a scenario. The Tech Bubble would still have burst - no getting away from that. However Gore would have pushed through tax cuts that increased consumption, which would have caused a much faster rate of job growth than we got, and would help keep tax revenue up and welfare and unemployment payments down. We wouldn’t have sunk hundreds of billions into Iraq. If he had gone to work on his windmill instead of doing something about the warning of the 9/11 attack, he still would have put a smaller amount of resources into Afghanistan, and just maybe have caught bin Laden and cut the head off of al Qaeda.
Not being ideologically opposed to regulation, he would have been far more likely to have reined in the excesses of the mortgage market and the credit market before they exploded.
Sure, unexpected things could happen and nothing is certain, but the current crisis was not inevitable. It required the government to be asleep at the switch, which happened because the railroad owners thought that requiring one train to be on the tracks at one time was just hurting their competitiveness.
Is that a separate rule, or part of the cut in the deduction rate for those making over $250K. I can’t believe the former. If the latter, I don’t think it will have much impact. First, none of the tax increase take effect until we’re out of the recession. Second, we’re talking about 3% of the population here - people with enough money so this isn’t going to be a make or break factor. Third, we need to get the foreclosed houses out of inventory. People affected by this rule are unlikely to be in the market for these. First time homebuyers, who get the break in the housing plan, are.
I did buy a house on short-sale that was about to be foreclosed and turned it around to mortgage back to my 20 year old son who has no credit history and would not have qualified for a mortgage himself. So, I don’t think the 3% you are referring to are just idly standing by. There are opportunities out there.
Also, as I said before, California is reviving the housing market differently. and I expect California’s plan will help rebound the market much more quickly than the federal plan will since California’s plan includes any homebuyer buying a new house, which in turn helps the builders retain employees to lessen the unemployment rate in the state.
I’m thinking, are there any projections on how many future generations will be required to pay back your massive deficit?
Are you going to qualify for the deduction anyway? What you’re doing is commendable, but I don’t think we necessarily want to use this money to support people buying houses for investment purposes.
25 years ago we were forced to finance the guy who bought our house. I don’t remember what we did for our taxes. The statute of limitations has expired, luckily - I was young and dumb, and I wonder if I did it right.
That’s a good program also, but it adds to housing stock which is not going to help built-out towns (like mine) with tons of foreclosures (not like mine, luckily.)
The article doesn’t say if the credit covers all never occupied homes, or only new construction. If the former, the inventory around would make it unlikely that builders would have to hire anybody much. A great deal for the builders (and home buyers) but not so much for construction workers. If the latter, the builders would have to build while still having a glut of built and unoccupied homes.
Pay back? We first have to stop borrowing.
No, we bought that house last November, couple of weeks after Obama was elected. Obama’s proposal is only retro to January 1st. We did quite well anyways on the sale, which was only $70k on a 2 bed, 1.5 bath home. It coincided with my 20 year old son to get out on his own and getting a job as a chef at one of our local hospitals. Kinda just fell into place all very quickly.
The house I’m currently in escrow with is a never-lived-in model home built in 2006 that does qualify for the credit. As for existing home inventories (for sale + foreclosures), they have been steadier than new home sales. A pretty good cite for California’s economic climate in graphs.
Existing Home Inventory (California) - Decreasing since July of last year and less than 2007 levels.
Housing Starts in California - A sheer cliff that prompted the state’s decision to promote the tax credit
New Home Sales - Following in tandem with Housing Starts.
The last question explains your last concern regarding the foreclosures and unemployment of construction workers.
So, a first-time buyer buying a new home in California could receive up to $18k total in tax credits Fed ($8k) and State ($10k). If you have the good credit, you should take advantage of this opportunity. Virtually a no-brainer.
The only way people will get to spending like they did before is if the government spends and redistributes wealth to those who need it. So I’m all for the spending increase. Hell, spend more, as long as its going to people who arent already rich. Once the economy rebounds, we can worry about the debt