It sounds like I should know the differences between a stimulus plan and a bailout but I have thought about it and really I don’t know the real difference. I am assuming there is more than semantics involved here.
My assumtion and what I have found on the internet searching is that:
stimulus is tax relief/refunds and government infrastructure building
bailout is loans to businesses.
But it appears there is some “help” (I read that as loans) for businesses in this stimulus package. So what is the true difference between a stimulus and a bailout or do they just basically mean the same thing?
Well, there could be some overlap in practice, but in theory:
The ‘bailout’ is to keep some big banks from going bankrupt and shutting down. The idea is that if these giant banks go out of business messily, then our financial system will also shut down (or slow down drastically), with horrible effects on regular businesses, customers, etc.
The ‘stimulus’ is general government spending. The idea is that, quite apart from particular problems with banks, the general economy is in a recession; most economists agree that government spending will give the economy a push and help it get cranked back up again (at which point, the government can collect more taxes to pay for the stimulus, which will help slow down the economy and prevent it from going too fast).
There’s agreement among economists on generally what kinds of government spending are best at pushing the economy, but much argument over details (and of course politicians tend to favor certain kinds of spending/tax cuts regardless of what impartial economists say. )
I’m trying not to be snarky here (moderators, feel free to beat up on me if I come across that way), but IMHO the two terms are often used to describe the same action based on the attitude of the narrator.
IE, if you’re helping my firm get itself out of a bad situation caused by other folks, you’re giving me a stimulus. If you’re helping my competitor’s firm get out of a situation that was obviously caused by his own incompetence, it’s a bailout.
I am so confused. An AP poll said that 58% of the populace was apposed, 23% were in favor & the rest were undecided to the bill that just passed.
With such underwhelming support what was the rush to pass this bill?
I would say that this might almost be backwards. Bailouts might or might not be loans that need to be repaid. Stimulus is spending money, it’s not a loan and it never needs to be repaid.
To elaborate a little further, based on my own understanding:
Both of these are about ‘domino effects’ in the economy. Both good economic activity, (spending money, people and companies prospering, generating value,) and the lack of it, can appear to have spreading domino effects.
Stimulus is the attempt to start a good domino run. Theoretically, if you just start spending money, then the people who get that money will spend it, and so on and so forth. It doesn’t ‘really matter’ (supposedly) where the money is spent to start the domino effect off, and it’s usually not targeted to a sector where the economy is very bad, or that badness might kill the stimulus before it really gets going. It isn’t something that is to be ‘paid back’ directly, though government stimulus ideally comes back in the form of taxes paid by the stimulated economy.
Bailout is the attempt to squelch a bad domino run before it really gets started. If there’s a bit company that is seriously about to go bankrupt, then when its employees go out of work and its creditors have to take losses, more dominos might ‘topple over in a bad way.’ This can be considered to be a loan, paid back at such a time that the threatened company can pay without danger to itself. It’s still bailing them out of immediate danger, not stimulating the economy more generally.
Not sure I saw it on the Trib site or someplace on Monday or Tuesday. I don’t remember for sure where I saw it. But I am fairly certain it was an AP.
I really don’t see how anybody could believe that government involement in anything can make it better given their track record over the years. They’ve done wonders for Social Security, Schools, child discipline & everything else they’ve touched that they shouldn’t have.
Not sure I saw it on the Trib site or someplace on Monday or Tuesday. I don’t remember for sure where I saw it. But I am fairly certain it was an AP.
I really don’t see how anybody could believe that government involement in anything can make it better given their track record over the years. They’ve done wonders for Social Security, Schools, child discipline & everything else they’ve touched that they shouldn’t have.
Americans are skeptical that an economic stimulus plan from the federal government will help the nation’s economy. This is perhaps due to the fact that most people think that the elected officials in Washington working on the plan are part of the economic problem as opposed to the solution.
Less than half (45 percent) of Americans think “Barack Obama’s proposed $825 billion dollar economic recovery plan” will help the economy. Twenty-nine percent think the plan will not make a difference, while 18 percent think it will hurt the economy. Democrats (63 percent) are much more likely than independents (43 percent) or Republicans (22 percent) to think the recovery plan will help.
Considering opinions regarding politicians involvement in the economy, it is somewhat surprising that as many as 45 percent of Americans think a plan out of Washington will help the nation’s economy.
Just 27 percent of Americans think elected officials in Washington are part of the solution when it comes to improving the economy, while 61 percent think they are part of the problem. Republicans (75 percent) and independents (66 percent) are more likely than Democrats (46 percent) to think politicians are part of the problem.
Must have been a REpublican poll I saw - the numbers would match or it could have been a poll outsdie the cities where people tend to be more conservative and not many were dumb enough to take out loans they could not afford. That was mainly an urban problem
Not many condos in the country. We consider the burbs part of the city. If you can’t tell when you leave on town and enter the next, it’s a city, If there isn’t at least 3 miles of lightly populated space seperating the towns more than likely you’re getting into the city. If it has more than 6 stop lights it’s a city. If they eat lunch at noon and dinner in the eavening as apposed to lunch at 9 am, dinner at noon and supper in the eavening it’s probably the city. If you are not allowed to walk out your door and shoot your gun it’s a city. If you are not allowed to have a chicken in your yard it’s a city. If there is a condo with more than 2 attached units in the area You are definately in the city.