Economist Now Agree

[drbob]

           It is certainly true that you can nver find and issue in which all economists agree.  My friend, Rex Bell, is fond of saying that if you had three economists in a room you would have at least five opinions.  But, suddenly economic opinions are coalescing around the idea of an economic stimulus.

While economists still differ on the degree to which government should be involved in manipulating our economy, now an overwhelming number are coming to the view that a government stimulus – even a flawed one – is vital if we are to turn our economy around.  According to an article in the Washington Post, many economists are now saying that the actual shape of the stimulus matters less than that we get one and that we get it soon.   They say every moment we delay is damaging.  In the last year, we have lost a staggering 3.2 million jobs in this country and about half of that number have been lost in the past three months.  This is a deep recession and it grows deeper as Congress debates the stimulus package.

            A Bush administration economist, Alan Viard, who once said the size of a government spending bill should be "probably zero," now favors a stimulus package.  His view is that the package should be primarily tax cuts and benefits directly to the victims of the recession, but he has now come to favor a stimulus.

            The Senate has finally reached a deal with a few sensible Republicans to accept an $820 billion package, that consists of tax cuts, increases in unemployment benefits, infrastructure spending, and (I'm sorry to say) a bit of pork.  In the senate negotiations, a couple of moderate Republicans got about $100 billion whittled out of the bill.  Their efforts seem to have streamlined the bill a bit.  However, most Republicans – putting the good of the nation secondary to their political ideology – are still stonewalling the legislation.

            As President Obama has said, this bill in not perfect but the "...scale and scope of the plan is right."   The plan will create jobs.  Supporters of the plan say it will create over 4 million jobs in the coming year, which will just about break us even with the number of jobs we will have lost by the time the stimulus gets started, if it is passed soon.

            Senate Republican negotiators have been pushing for more of the stimulus to be devoted to tax cuts.  But, that may not be the best idea.  While some targeted tax cuts will be helpful,  across the board cuts will not stimulate the economy as much as direct spending by the government.  In tough times, people are more prone to save the money that might get from a tax cut.  The economy will be most stimulated when jobs are created by government spending.  A massive and quick influx of government cash in the form of spending is what will drive a recovery, if it happens. Much of the spending should be in the form of federal grants to states that in turn will initiate infrastructure spending and other job producing projects.

            We need this stimulus and we need it soon.  Republicans must put aside ideology and join America.  The election is over.  It's time to support the country.  They'll be time later to argue our ideological differences.  I don't like to say this, but I think it has come to the point where some Republican hardliners are putting their party ahead of the good of the nation.  They seem to be thinking if they give this stimulus to the Democrats and it works to turn around the economy, the Republican party will be a minority party for a long, long time.   

[Ghost of Jaco]

I think it's time for Democrats to start supporting their country and not load the stimulus package with vote-buying "pork".

As for "They'll be time later to argue our ideological differences", when "later" gets here it may very well be illegal to publicly voice opposition to the Government.

If the Republican party is marginalizing itself, it is because it has gotten away from its Conservative roots. As far as I'm concerned, anyone running for office promising to shrink the size of Government through lower taxes and cutting program for which the Government has Constitutional authority will have my vote regardless of party affiliation. 

We are in this economic mess because of legislative incompetence, why would we think they can now fix it?

[drbob]

Hi Ghost... You're correct on one thing, we got into this mess because of incompetence.  But, someone needs to fix it.  Do you have any ideas?  Doing nothing to me is not an option.  Now, it does look like we're going to get a stimulus, so let's hope it works...

By the way, the bill has some pork.  What did you expect?  These guys are after all politicians.  If you expected a perfect bill, you'll not likely get it from a legislature in a democratic system.  By the way, I'm sure you know, it is only pork when the other guy gets it.  That's why there's pork in practically every bill, we support our congresspersons when they bring the pork home. 

[Henry Hawk]

Hi Ghost... You're correct on one thing, we got into this mess because of incompetence.  But, someone needs to fix it.  Do you have any ideas?  Doing nothing to me is not an option.  Now, it does look like we're going to get a stimulus, so let's hope it works...

By the way, the bill has some pork.  What did you expect?  These guys are after all politicians.  If you expected a perfect bill, you'll not likely get it from a legislature in a democratic system.  By the way, I'm sure you know, it is only pork when the other guy gets it.  That's why there's pork in practically every bill, we support our congresspersons when they bring the pork home. 

pork is pork..........I really don't care WHO is doing it................and I'm tired of the excuse ...these guys are politicians..or it is not perfect...

I don't care if it is perfect........but, when we just dropped a $trillion to the banks, and several $billion to the Auto Industry.....I'm a little tired of spending....

WHAT IS IN THIS BILL, that is going to make us a better country as far as our economy?...............I just want someone to give me the warm fuzzy feeling......besides the "doom and gloom" if we don't pass it.

[Exterminator]

I don't care if it is perfect........but, when we just dropped a $trillion to the banks, and several $billion to the Auto Industry.....I'm a little tired of spending....

Really?  How much have your taxes been raised?

WHAT IS IN THIS BILL, that is going to make us a better country as far as our economy?...............I just want someone to give me the warm fuzzy feeling......besides the "doom and gloom" if we don't pass it.

Like your "doom and gloom" if when we do?

[Henry Hawk]

Really?  How much have your taxes been raised?

none.....YET!!

Like your "doom and gloom" if when we do?

I hope, everything is rosey when this is over...........I got two kids in college I'm paying for and three at home to feed, I don't really care to see MORE of my hard earned money going to a 18-hole frisbee course.

[Ghost of Jaco]

Hi Ghost... You're correct on one thing, we got into this mess because of incompetence.  But, someone needs to fix it.  Do you have any ideas?  Doing nothing to me is not an option.  Now, it does look like we're going to get a stimulus, so let's hope it works...

By the way, the bill has some pork.  What did you expect?  These guys are after all politicians.  If you expected a perfect bill, you'll not likely get it from a legislature in a democratic system.  By the way, I'm sure you know, it is only pork when the other guy gets it.  That's why there's pork in practically every bill, we support our congresspersons when they bring the pork home. 

"Everyone" seems to think that "spending" is the answer...why not slash tax rates for individuals and corporations? Is that not the same thing? It puts money into the hands of people who know best what they need to spend it on. That should work better than the Gov't taking money from it's citizens and throwing it at vote-buying schemes (read: pork).

[Henry Hawk]

"Everyone" seems to think that "spending" is the answer...why not slash tax rates for individuals and corporations? Is that not the same thing? It puts money into the hands of people who know best what they need to spend it on. That should work better than the Gov't taking money from it's citizens and throwing it at vote-buying schemes (read: pork).

YES, YES AND FREAKIN YES...JACKO!!!!

Let Americans spend their money NOT a bunch of idiots from washington!!! ...

[drbob]

Hey Ghost.  "Why not slash taxes?" 

Well, this bill does have substantial targeted tax cuts, I understand about 35% of the total cost.  However, you are mistaken if you think a general tax cut will stimulate the economy.  We tried that last fall.  It did not work.  In hard times, people get a tax cut, they save the money.  That does not help the economy, what works is spending and we generate spending, by putting people to work.  That's what this bill will do.  It is claimed that the bill will save or generate 3.5 million jobs.  That will almost bring us back to the level we were at last spring. 

[Henry Hawk]

Hey Ghost.  "Why not slash taxes?" 

Well, this bill does have substantial targeted tax cuts, I understand about 35% of the total cost.  However, you are mistaken if you think a general tax cut will stimulate the economy.  We tried that last fall.  It did not work.  In hard times, people get a tax cut, they save the money.  That does not help the economy, what works is spending and we generate spending, by putting people to work.  That's what this bill will do.  It is claimed that the bill will save or generate 3.5 million jobs.  That will almost bring us back to the level we were at last spring. 

What is in the Bill that will generate 3.5 million jobs?

[Ghost of Jaco]

Hey Ghost.  "Why not slash taxes?" 

Well, this bill does have substantial targeted tax cuts, I understand about 35% of the total cost.  However, you are mistaken if you think a general tax cut will stimulate the economy.  We tried that last fall.  It did not work.  In hard times, people get a tax cut, they save the money.  That does not help the economy, what works is spending and we generate spending, by putting people to work.  That's what this bill will do.  It is claimed that the bill will save or generate 3.5 million jobs.  That will almost bring us back to the level we were at last spring. 

What taxes were cut last Fall? I don't recall massive across-the-board tax cuts; and even if they were, 6 months isn't nearly enough time to determine if tax cuts have failed or not.

In what way does job creation equate to spending? Only in the sense that businesses with LOWER taxes may be able to keep employees on the payroll that would have been let go, and even hire more employees.

Finally, to turn your argument around, if the current crop of workers won't spend their money and prefer to save it (gee, maybe because they know this stimulus bill is a sham, and that the Gov't cannot help people in need of money by taking it from their children and grandchildren), wouldn't that logic also apply to the 3.5 million "new" workers?

As for people saving THEIR OWN money....MORE people SHOULD. If people saved for the things they want rather than financed them everyone would be better off and much more financially secure. Except, of course the credit card companies.
Admittedly my opinion here may be a bit biased because I have no debt. No mortgage, no credit card debt, so student loan debt, no car loan. None. Zip. Zero. Nada. I rent my house and I own two cars. I paid cash for them both. Cash that I had SAVED.

[drbob]

Hello Ghost... You are correct about practically everything your wrote... We should save more money than we do.. But respectfully that's not what our economy needs not.  We need to spend money which does create jobs.  If you purchase a car someone must make it.  If you buy a home, someone must build it.  If the government repairs a road, build a bridge, fixes the sewers in a city, people must work to do those things.  When this happens they spend money, stores need more clerks, business expand and the economy gets better.  Spending = Jobs and Jobs = a thriving economy. 

We need tax relief, we need government to get off the backs of industry and business, but not today.  First we need government to fix what it messed up.  Hopefully??? :}

[DannyBoy]

Dr. Bob..."We need the government to fix it"..........talk aboaut your oxymoron.....that's as good as the old Jumbo Shrimp

Giving people more welfare is not going to stimulate the economy.  I agree with goj, massive (temporary) tax cuts will help generate spending and job creation a lot faster than massive gov't spending.

[Exterminator]

You can't cut the taxes of people who aren't paying any because they're unemployed.

[Ghost of Jaco]

Hello Ghost... You are correct about practically everything your wrote... We should save more money than we do.. But respectfully that's not what our economy needs not.  We need to spend money which does create jobs.  If you purchase a car someone must make it.  If you buy a home, someone must build it.  If the government repairs a road, build a bridge, fixes the sewers in a city, people must work to do those things.  When this happens they spend money, stores need more clerks, business expand and the economy gets better.  Spending = Jobs and Jobs = a thriving economy. 

We need tax relief, we need government to get off the backs of industry and business, but not today.  First we need government to fix what it messed up.  Hopefully??? :}

Thanks, doc.
Consider this: The Gov't takes our money and gives it to the banks as a bailout, who then do what banks do with money (they invest it). If you or I give a bank money directly by depositing it into a savings account, the banks do exactly the same thing.
The only difference is, when you or I deposit the money, we get to choose which bank gets the money.
And, as hard as this is for some muttonheads to believe (I don't mean you), individuals know best how to spend their own money to meet their own needs.
What I hear you saying is just the opposite: "the Gov't knows best how to spend my money".

Spending. Yes, spending is certainly necessary. Once again though, I think that individuals know best how to spend their own money. The other option is to allow the Gov't to spend it for you. And as a whole, they are pi$$-poor stewards of our nation's finances, as they have demonstrated time and time again.
The fact that the "Porkulus" bill is so loaded down with useless, vote-buying CRAP (several million dollars for that massive engine of job creation, "halfway houses for abused women", for example) should clue you in that the people putting a boot on your neck are NOT going to save you.

Further, I agree that spending money needs to happen.  So the Gov't should quit taking so damn much of it so people will have more money! And that goes for businesses, too. Businesses hire when it is profitable to do so. Lowering their taxes would allow more businesses to hire more people, or increase production which would put downward pressure on prices, which would mean that people bought more. And we did agree that "spending" was the key, did we not?

Go get your last paystub. No, go ahead, I'll wait.............

Now, take a look at how much of your hard-earned money was taken from you by the Gov't. Now, imagine what you could spend that money on if they hadn't taken it from you.  A few more dinners out that week? Taken a weekend vacation, perhaps? New clothes for the kids, maybe? Now that is spending money, is it not? And the benefits trickle down: you get to better your life, and the businessman improves his profits, allowing him to keep people employed. The people employed spend THEIR money and the cycle continues. Money spent by people is a hell of a lot better than money WASTED by the Gov't on vote-buying "pork".

And if you think you could help your family with a week's-worth of your tax money in your hand rather than the Govt's...go look at your tax bill from last year and imagine what you could have done with all of THAT in your own hands! You might have started your own business: buying supplies and materials (spending), hiring employees (creating jobs) who will take their paychecks and buy the things they need and want (more spending), etc.......

So my point is that we could have all of the benefits of "spending", and make it even better, if we let the people have their own money to spend on their own needs and wants.