This is very humorous, coming as it does so swiftly upon the heels of the great Iraq cash giveaway.
I am reminded of stories of deathbed conversion to christianity, after a lifetime of sin.
Someone else pointed out in another thread that people’s spending habits are largely correlated to their perception of future earnings or prosperity, and I imagine being in the right mood helps too. I fully imagine with doom and gloom headlines every day and concern about their jobs, people are not rushing out and buying flat screen TVs.
I know personally that I stuck the previous stimulus check in a savings account, and if they sent out a new one as a gift card with the spending restrictions, I definitely would use it to buy the stuff I buy on a regular basis anyway, freeing up my regular income for additional savings.
Obviously a lot of people aren’t like me, because that describes my behavior in good times and bad, but if people are scared or melancholy regarding their future, I think you will see a lot more of this than you suggest.
The CBO says that 78% of the stimulus bill will pay out over the next two years.
I disagree that infrastructure improvements take a long time to get out. Things like road resurfacing and bridge painting require little in plan preparation and can be let fairly quickly, I suspect that many states have some stuff on the shelf that they could let almost immediately (since I know my state does). Sure, some major projects have some design time but then again, you provide jobs to designers who buy things and in turn create jobs for others.
Giving it in cash to the people is a big mistake. They’ll either save it, which isn’t the best idea right now, or buy something like big screen TVs which would benefit few in the US.
I don’t know why you are assuming that anyone who opposes this ‘stimulus’ bill must be a conservative Republican.
I very happily voted for Obama (and Kerry before him and Gore before him). And I still think that considering 4 BILLION DOLLARS to be ‘small potatoes’ is completely nuts.
But that estimate includes the money from tax cuts, rebates, unemployment benefits, payment to states, etc., which make up nearly half the bill. The relevant question to this thread is what percentage of the actual stimulus spending (i.e. the spending projects) will be spent in two years. My rough estimate is that it is only slightly over half. That seems too low to me. I welcome correction if that estimate is incorrect.
But painting bridges is not the kind of infrastructure spending that has the big multipliers, I don’t think.
I was about to post this very OP.
Although a lot of those provisions seem useful and necessary on their own ($500 million for flood reduction projects on the Mississippi, $600 million for federal hybrid vehicles) they have no purpose on the economic stimulus bill.
They’re probably better off in an environmental or infrastructure bill. I think the GOP is right to point them out, at the very least removing them will make the stimulus plan less of a bitter pill to swallow.
You are all forgetting that the government does not produce weath. It takes money from some people to give it to others. So, while some people may be “stimulated” by getting a new job or a better deal on their mortgage, other will be “unstimulated” by having their money confiscated by government. Government can take your money by taxing you more or by printing more money (which results in a loss of buying power due to inflation). Anything short of across the board tax cuts (not tax rebates to people who do not pay income taxes) will, in my opinion, do little to get us out of this mess.
You are forgetting that wealth isn’t zero-sum. If the government takes a little slice of the pie from everyone, it can sometimes thereby increase the overall pie through fiscal policy. You may disagree as to whether fiscal stimulus works, but that is different from the taxes are robbery argument you’re trying to apply above.
Weath is not zero sum in the private sector. It IS zero sum in the public sector by definition. The government must take from one to give to another
Note: I am not suggesting that taxes are theft by the government.
This assertion is complete nonsense. For example, by building roads and highways, the government produces valuable assets that can be used to transport people and goods. The value created can be much larger than the cost of building the infrastructure. Similarly, flood prevention or mitigation schemes can protect private property worth a lot more than the costs of the schemes, and that can indirectly produce wealth.
But the whole point of fiscal policy is that the two sectors are related. Even if you don’t receive money directly in the stimulus, you may benefit more than you lost by the increased health of the economy.
The bill is all of those. Have you not followed Obama’s statements to that effect?
Perhaps not. But it does employ some people and it certainly makes economic sense. Paint them now vs. replace them later.
Still nonsense. Apart from transfer payments, such as pensions, most of what governments do produce wealth. For example, schools take taxes, which they spend on buildings, teachers, etc. – but in the process educate students, which is a form of wealth, because that education should help the students get better jobs in the future.
But if passing the stimulus quickly is so important, why are we simultaneously trying to pass unrelated infrastructure and environmental bills? Either they are part of what needs to be passed quickly–hence the arguments on that point–or they don’t need to be passed quickly in which case they’re just bogging down the part that does need fast consideration.
Giles:
Obviously some people will not benefit by certain roads being built or by flood protection in certain areas, yet we all pay the bill. This is my point…although one community or even a large segment of the population may benefit, all must pay part of the bill. These people are, in effect, unstimulated.
How do tax cuts help?
They do not create wealth either.
However, doing things like improving infrastructure does, indeed, increase wealth, or at the very least, increases efficiency, which is often the most important thing one can do for a capitalist economy.
And while not everyone pays income tax, everyone with a job pays payroll tax.
Giles:
That’s even more nonsense. The government is taking your money and giving it back to you in the form of a service. They have produced nothing. And, people who do not have children are paying into the system but getting nothing out of it (in terms of free education).
Again, I’m not suggesting that these programs are not important but to suggest that this is somehow the creation of weath is absurd.