Democrats & Liberals Archives

Economic "Stimulus" Considerations

There are certain realities and issues that need to be recognized in our current economic “crisis” as trillions of dollars are being thrown around to try and “fix” the problem.

Unfortunately, the debate seems to be focused around rescue of one sort or another. Further, that rescue is being focused on stabilizing the system. I believe we need to step back and examine this a bit differently.

Hegemonic Capital

We are no longer living with "capitalism" per se. Instead, we are living in an era of capital. The markets are no longer solely issues of production, resources, or even service sectors. They are capital (or financial) markets. There is a difference and an important one. Markets in the old sense had at their base certain tangible things such as a tangible product, a natural resource, or labor. The financial market does not. Money is a construct, and financial markets are largely ruled by emotion and trust (and greed).

With the progression of contemporary globalization, we have moved from an environment of national (or even regional) economies and into an era of globalized capital. Underlying modern economic globalization has been the removal of "barriers" (national controls) to trade, then services, then capital. This plan was deliberate, and nations large and small have paid huge prices for its "success."

The rewriting of the General Agreement on Tariffs and Trade (GATT) shifted power from states to corporations - or corporate powers. While the initial thrust caused dramatic changes in global labor and production, the press was on very quickly to liberalize financial and investment markets. What has been created (or evolved) is a global financial environment that has no controls or controlling institutions. There is no framework in place. No fences. No protections.

The current economic crisis, which is spiralling downward at an ever faster rate, is not a U.S. crisis, or a European crisis, or an Asian crisis, or and African or South American crisis. It is a global crisis. Across the globe, nations are trying numerous strategies to stem the bleeding. None of them are working.

Why the trillions being thrown into the breach are having virtually no effect.

The creation, or evolution, to our current situation has created a global capital market without control. Nations, individually and collectively, have largely deregulated these "markets," and have looked the other way as "exotic instruments" have been created. These exotic instruments have magnified the creation of capital investments that are "vaporware", but are honored as if they had some real basis. In fact, they are less tangible than Monopoly money, but being honored by the "full faith and credit" of nations.

Now nations are literally throwing trillions of dollars into trying to stabilize a Monopoly money crisis where non-state actors have built their own printing presses. In doing this, the "real" money is rapidly becoming very similar to the Monopoly money, but it is backed by us - the people.

I am neither an economist, nor an accountant, but the issue seems pretty straight forward. We have a global derivatives market which has been created. That "market" (which is thousands of "dollars" to funny money to the penny) is estimated to be valued at more than the entire gross domestic product of the planet. That essentially means that if we took everything - all labor, all products, and all services, and threw them into the maw of the derivatives market, we would still not break even - or fill the hole that has been created.

In attempting to stabilize the financial markets (banking and investing), we (all of the nations) are throwing real money to back Monopoly money which no nation ever printed - but all nations have guaranteed.

Suggestion 1
Close the "derivatives" and related markets. Shut them down and do not honor them. Disconnect them from the economic "system." This HAS to be a global decision and action. No one nation (or small alliance of nations) can do this on its own because the "arteries" are there in every national economy. If the whole market is not closed then there will be ongoing "collateral bleeding" through international markets and connections.

I am sure there is some consequence of this action. I have no idea what it would be. However, I am sure that this is a gangrenous limb that is poisoning the "body" and needs to be removed. It is for sure that trying to "save" this limb (or make it whole) is bleeding the rest of the world dry.

The "Stimulus" Packages
Thus far, the United States and other nations have attempted to bail out the banks and investment firms (and other corporations) largely by trying to pump money into them and to take their "toxic" assets off their hands. Some of this is considered (or is) "nationalization." That has many very nervous if not outraged. In the U.S. there are loud complaints that the effort it nothing more than "socialism." Hence, the struggle (in the U.S. and I imagine elsewhere) is to have states somehow find a balance between "saving" the system while maintaining the autonomy of private capital and corporations.

TARP I, which threw more than $300 billion to banks and investment firms without any controls or even oversight, has failed. We are told that things would have been so much worse without that injection of funds, but no one is saying what we were saved from - as the crisis spirals faster out of control. Now, the Obama administration is requesting another $850 billion in stimulus with the remaining $350 billion authorized under TARP to throw into the rescue effort. While some of those requested funds are directed towards job and infrastructure, a significant portion is going straight to where the TARP funds were directed - capital markets.

What is happening, and what is continuing, is that we are seeing giant capital become behemoth capital as the entire financial market rests in the hands of fewer and fewer players. As that happens, the need to prop up these failing giants becomes ever more critical. This will not take us to economic stability - but it massively expands the power and reach of a system that created, and continues to benefit from what they created.

More and more of our "eggs" are going into fewer and fewer deteriorating baskets. The current strategy is potentially setting the world up for a collapse of almost unimaginable proportions. What we may see out of that collapse is the emergence of a "capital" world where there are a few very big interests ... and the rest of us.

Suggestion 2
Redirect the flow of public funds to community banks and credit unions. Invest in small business, and seriously consider micro-lending banks in the United States. Refinance the housing market through community financial institutions - not through Citibank.

While we are all too well aware that we are in the throws of a national and global economic crisis, it is not the only one we face. We also face resource and climate crises. What is clear from virtually all ways to approach sustainability (economic, resource, and climate) is to relocalize economies. This means building and rebuilding local economies so that money and energy "circulates" and strengthens at a local level. The converse is what we have created - generators of wealth that are siphoned off to global corporate entities.

Some might argue that this is "isolationist." However, I am not arguing for isolationism. I am arguing for more localized functioning and control of our economies. Restructured trade and investment, coming from strong communities and nations, sends the largest share of the benefits to the actual people - not to corporate entities.

I am a sociologist by trade. "Economy" within my frame of reference is the "production and distribution of goods and services." Framed another way, it is the organization of what people do on a day to day basis to survive, and how the benefits of that effort are distributed. It is more than money and finances, and it is more than capitalism or socialism.

One example (and there are many) that has received some public recognition is the 100 Mile Diet. The 100 mile diet aims at eating only from food sources and production within 100 miles of where you live. It is considered a sustainable diet that addresses critical issues. Namely, it is more "environmentally friendly" because it dramatically reduces the oil and greenhouse gas costs of transporting food for thousands of miles. However, it has other benefits. It increases security for farmers. It creates local jobs in food production and processing. It creates a safer, and more secure, food supply. We could also argue that it creates stronger social networks within those communities.

Infrastructure Issues
We have had numerous examples of infrastructural weakness (see the AASCE Report Card) in the United States. From the power grid failure in 2003, to collapsing bridges, to massive water main leaks, to crumbling sewage systems. Infrastructure has been more than ignored. In many areas it has been privatized (corporatized). Politicians don't think that infrastructure is a salable (sexy) campaign issue, and when it is in corporate hands, it is not profitable to either maintain, expand, or rebuild. Hence it falls apart. As a consequence, the U.S. infrastructure (pretty much in every area) is a big mess.

We need, and any stimulus package should, address infrastructure issues. Infrastructure is a foundation that is critical for the present and the future. However, the way we approach the infrastructure challenge will shape our nation for perhaps the next century or beyond. Do we approach it as strengthening what we have, or do we approach it with an eye to the future and what will be best long term? Almost everything aims towards acting fast - projects on the books. The argument is that this will get jobs going, and money to local communities, most quickly. Almost certainly, if we act fast we will support exiting structure and interests.

We know that the national power grid system is teetering on collapse. We know that we need to include renewable energy into the power grid. The national discussion has included building massive wind and solar farms and building power grid capacity to connect it all. It places energy companies at the hub and control of both existing and new energy infrastructure and delivery. (The oil tycoon initiated Pickens Plan for example). But we could invest in a different approach.

Instead of going big and centralized, we could go decentralized. We could have a nationwide program to upgrade existing construction for energy efficiency and production. This is happening on a small scale, where businesses and homeowners install wind and solar capacity on their own properties. It decreases their electric consumption and allows extra energy to flow back into the "grid" (where they may be paid for it). How many jobs would be created by investing in program of decentralized - versus massive construction of centralized - energy production? I believe it is likely that far more would result from decentralized. Further, for the people, there would be a benefit of decreased costs (and possible income) versus, paying to construct a new and expanded centralized system, then paying for the energy from that system.

Certainly, there is a place for centralization. I believe for example, that we really do need a national power grid. Moving to renewable energy sources creates a storage problem that is not there (in the same way) when you are dependent on metered generation - oil, coal, hydro. In other words, those sources where you can control how much electricity is generated in relationship to demand. However, decentralized production (and storage) could be handled at a city (or even regional) level.

The same could be said of technological infrastructure - which would create a different category of jobs and access. Why don't we fund communities to create and connect folks through free (or cheap) fiber-optic or broadband based connections? (I am not going to push national wifi here because I think that this may actually ultimately be found to have strong negative health and environmental issues - electronic pollution; loss of bees...). We could end the "digital divide" fairly easily. I am relatively confident that it will never end, and will continue to grow, if we leave it in the hands of corporate interests.

Suggestion 3
Include a decentralized, local economy, component to infrastructure projects.

Including funding of decentralized approaches to infrastructure would create more jobs, strengthen local economies, and return more economic benefit to the people than massive "follow the existing path" investment would.

Do we move forward, or create a bigger version of where we are?
I strongly suggest that we get a clear look at where we are, and choose a different path forward. We are looking at a huge "investment." That investment can essentially try to recover what has failed us, or it can be to place us on a new footing. It we are talking about trillions of dollars (and we have already thrown trillions at this collapse), then I think that creating a new foundation would be an excellent idea.

It will be notable to some, and a critique of more than a few, that I have not challenged capitalism as a system in these suggestions. While I think that ultimately, we need to seriously examine the ideology and structure of capitalism, I don't think we are going to even get to that discussion from our current place. I do think it is possible to shape the discussion, and to create something that is stronger and more beneficial to people and the world we share. However, this will entail shifting power (on all levels) from the hands of the few. The suggestions that I have offered are a starting place - not a destination.

Posted by Rowan Wolf at January 25, 2009 6:51 PM
Comments
Comment #274329

Rowan,
Why I do not agree with the Democrats or Republicans putting education, health, and tax cuts first in the stimulus. I do see the need to help these sectors. However, you put up a good question when you ask “Do we move forward, or create a bigger version of where we are?”

For me, it is can “We the People” educate Americas’ Democratic and Republican Civil, Political, and Religious Leaders on the benefit of going “Green” or will “We the People” allow the Ignorance of the Youth of the 60’s and Silver Spoons of the 70’s try and keep America Dependent on Foreign Oil and the Status Quo.

No, the Federal Government is the only enity that I know who has the power to build a 21st Infrastructure today. And just as our ancestors did at the turn of the last century, Americans could use the $800 billion to give Commerce and Industry the energy, roads, and other tools they will need to compete in a Global Green Market.

So, IMHO I do believe that every American needs to contact their Local, State, and Federal Elected Officials and ask them to put aside their political partys’ interest and that of special interest. For the question today is not if America can build a Green Society, but will the Children of the 21st Century have to wait another 20-40 years to reap the rewards of My Peers.

Posted by: Henry Schlatman at January 25, 2009 8:47 PM
Comment #274331

Rowan,
The local banks and credit unions have, for the most part, been successful. So far. They did not deal in the derivatives markets, and they did not pay their management millions upon millions of dollars. They are not ‘too big to fail,’ they are subject to regulation, and insulated from international finance.

On the national and international scale, corporatism and globalization have been a spectacular failure. Without the intervention of the US and other governments, the financial system would have completely failed last fall. By failing, I mean credit would have frozen. Imagine New York City after one month if no money were available, no ATM’s or registers dispensed cash, and none was available at the bank. Food riots would break out on a large scale among an armed population.

So! That didn’t happen. TARP may have failed in its larger aim- no one even pretends to have a way of dealing with the failed mulit-trillion dollar derivatives markets. For now, we’ve essentially put our hands over our ears and shouted ‘LA-LA-LA- I can’t hear you!’ The markets collapsed, and instead of counting that against the balance sheets, mark-to-market rules have been suspended. However, TARP succeeded in its more immediate aim- financial institutions are extending some credit to one another, even though they all know under ordinary circumstances, the other one is probably bankrupt.

The US government has stepped in, and guaranteed mortgages and commericial paper. Is that socialism? Well, I supposed. It happened because it had to happen. Capitalism and Corporatism and Globalization failed. Given the options of civil anarchy and mayhem, or government ownership of the means of production, there was no choice. We’re all socialists now. Oh well.

There is a proposal to form a National Bank. At this point, it is a totally sensible proposition. The private financial sector collapsed. There is no such thing as an investment bank anymore. Other large entities were taken over by the US. At this point, it would make sense to cut to the chase. Again, it happened because there was no choice.
Capitalism on a national and international basis came apart at the seams, and it was either socialism, or civil chaos and deep depression.

Posted by: phx8 at January 25, 2009 10:05 PM
Comment #274332

There is an automatic reaction to a large fiscal stimulus plan by well meaning and not so well meaning people. For the well meaning, we need to explain that the fiscal stimulus package is a last ditch effort. Nobody is getting a thrill out of spending even more deficit funds. The reason it is necessary to do so AT THIS TIME is because there is no more ammunition left to monetary policy fixes. Interest rates are at zero. About as much money as possible has been pumped into the financial sector. Thats it. The only tool left to stimulate is fiscal.
For the banks, lets stop being afraid of the “n” word. Nationalization. What we are doing now is keeping “zombie” institutions alive with the hope of federal bailouts. Let them die and the stockholders lose their investments. The depositors will be protected by the FDIC and administration would be taken over,at least temporarily, by the government until restructuring can take place. Several other democratic countries have done this in similar circumstances. This is preferable to a national banking system. The danger of a government bank is the accumulation of power in what would amount to a fourth branch of government without the constitutional checks and balances.

Posted by: bills at January 25, 2009 10:45 PM
Comment #274333

Bills,
Exactly right. Monetary policy has reached the end of its tether, and the only tool left is fiscal policy. Nationalization has already happened in the financial sector because it had to happen. We ran out of choices.

It is hard to believe…

The argument about a National Bank of the United States goes back to the beginnings of the country. The accumulation of power in a de facto fourth branch of government, without checks of balances, would be a troubling proposition. However, the Federal Reserve, which is charged with maintaining order in financial markets, has already stepped into the role. The failure of the private financial sector leaves a vacuum, and some sort of entity will have to take its place.

It’s hard to believe the nation failed that badly. Really. It’s just amazing. Having fallen so far, let’s hope we can keep from falling even farther, or better yet, start making progress with a long, long climb. We’re going to have to make a lot of changes, and the new shape of things is still hazy…

Posted by: phx8 at January 25, 2009 11:28 PM
Comment #274337

phx8

“Nationalization has already happened in the financial sector “

Not exactly. Even though the taxpayers have loaned huge chunks of money to banks that under normal circumstances would give the investors(us) total control, we have not achieved that for political reasons. Its time to stop being squeamish about nationalization, at least on a temporary basis. After all, its not like the private owners did such a bang up job.

Rowan Wolf
I hope that somebody in congress attaches a stipulation that US steel be specified in any proposed infrastructure projects at least until the US steel industry is at full capacity. Its our money and we need to get as much multiplying effect as possible. That would most likely be a violation of GATT. So sue us. If the US does not get moving all our GATT partners will wither first. The biggest alternate supplier of constuction steel is China. After the US is at capacity we should talk about floating the yuan once and for all. Again, lets get the biggest bang for the buck possible. A 3to1 multiplyer is not out of the question.

Posted by: bills at January 26, 2009 4:42 AM
Comment #274350

””“”“One example (and there are many) that has received some public recognition is the 100 Mile Diet. The 100 mile diet aims at eating only from food sources and production within 100 miles of where you live. It is considered a sustainable diet that addresses critical issues. Namely, it is more “environmentally friendly” because it dramatically reduces the oil and greenhouse gas costs of transporting food for thousands of miles. However, it has other benefits. It increases security for farmers. It creates local jobs in food production and processing. It creates a safer, and more secure, food supply. We could also argue that it creates stronger social networks within those “” I Agree with that Premise Like here in the Northeast we have farmers market’s and local grown food sources sold at parks and village squares and fairs all throughout the week in good weather and most of it is Organic and it’s very beneficial to the farmer and many folks it keeps them from being in the poverty lines and the consumer is very satisfied with the fresh wholesome fruit and vegetables and even canned products for the winter months.This i very much support and encourage and would like to see grow, Some of my reservations about the 100 mile diet is the other half of the country that requires irrigation for growth, I would be concerned about the excess use of water to meet the 100 mile diet.

Posted by: Rodney Brown at January 26, 2009 11:35 AM
Comment #274358

Rowan:

I want you to know that this is one of the finest articles I have seen here are elsewhere on the economy. Not only have you risen above the policial left verses right arguments, but you have an excellent grasp of the larger world economy issues.

You are absolutely correct on so many fronts, and I want to tweek you just a bit to get your thoughts.

Understanding that we probably needed (need) to spend some money to prevent a collapse of our financial system like in the 1930’s, if that money is taken off the table, so we are now talking about stimulating and or improving the economy, would you be for risking prolonging the recession in order to thoughtfully create a better long term economy. You talk about infrastruture spending being needed an that we want to have a bigger version of what we are, but doesn’t that take time to think it through?

I am deeply concerned about quick spending of large sums with such a short time before boomers retire. I’m very concerned about my children and grandchildren. I’m wondering if it would be better to allow the recession to take it’s course (assuming we had a firewall to prevent a 30’s crash), and carefully reform the economy so we end up on a better longterm footing.

thoughts?

Posted by: Craig Holmes at January 26, 2009 2:56 PM
Comment #274359

Craig,

I can’t speak for Rowan, but I do think there are enough infrastructure plans, in the tube, to provide plenty of initial stimulus. By ‘in the tube’, I mean those projects that states have been planning, have had many environmental studies done, and in some cases already let bids out. Most of those projects, the ones that contracts had not been let, can be started pretty quick. Several more can start with a little tweaking, and then more can follow after more serious measures are taken.

If we quit talking about tax cuts, which don’t work, and get serious on the stimulus…it will probably work. It insures payout over time and provides current jobs and economic growth…hard to beat that combination…

Posted by: Marysdude at January 26, 2009 3:25 PM
Comment #274361

I guess what I’m trying to say is…we can leave our grandkids broke and in debt with a sound infrastructure, or broke and in debt with a crumbling infrastructure…what makes more sense?

Posted by: Marysdude at January 26, 2009 3:28 PM
Comment #274362

Rowan Wolf
Excellent post. I am a proponent of locally generated necessities. Your post states what I have tried to so much more elequently and much more accurately.

I have never seen the value of spending the $4-$6 dollars a week mowing the grass in my yard. Peer pressure and local laws necessitate this worthless procedure. I often wonder why people don’t use their property to grow foodstuffs to sell on the curb. But, like I said; Peer pressure and local laws…

I was quite successfull at gardening when I was a child. And the sixty-plus employees at the textile factory next door made a very profitable customer base. The purchase and nurturing of dozens of green bell pepper plants were sold quickly even though they turned out to be red chili peppers. A union converted that textile factory into an empty shell and it has been owned by the government for most of 25 years now. Attempts to purchase this property met with resistance. I cannot begin to tell you why the government would hold onto this property for so long and with such tenacity. It could easily be converted into a local school, farmer’s market, flea market, and community center, all under one roof.

Thank you Rowan, for your post.

Posted by: Weary Willie at January 26, 2009 3:51 PM
Comment #274363

Rowan wrote; “We have a global derivatives market which has been created. That “market” (which is thousands of “dollars” to funny money to the penny) is estimated to be valued at more than the entire gross domestic product of the planet.”

Could you please explain who is doing the estimating and if correct, it could never be paid. Who owns these derivatives and how do they expect to be paid for that ownership?

Posted by: Jim M at January 26, 2009 4:26 PM
Comment #274367

Marysdude:

Infrastucture projects wont have much impact until 2010 when we should already be growing out of the recession.

Posted by: Craig Holmes at January 26, 2009 5:26 PM
Comment #274368

Jim M (and others who might be interested)
Regarding the derivatives market, I wrote an article in September 08 which addressed this:
Economic Globalization and Speculation Coming Home to Roost. However, within that article I cited two other excellent articles:
From the Justia Group - Global Derivatives Market now valued at $1.14 Quadrillion!, and from Ellen Brown as Global Research - It’s the Derivatives, Stupid! Why Fannie, Freddie, AIG had to be Bailed Out

There are certainly other articles out there, but that’s a start.

Posted by: Rowan at January 26, 2009 5:35 PM
Comment #274370

Marysdude:

Let me give you an example:

http://en.wikipedia.org/wiki/Grand_Coulee_Dam

Grand Coulee Dam was designed with some of the same thoughts you have about stimulating the economy. It didn’t work. The depression went on and on. However, Grand Coulee dam did help open up the Northwest and provides cheap hydro power to this day.

I understand that today Grand Coulee would not be built because of environmental and Native American concerns. However, I think it can be used and an example of the current goal. I’m not that huge of a believer in the global warming emergency. For the first time in 21 year here in my town I have to shovel snow from my roof, as we keep setting snow records!

I do believe we are at war with some people in the middle east and do not want to have to go there a third time!! So to create energy independence, I have no problem working out details with the “environmental wackos”, to build the Grand Coulees of the future.

I don’t think it will shorten this recession, as I think the recession will be long over when the payoff comes. I also think it needs to be well thoughtout, as I don’t see much need for haste in infratructure spending. (actually I see need for caution and thoughtfulness).

Posted by: Craig Holmes at January 26, 2009 5:47 PM
Comment #274371

Craig Holmes asked:

I am deeply concerned about quick spending of large sums with such a short time before boomers retire. I’m very concerned about my children and grandchildren. I’m wondering if it would be better to allow the recession to take it’s course (assuming we had a firewall to prevent a 30’s crash), and carefully reform the economy so we end up on a better longterm footing.

First, I am not sure that there is anything we can do to keep the recession from taking its course. This is a global economic hit, and it is not clear that any NATIONAL strategy is going to avert this going wherever it is going.

Second, the problem with watching a train wreck is that once the damage is done, some things are just beyond recovery. It is critical in my opinion to save critical infrastructure (including our manufacturing capacity such as it is), stop as much harm as possible (closure of schools, hospitals, necessary support programs), stop the massive transfer of future wealth (i.e. sale of “the commons”), and stop the human losses of collapse as far as we can.

Failure to act (and acting will cost) does not result in simple “paring” and “trimming.” Those are real people being “pared” and “trimmed.” Some will never recover. In fact some will die (and some already have).

Failure to act may also create an explosive social situation. Apparently gun sales are at an all time high. At least part of that is motivated by fear that folks will be defending themselves from their neighbors with deadly force. A frightening thought.

So there needs to be action taken and money invested to address the crisis. That does not mean that money should not be spent with an eye to the future and a better future path. Immediate stop gaps I would recommend would be 1) expansion of unemployment benefits; 2) refunding and expanding food stamps and assistance to community food programs; 3) funding of LEAP (emergency heat assistance) 4) interim funding of flagging medical facilities (loss of insurance is threatening to close the doors of medical facilities); 5) encouraging employers - particularly small employers, to keep their doors open and layoffs down; 6) fund wise infrastructure already on the books; 7) expand educational opportunity. The list could go on.

One of the problems is that MANY who are losing their jobs are not covered by unemployment insurance. Expanding unemployment benefit period is necessary, but it offers NO assistance to those uncovered. Meanwhile, those who have been out of the labor force (such as the retired) are increasingly being driven back into the labor force thereby increasing the job competition in a market that is shrinking. Building roads and bridges is not going to help (in the short term) the 20,000 folks being laid off from Catepillar, or the 5,000 let go from Microsoft. It will help the hundred’s of thousands who have been idled for most of a year by projects on hold.

There are those who are pushing for letting the chips fall where they may. I am not sure they understand what the real costs of that are. Whether that is on a personal level of sitting on a corner in -10 degree weather with your family, or whether that is the impact of neighborhoods becoming wastelands of crumbling homes and hopes; or whether it is the loss of industries that may never get back on their feet when facing global competition (the steel industry for example).

Somehow, we must protect our capacity to recover.

Long answer, and perhaps not what you were looking for.

Posted by: Rowan at January 26, 2009 6:09 PM
Comment #274372

Graig,
Why you are correct to believe that one project will not stop the current economic meltdown, putting several major projects in every city and state will produce jobs that pay at least $500.00 per week per employee. Now couple that with the profits made by the Small and Large Businesses in the area and certainly that adds up to more than any tax cut being offered by the Loyal Opposition. For if tax cuts would create jobs than over the last 8 years America should of created jobs not lost them.

No, Americas’ Infrastructure has been in bad shape for years and why it will probably take a year or two to get a dam, a school, or a road built. I do believe that the weekly paychecks spent by Labor may just save Management their jobs.

In the meantime maybe the Elite of Society can be educated on the benefits of going Green and becoming Energy Independent. However, first IMHO the Democratic and Republican Citizens and Leaders have to be taught that it is Humanly Possible to build a Sustainable Green Civilized Society. Because I doubt if you can get even Rush Limbaugh to say that he believes “We the People” should invest in building an Uncivilized World.

Posted by: Henry Schlatman at January 26, 2009 6:35 PM
Comment #274380

Craig,

Here’s the deal…Grand Coulee was a project that was started with the express reason of giving jobs, but the period of planning, and preparation was not considered.

What I am saying is that every state has projects currently in the tube, i.e., all or most of the planning has been done, and in many cases much of the preparation has been completed, the only hold up is letting the contracts. Those contracts have been held up because for a year or more state budgets have been feeling the effects of this recession.

Turning the states loose on those projects would show an immediate stimulus, and those projects that are not quite so far along now, could be ready before work on current projects is ended, and those still in a dream sequence, would be ready by the time the second group ended.

Tax cuts have been occurring for over thirty years, but without corresponding cuts in services, tax cuts just add to the deficit. This is NOT the time to cut services, because those cuts cost jobs, which is what we are trying to stimulate…whew! I’m not used to typing this much all at one time.

Posted by: Marysdude at January 26, 2009 7:27 PM
Comment #274381

Guess these guys missed the newsflashes about the big 3 heads flying into DC in their private planes…..

http://www.seeingtheforest.com/archives/2009/01/citibank_uses_t.htm

Posted by: janedoe at January 26, 2009 8:59 PM
Comment #274383

Year 1945: GDP in 2008 Dollars = $3.045 Trillon
Year 1945: Population = 140 Million
Year 2008: GDP in 2008 Dollars = $13.86 Trillion (about)
Year 2008: Population = 305 Million (about)

Is the $10.7 Trillion National Debt tenable, when it is the largest debt per-capita at $35,082 ever (61.9% larger than the previous record high of $21,719 (in 2008 Dollars) after World War II in year 1945)?

Including the $12.8 Trillion (www.socialsecurity.org/reformandyou/faqs.html#2) borrowed from Social Security, leaving it pay-as-you-go, with a 77 Million baby-boomer bubble approaching, the debt per-capita is $77,049 (3.55 times larger than the previous record high in year 1945 after World War II).

The nation-wide debt as a percentage of GDP has grown from 100% of GDP in year 1956 to over 483% of GDP in year 2008.

  • ____________ NATION-WIDE DEBT ________________
  • $70.0T |——————————————
  • $67.5T |—————————————-D (Debt=$67 Trillion)
  • $65.0T |—————————————-D
  • $62.5T |—————————————-D
  • $60.0T |—————————————-D
  • $57.5T |—————————————D-
  • $55.0T |—————————————D-
  • $52.5T |—————————————D-
  • $50.0T |—————————————D-
  • $47.5T |—————————————D-
  • $45.0T |—————————————D-
  • $42.5T |—————————————D-
  • $40.0T |————————————-D—
  • $37.5T |————————————D—-
  • $35.0T |———————————-D——
  • $32.5T |———————————-D——
  • $30.0T |———————————D——-
  • $27.5T |——————————-D———
  • $25.0T |——————————D———-
  • $22.5T |—————————-D————
  • $20.0T |—————————D————-
  • $17.5T |————————-D—————
  • $15.0T |————————D—————-
  • $12.5T |———————D——————G (GDP=$13.9T year 2007)
  • $10.0T |—————-D—————G
  • ——-
  • $07.5T |———-D————G
  • —————-
  • $05.0T |-D——-G
  • ——————————
  • $02.5T |-G
  • —————————————
  • $00.0T +(1956)————————- (2008)YEAR
Where current debt (not future debt) is:
  • (1) Total Domestic Financial Sector Debt = $15.8 Trillion
  • (2) Total Household Debt = $13.88 Trillion
  • (3) Total Business Debt = $10.16 Trillion
  • (4) Total Other Private Sector Foreign Debt = $1.8 Trillion
  • (5) Total Federal Government National Debt = $10.7 Trillion (including $3.0 Trillion foreign-owned U.S. Treasury Securities)
  • (6) Total State and Local Government Debt = $2.2 Trillion
  • __________________________________________________
  • Total = $54 Trillion (that’s 3.91 times the nation’s $13.86 Trillion GDP (i.e. GDP of year 2007)!)
  • Including the $12.8 Trillion borrowed and spent from Social Security, leaving it pay-as-you-go, with a 77 million baby boomer bubble approaching, the total is $67 Trillion! ($220,000 per person = 4.83 times the $13.86 Trillion GDP (of year 2007)!)

More people are unemployed today (11.1-to-24.6 Million) than in the Great Depression (13 Million).

Foreclosures are at record levels (10,000 per day).

Average saving rates have been negative since year 2005.

You know this stimulus BILL will most likely be full of pork-barrel.

As for taxes, why not remove the regressive nature of the current tax system?

  • ___ The Current Regressive Federal Tax System:____

  • 35% |——————————o————————————————————

  • 33% |———————-o—————o—————————————————

  • 30% |——————o—————————o——————————————= (30% total

  • 27% |—————-o————————————-o———————————- federal tax for

  • 24% |—————o————————————————o————————- secretay making $60K)

  • 21% |————-o————————————————————-o————-

  • 18% |————o————————————————————————-o-= (17.7% Warren

  • 15% |———-o——————————————————————————- Buffet’s total

  • 12% |———o——————————————————————————— federal taxes on

  • 09% |——-o———————————————————————————- $46 Million)

  • 06% |——o————————————————————————————

  • 03% |—-o————————————————————————————-

  • 00% |ooo—————————————————————————————

  • ____$0__30K__60K__90K_120K_150K_180K_210K_240K … … $GROSS INCOME …

That would have an immediate impact by leaving more money in the hands of workers.

And why not stop these 10 abuses? That would also have many immediate long-term benefits.

And there is a LOT of bloat and waste that could be cut too, allowing tens or hundreds of billions to be shifted to more productive spending.

Lots of talk about rampant borrowing, money-printing, and spending.
Yet, no really knows if the current debt is near (if not already) untenable.
If it is, how will more borrowing, money-printing, and spending make it less untenable?

The total $23.5 Trillion federal debt and the $67 Trillion nation-wide is near (if not already) untenable, and the doubling, tripling, or N-tupling the National Debt will cause inflation, and perhaps enough to trigger hyperinflation.

Also, a LOT of promises were made in the election (as usual).
There are a LOT of people asking about the stimulus checks, tax rebates, tax cuts, and help with their mortgages.
Expections are VERY high.
Setting expectation so high in an era of sense-of-entitlement, and deteriorating economic conditions may not bode well for politicians in a year or two from now (if not sooner).
Especially if economic conditions continue to deteriorate as they have been for several years; many economic conditions are now worse than ever, and/or since the Great Depression.

At any rate, the voters have the government that the voters elect (and re-elect, and re-elect, and re-elect , … , at least until that finally becomes too painful).

Posted by: d.a.n at January 26, 2009 9:33 PM
Comment #274385

Why are we discussing minute details, hoping these details will solve our problems?

It’s obvious the family isn’t responsible for this debacle. The rep/chimp/criminal isn’t either.

This country isn’t too big to fail. The last check said there’s about three-hundred-million of us. A puny amount compared to some other countries.

Much larger than others.

The simple idea we are suffering, or failing, or traitors is largely due to our ability to talk ourselves into submission.

We are a smart people, lately an agressive people. Our agression is, and has been, a good thing through-out our history.
Lately, our agression is as simple as a cat scratching at a flea. Our media has portrayed our agression as an assault on, not only the freedom of other countries, but also the freedom of our own.

A flea is a stubborn little pest. Are there too many fleas? NO! Are we going to quit scratching fleas because we are tired of scratching? NO! Are we willing to be fleas?

NO! But shouldn’t we? Shouldn’t we try to be a parasite, to understand what a parasite is before we scratch it off our body? Think about it.

Alot of people think they don’t have to participate in the American Dream. They don’t participate because their American Dream comes to them in the mail, or on a credit card right on schedule. They panic if it doesn’t.

I would prefer an independent aproach. I don’t want to be a flea, jumping onto a body.

I want to think local! I want to think windmill or hydro for my electricity. I want to think I should be able to provide for myself, instead of paying a NIPSCO for the energy I need to cook/clean/heat. I also think I shouldn’t be afraid of a knife, or a gun. I also think I shouldnt’ make my children afraid of a knife or a gun.

Posted by: Weary Willie at January 26, 2009 11:34 PM
Comment #274387
I can’t speak for Rowan, but I do think there are enough infrastructure plans, in the tube, to provide plenty of initial stimulus. By ‘in the tube’, I mean those projects that states have been planning, have had many environmental studies done, and in some cases already let bids out. Most of those projects, the ones that contracts had not been let, can be started pretty quick. Several more can start with a little tweaking, and then more can follow after more serious measures are taken.



What I am saying is that every state has projects currently in the tube, i.e., all or most of the planning has been done, and in many cases much of the preparation has been completed, the only hold up is letting the contracts. Those contracts have been held up because for a year or more state budgets have been feeling the effects of this recession.

Turning the states loose on those projects would show an immediate stimulus,


Where’s the money to come from, Marysdude? Are we supposed to give it to the federal government and then ask our state officials to beg for it back?

I just dropped my last piece of pepperoni pizza on the floor. Who should I blame? Where’s another piece of pepperoni pizza to replace the one I dropped?
Should I ask my Senator?

Posted by: Weary Willie at January 27, 2009 12:45 AM
Comment #274388

The 17th amendment gave us no other choice.

Posted by: Weary Willie at January 27, 2009 1:07 AM
Comment #274389

Weary Willie,
Why I am sorry to hear that your last piece of pizza hit the floor you should try and understand the harmonics behind the action. For if you would of picked up just a second later it may of stayed in your hand.

However, instead of calling your Senator and being charged a $1,000.00 for another slice. Try going to Foodnetwork.com and gain the knowledge of a recipe so you can make a new whole pizza.

Yes, America needs a stimulus plan, but I am not sure how you package a swift kick in the butt. However, to blame the Democratic and Republican Civil, Political, and Religious Leaders for the lack of Education of Labor and Management seems to me like blaming the Teacher for a Child getting a failing grade. For if Private Business would have learned the lessons of life over the last 30-40 years, I would think that they would have come to the same conclusion as the Children of the 21st Century. Being Self-Sufficient is a must today because you know that you are going to have to support your parents sooner or later.

Posted by: Henry Schlatman at January 27, 2009 1:11 AM
Comment #274390
Why the trillions being thrown into the breach are having virtually no effect.

I copied this title to afford myself an opportunity to comment on it. I could condense this synops into one word; “Why”.

Why “no effect”?
Because the (insert evil opposition here) knows how to cull a civilation of its value. The (insert evil opposition here) has been around longer than the most interesting professor, around much longer than the librarian, or the gas station attendent.
(insert evil opposition here) has been around, always. Carefully guiding us towards the (insert evil opposition here)’s position.

Posted by: Weary Willie at January 27, 2009 1:40 AM
Comment #274391

Every third generation something happens to this country. What’s next for us?

Posted by: Weary Willie at January 27, 2009 2:39 AM
Comment #274392

Weary Wille,
Why the Evil Opposition will always be a Parents’ worse nightmare due to the Ignorance of Man, having talked with some of My Peers Children I do not believe even the Devil, himself wants to get into a battle of wits with them and their idea of building a Better World.

No, the Youth of the 60’s and Silver Spoons of the 70’s need to go back to school and learn what their children already know. For why the so-called Adults of Society and Congress may not know that the technology exists to build a Sustainable Green Civilized Society. I can assure you that the Children of the 21st Century are more than ready for that debate.

So why the Loyal Opposition to Americas’ Recovery and Reinvestment Plan may offer you “Gloom and Doom” ask your Children and Grandchildren what they think of the Argument of Stupidity held by the Establishment created in the 70’s. Than ask yourself if you are still willing to support the Idea of MAD or invest in building a Better World.

Posted by: Henry Schlatman at January 27, 2009 2:54 AM
Comment #274393

Henry,
I get it.
Teach a man to fish and he will eat for a lifetime.

How does he pay the taxes? Does he give his fish to the government and then hope the government will give him enough fish to eat?

That phylosophy is contradictory to our way of life.
Our accepting government bailouts is surrender.

Posted by: Weary Willie at January 27, 2009 3:01 AM
Comment #274394

Weary Willie,
Why My Peers have done a good job in teaching their children to fish, I am concerned that they have forgot to teach their Democratic and Republican Civil, Political, and Religious Leaders to do the same.

For why Special Interest Groups and Sectors may look at Americas’ Recovery and Reinvestment Plan as just another spending bill. IMHO and what I have wittnessed it is a way for “We the People” to build the Society that the Youth of the 60’s and Silver Spoons of the 70’s could never find in the Enchanted Forest.

Just look at the Democrats and Republicans fight over the small change on the ground when it comes to making America Energy Independent instead of looking up at the Tree of Knowledge and seeing the Fruit of their Labor. Than ask yourself if it is Fear or Ignorance that keeps them from learning the Wisdom of Self-Sufficient.

Posted by: Henry Schlatman at January 27, 2009 3:19 AM
Comment #274395

Henry

Are my posts trying to blow smoke up tailpipes as hard as your post did?

I’ve been criticized for not making sense here.
Are we here to point fingers and lay blame?

they have forgot to teach their Democratic and Republican Civil, Political, and Religious Leaders to do the same

Who are “they”, Mr. Schlatman?

And who’s fault is it?

Our children can answer this question using public access channels on local cable/broadband.

Public access channels are under assault. Many local laws are changing towards limiting public access.

Henry, we can always take a “wait and see” attitude, but the results are already in place when the “see” is realized.

Posted by: Weary Willie at January 27, 2009 4:00 AM
Comment #274396

Craig et al
Stimulus,stimulus. Our first line of defense,private capitalization has failed. It is necessary to use fiscal policy because the firewalls and other tools available to the usual monetary approach have been used. They may have helped some but they did not do the job. We can’t cut interest rates any lower than zero. We have put as much money as possible into stabilizing the banking industry. The monetary ammo is gone. Fiscal stimulus is all that is left in the arsenal. It may or may not work. The chances of success increase directly with the size of the package.A good analogy is trying to drive a car up an icy hill. You must have momentem from the start. If not you will slide backwards and maybe wind up in a worse position. The extra danger to us in this case ,useing the same analogy, is that because of previous deficit spending we may only have the gas for one attempt left in the tank. We need to get it right the first time. BHO is risking much by including tax cuts that do little to stimulate in an apparent attempt to win Rep support. Its time to play for keeps. If the Rep leadership wants to help rescue the economy fine. If they they want to increase the chance of failure by insisting on burdening the stimulus then thats fine also.Same analogy,they want to throw a bunch of luggage in the trunk before they are willing to let it go. It can and most likely will pass without Rep support like Clintons economic plan that led to a widespread economic expansion. We don’t need them for at least two years and probably longer.

Posted by: bills at January 27, 2009 4:20 AM
Comment #274397
BHO is risking much by including tax cuts that do little to stimulate in an apparent attempt to win Rep support.
Tax cuts? Thank the Lord Almighty Rep support is still a factor.


Posted by: Weary Willie at January 27, 2009 4:34 AM
Comment #274398

Weary Willie,
Look at the Members of Congress who are yelling the most about Americas’ Recovery and Reinvestment Plan. For why Republicans are telling us that only tax cuts will create jobs, the Democrats are telling us that only by spending money on education, health, and other social programs can America pull out of this economic wreck.

However, History shows us that they are both wrong. Sure all will help keep the Status Quo in power, but none will help the average American and their family become Self-Sufficient. For if tax cuts would of created jobs than after 8 years and $2 trillion dollars America should be flushed with jobs. Yet, today we face a loss of 2 million jobs. And why Education, Health, and other Social Programs help the Rich feel good, the programs by design do nothing to help the Poor move up.

No, like Death and Taxes the need for Affordable Electricity is not going away anytime soon. And why the Democrats may want to fight over coal to meet the demands of Commerce and Industry. Seeing that a wind generator powered by an 8-20 mph wind can produce 400 kwh per month and only cost $6,500.00 I wonder if it is Fear or Ignorance that prevents Americas’ Democratic and Republican Elected Officials from promoting Saving the American Consumer, Small Bussiness Owner, and Taxpayer from the Monthly Electric Bill.

Posted by: Henry Schlatman at January 27, 2009 4:38 AM
Comment #274399

Sorry the link to Coal is http://www.nytimes.com/2009/01/27/science/earth/27coal.html?_r=1&ref=us

Posted by: Henry Schlatman at January 27, 2009 4:41 AM
Comment #274400

WW,

There are apparently two separate arguments here.

I think you are against a stimulus package.

I’m not sure about the package, but if there is to be one, I want infrastructure to be the main thrust. Tax cuts have been the mantra of the right for more than thirty years, and all it has created is higher debt. Work and production actually accomplish something needed and fills some job requirements as well.

You say don’t spend it…I say, IF you’re going to spend it…two different things.

Posted by: Marysdude at January 27, 2009 7:33 AM
Comment #274401

Marysdude,
I could not agree with you more. Imagine if our Ancestors at the turn of the last century would of not looked into the Future when cars and electricity was just a Rich Mans’ Play Toy. Would anybody have the money that they have today?

Care to see America at the turn of the next century if “We the People” think of only ourselves today and not of our Children’s Children.

Posted by: Henry Schlatman at January 27, 2009 8:23 AM
Comment #274404

Rowan excellent article. Your point on moving ahead is well taken. Unfortunately it appears at this time that our leaders are only looking at more of the same.

“Our accepting government bailouts is surrender.
Posted by: Weary Willie at January 27, 2009 03:01 AM”

WW accepting a “government bailout” is a time honored tradition of all Americans and most other parts of the world. Just since the Reagan revolution the American taxpayer has bailed out rich investors and banks 8 times and this was before Bush II. Besides when you are working for the money and the results are infrastructure that we need is it really a bail out? The private sector cannot or will not put people to work during this mini depression and remain viable. In fact the reason this stimulus is so concerning is due to the huge amount of debt left on the table by the Norquist followers with their incessant “tax cut as a resolution to all problems” approach to policy.

Posted by: j2t2 at January 27, 2009 11:08 AM
Comment #274411

Is Big Inflation Coming? http://globaleconomicanalysis.blogspot.com/2009/01/is-big-inflation-coming.html

Posted by: Rodney Brown at January 27, 2009 12:52 PM
Comment #274413

Marysdude:

On shovel ready infrastructure.

The Govenor’s say they have about $57 billion in shovel ready jobs. Not a big deal. Certainly not much of a stimulus. That is the amount that actually could help our problem. Remember if it’s not spend in the near future stimulus could turn negative in that it is inflationary.

I have no problem with spending $57 billion on shovel ready jobs. What is the other $800 billion going for?

http://seattlepi.nwsource.com/opinion/395348_shovelred.html

Posted by: Craig Holmes at January 27, 2009 1:01 PM
Comment #274415

Craig,

You are right…although there are plenty of projects that would require very little prep time, after the first batch got started, it might be too little too late. But the other items on Obama’s agenda are also job producers, i.e., education, et al. The main thing is to stay away from tax cuts as stimulus. If tax cuts worked to stimulate the economy, we’d be rolling in dough right now. The only thing tax cuts do is build more debt, with no relief for jobs. With proper spending, jobs are generated, taxes are collected and debt CAN (note: I did not say WILL) be paid down.

Posted by: Marysdude at January 27, 2009 1:12 PM
Comment #274416

Never thought I would be saying this about a
republican, But John Boehner has been making
some very imprtant points on the economic
stimulus package. First, he is questioning why there are millions, in the package for contraception, redoing the National Mall etc.
It seems the Democrats are loading the legislation with their favorite pork projects.
Not targeting the funds to quickly stimulate
the economy, and create jobs. It was my impression that Obama had smart people on his team. His pick of Geithner makes me wonder. I
voted democrat, as an independent.We can do
btter than what is going on right now.

Posted by: bob henry at January 27, 2009 1:28 PM
Comment #274417

bob henry,

While many of the social programs proposed by the House Democrats (not Obama’s people) might not fit the stimulus bill, they cannot be considered ‘pork’.

While you may not consider Geithner a good selection, he was selected for reasons other than the ‘hale fellow, well met’ selection process used to get Brown’ie’ Gonzales, Rumm’ie’, Paul’ie’, et al, that we’ve seen in the past.

If Geithner does not work out, you’ll be able to say…I told you so…

Posted by: Marysdude at January 27, 2009 2:32 PM
Comment #274427

Marysdude:

Ok, so you don’t think tax cuts will do it and infrastructure will not stimulate, so then what is the $850 billion doing to do?

Actually there are many many economist who think Obama’s proposal will not work. It is just too small of a “real” stimulus.

It does have some features that are good for birth control !!

Posted by: Craig Holmes at January 27, 2009 4:05 PM
Comment #274428

Marysdude:

While many of the social programs proposed by the House Democrats (not Obama’s people) might not fit the stimulus bill, they cannot be considered ‘pork’.

They can be considered politics as usual. In a time of national crisis, the bill needs to be clean. Adding social programs to a “stimulus bill” is simply liberals taking advantage of a crisis.

Posted by: Craig Holmes at January 27, 2009 4:58 PM
Comment #274429

Stimulus 101: What’s in the Bills http://finance.yahoo.com/banking-budgeting/article/106490/Stimulus-101-What’s-in-the-Bills

Posted by: Rodney Brown at January 27, 2009 5:40 PM
Comment #274433

Craig,

Not if the program adds a substancial number of jobs. Additional jobs is the base reason for a stimulus to begin with. Cutting taxes does NOT add jobs.

Posted by: Marysdude at January 27, 2009 6:10 PM
Comment #274438

Here’s an interesting article from the London Times.

Give us bangs for our bailout bucks
America is getting a raw deal as it pumps $700bn into shoring up its banks, argues Joseph Stiglitz

Link: http://business.timesonline.co.uk/tol/business/economics/article5594556.ece

Posted by: Jim M at January 27, 2009 7:51 PM
Comment #274439

Marysdude writes; “While many of the social programs proposed by the House Democrats (not Obama’s people) might not fit the stimulus bill, they cannot be considered ‘pork’.”

Perhaps Marysdude could identify what he considers to be pork? We all have a different view that’s for certain.

Posted by: Jim M at January 27, 2009 7:56 PM
Comment #274440

WASHINGTON – On the eve of a key vote, President Barack Obama privately promised Republicans he stands ready to accept changes in the $825 billion economic stimulus legislation, invoked Ronald Reagan to rebut conservative critics and urged lawmakers to “put politics aside” in the interest of creating jobs.
http://news.yahoo.com/s/ap/obama_economy

Posted by: Rodney Brown at January 27, 2009 8:11 PM
Comment #274446

Get ready for hyperinflaiton.

At any rate, the voters have the government that the voters elect (and re-elect, and re-elect, and re-elect , … , at least until that finally becomes too painful).

Posted by: d.a.n at January 27, 2009 9:54 PM
Comment #274449

Marysdude:

If they add jobs immediately they would be called stimulus. Otherwise it is just liberal spending. Tax cuts do add jobs. Whenever some money is spent it adds jobs. When the wealthy invest in equipment because of tax incentives someone must build that equipment that produces a job.

Tax cuts done correctly add jobs. They are just added by the private sector and not the government sector. Tax cuts add jobs.

Actually when the government takes money from the private sector and hires people it does not add net new jobs but just reallocates them. For instance when we borrow money, and that takes away capital from private industry, that takes away from industries ability to add jobs. Over time, it’s a net zero. Yes you can goose the numbers and stimulate the economy which is a good thing. But stimulus needs to be temporary. What is becoming clear is that liberals are starting to take advantage of the crisis to pass a liberal agenda.

Posted by: Craig Holmes at January 28, 2009 12:11 AM
Comment #274451

Craig, You’re right; tax cuts put money in workers’ hands and employers’ hands immediately.

However, they should only lower taxes such that they make the tax curve more flat and non-regressive. That would mean a tax cut for most middle-income Americans, and a slight tax increase for wealthy Americans.

At any rate, the voters have the government that the voters elect (and re-elect, and re-elect, and re-elect , … , at least until that finally becomes too painful).

Posted by: d.a.n at January 28, 2009 12:32 AM
Comment #274452

Criag,
Why tax cuts puts pennies in the hands of Employers and Employees and spending programs puts millions into the hands of the Upper Elite. They will do nothing to help make America Energy Independent or increase the capability of Commerce and Industry.

No, I do not agree with My Democratic and Republican ideas on how to use the $800 Billion plus to stimulate the economy. For force the Detroit Bad Boys to build our Local, State, and Federal Agencies an Electric/Natural Gas Car that reduces or eliminates their monthly fuel bill if you want a real tax cut and create real jobs.

Yes, Americans do need about $500.00 per month put into their budget; however, seeing that no tax cut is offering that deal and no new job would offer that type of pay in the current plan “We the People” would be better served if the House and Senate in Congress was lead by a National Grassroot Movement Plan that set aside the differences and focused on making America Green. Thus, why both sides lose the shack up of the Market would get those private investors to make a move.

For given the option to buy a car that gets 50 mpg or own a car that pays you to drive it. Which one would you choose for your Child to own? Shouldn’t the American Recovery and Reinvestment Plan mean that “We the People” want to fix what is wrong so that our children can have a Better World.

Posted by: Henry Schlatman at January 28, 2009 1:00 AM
Comment #274455

Craig
Liberal agenda? There was some money for Medicaid to fund family planning,birth control etc. In an effort at compromise it was taken out and will hopefully be put in another,more related bill. The provisions are actually a money saver in reduced cost for prenatal care,pregnancies etc. but no matter it should not be in a stimulus package. Also removed was $20 million to refurbish the National Mall. Personally I would have left it in as it is a jobs program and would have helped preserve and enhance a national asset, but so are the whims of politics.
Most of the Reps objections appear to be around the fact that the stimulus just doesn’t do enough to help those poor ,struggling rich people and focuses on helping Americans that actually do work for a living. Is that a liberal agenda?

Posted by: bills at January 28, 2009 5:10 AM
Comment #274456

Craig,

Tax cuts don’t add jobs…tax cuts add to China’s bottom line. We need a stimulus that we can maintain a modicum of control over. Spending directly on our infrastructure, education, health care, etc., puts the money where it STIMULATES.

Tax cuts to business gives money for mergers, buyouts, outsourcing, and building plants on foreign soil. Tax cuts for those still employed gives money to Wal-Mart for further purchases of Chinese products, and tax cuts have no benefit to the unemployed at all…you can’t pay taxes to realize the cut if you are not working. Tax cuts slow the inevitable total meltdown. A stimulus, well placed, might just save us from total annihilation.

Tax cuts are a slow death, kinda like trying to commit suicide by shooting yourself in the gut with bird shot. Not very stimulating, that…

Posted by: Marysdude at January 28, 2009 6:33 AM
Comment #274457

>Most of the Reps objections appear to be around the fact that the stimulus just doesn’t do enough to help those poor ,struggling rich people and focuses on helping Americans that actually do work for a living. Is that a liberal agenda?
Posted by: bills at January 28, 2009 05:10 AM

bills,

The answer to your question in a nutshell…yes…and I sure hope it remains in the liberal agenda, for without it, we’d be considered conservative…;)

Posted by: Marysdude at January 28, 2009 6:37 AM
Comment #274461

The question I have is where are the calls from the Democrats for a 1993 styled package? Increase of the captial gains rate, individual rates, fuel taxes, and an increase in corporate taxes. Wasn’t that the prescription that worked in the 90’s? It would be nice to see someone stand up to the this from the left as well as from the right.

Because this stimulus funding is debt, aren’t we just taking money from the deep end and pouring it over the steps of the shallow end?

Posted by: George at January 28, 2009 10:14 AM
Comment #274464

So was Legislation to dismantle the current tax code and replace it with a simple, 17 percent flat tax was the war cry of Armey and Archer in the 1990s And Term Limits.

Posted by: Rodney Brown at January 28, 2009 12:14 PM
Comment #274465

George,

See post # 274456 above…tax cuts actually add more to the debt than spending when in a recession.

Posted by: Marysdude at January 28, 2009 1:05 PM
Comment #274469

Marysdude:

Here is a quote from Obama’s economics advisor that directly contradicts your thoughts on tax cuts:

Christina Romer, the new head of the Council of Economic Advisers, coauthored a paper in which the following was written about taxes: “Tax increases appear to have a very large, sustained, and highly significant negative impact on output. Since most of our exogenous tax changes are in fact reductions, the more intuitive way to express this result is that tax cuts have very large and persistent positive output effects.”
Posted by: Craig Holmes at January 28, 2009 2:26 PM
Comment #274470

Walter E. Williams, professor of economics at George Mason University in Fairfax, Va., is currently the John M. Olin Distinguished Professor of Economics. A favorite writer of mine, he has some potent words of wisdom about the so-called stimulus plan currently being proposed by PO and the democrat congress.

“Here is what my George Mason University colleague Professor Richard Wagner wrote, which was published by Office of the House Republican Leader: “Any so-called stimulus program is a ruse. The government can increase its spending only by reducing private spending equivalently. Whether government finances its added spending by increasing taxes, by borrowing, or by inflating the currency, the added spending will be offset by reduced private spending. Furthermore, private spending is generally more efficient than the government spending that would replace it because people act more carefully when they spend their own money than when they spend other people’s money.” A short translation of Wagner’s comment is: There is no Santa Claus or Tooth Fairy.”

“Suppose the value of all that we will produce in 2009, our gross domestic product (GDP), totals $14 trillion. There cannot be any disagreement that if Congress spends $4 trillion, of necessity there is only $10 trillion left over for us to spend privately. In other words, if Congress is going to spend $4 trillion, it must find a way to get us to spend $4 trillion less. The most open and aboveboard method to force us to spend less privately is to tax us to the tune of $4 trillion.

You might say, “Congress doesn’t have to tax us $4 trillion. They could tax us $3 trillion and run a $1 trillion budget deficit.” You have that wrong. There is no way for Congress to spend $4 trillion out of our 2009 $14 trillion GDP by getting us to spend only $3 trillion less privately. It has to be $4 trillion less. Another method to force us to spend less privately is to print money and inflate the currency. Rising prices reduce our ability to spend privately since each dollar we hold will not buy as much. Another way is for Congress to borrow, thereby reducing our ability to spend privately. By the way, all of this means that in any real economic sense the federal budget is always balanced. That is, if Congress spends $4 trillion we must privately spend $4 trillion less whether it is accomplished through taxation, inflation or borrowing.

The stimulus package being discussed is politically smart but economically stupid. It’s that bedeviling, omnipresent Santa Claus and Tooth Fairy problem again.”

Posted by: Jim M at January 28, 2009 2:35 PM
Comment #274473

Year 1945: Federal National Debt in 2008 Dollars = $3.045 Trillon;
Year 1945: Population = 140 Million;
Year 1945: National Debt-per-capita in 2008 Dollars = $21,719 (record high as of year 1945);
Year 1945: GDP = $2.633 Trillion in 2008 Dollars;
Year 1945: National Debt-to-GDP = 116% (record high as of year 1945);
Year 1945: Total nation-wide debt-to-GDP = ???% ; even if 200%, it is far less than the 483% of year 2008;
Year 1956: Total nation-wide debt-to-GDP = 100% ;

Year 2008: Federal National Debt in 2008 Dollars = $10.7 Trillion (about);
Year 2008: GDP in 2008 Dollars = $13.86 Trillion (about);
Year 2008: Population = 305 Million (about);
Year 2008: $10.7 Trillion Federal Debt-per-capita in 2008 Dollars = $35,082 (61.9% higher than in year 1945);
Year 2008: $10.7 Trillion National Debt-to-GDP = 77%
Year 2008: Total Federal National Debt in 2008 Dollars (including $12.8 Trillion borrowed from Social Security) = $23.5 Trillion (about);
Year 2008: $23.5 Trillion Total Federal Debt-per-capita in 2008 Dollars = $77,049 (new record high of 355% higher more than $21,719 in year 1945);
Year 2008: $23.5 Trillion Total Federal Debt Debt-to-GDP = 170% (new record high);
Year 2008: Total $67 Trillion (One-Simple-Idea.com/DebtAndMoney.htm#NationWideDebt) nation-wide debt-to-GDP = 483% (new record high; many times the 100% of nation-wide debt-to-GDP in year 1956);

Where will all of this money come from, and why does it seem many are ignoring the inevitable inflation (year-to-year) inflation that will result?:

  • ____INFLATION RATE_____

  • 4.00%|———————-

  • 3.75%|——————xxx (3.85% average for year 2008)

  • 3.50%|——————x—

  • 3.25%|————xxx-x—

  • 3.00%|————x-xxx—

  • 2.75%|——xxx-x———

  • 2.50%|——x-xxx———

  • 2.25%|—xxx—————

  • 2.00%|—x——————

  • 1.70%|—x——————

  • 1.50%|xxx——————

  • 1.25%|———————-

  • 1.00%|———————-

  • 0.75%|———————-

  • 0.50%|———————-

  • 0.25%|———————-

  • 0.00%|__________________YEAR

  • _____ 2_2_2_2_2_2_2

  • _____ 0_0_0_0_0_0_0

  • _____ 0_0_0_0_0_0_0

  • _____ 2_3_4_5_6_7_8

    • 2002=1.59%
    • 2003=2.27%

    • 2004=2.68%

    • 2005=3.39%

    • 2006=3.24%

    • 2007=2.85%

    • 2008=3.85%

    • 2009=??.?? Double-Digit ? ? ?

We’ve already have 52 consecutive years of inflation, which is why a 1950 Dollar is worth only 10 cents. What will happen if the money supply (M3 Money Supply = $135 Billion in year 1950; M3 Money Supply = $10.15 Trillion in year 2005) is doubled, tripled, or quintupled? What if inflation triggers the dumping/spending of another $11 Trillion in foreign-owned U.S. Dollars?


How much debt can we carry before it becomes untenable?
No one seems to know, yet we seem determined to find out (the hard way).

At any rate, the voters have the government that the voters elect (and re-elect, and re-elect, and re-elect , … , at least until that finally becomes too painful).

Posted by: d.a.n at January 28, 2009 3:17 PM
Comment #274475
Jim M wrote: That is, if Congress spends $4 trillion we must privately spend $4 trillion less whether it is accomplished through taxation, inflation or borrowing.
Unless the money is created out of thin air? That is quite likely since it will be difficult to borrow so much money from foreign nations growing increasingly nervous about throwing money into a blackhole.

That will create more inflation.

  • Inflation: Consumer Price Index (CPI=100 for year 1967)

  • 700 |———————————-o (=665: JAN-2008)

  • 650 |———————————o-

  • 600 |———————————o-

  • 550 |———————————o-

  • 500 |——————————-o—

  • 450 |——————————-o—

  • 400 |——————————-o—

  • 350 |——————————o—-

  • 300 |—————————-o——

  • 250 |—————————-o——

  • 200 |—————————o——-

  • 150 |—————————o——-

  • 100 |————————-o———

  • 050 |o-o-o-o-o-o-o-o————-

  • 000 +(1800)—————(2008)YEAR

The Federal Reserve (in the last few months) has already pumped $3.2-to-$8.5 Trillion into the banks and Wall Street.

At any rate, the voters have the government that the voters elect (and re-elect, and re-elect, and re-elect , … , at least until that finally becomes too painful).

Posted by: d.a.n at January 28, 2009 3:28 PM
Comment #274477

2002=1.59%
2003=2.27%

2004=2.68%

2005=3.39%

2006=3.24%

2007=2.85%

2008=3.85%

Right :) or Wrong :(

Posted by: Rodney Brown at January 28, 2009 4:29 PM
Comment #274478

Quotes from today’s NY Times. Very interesting. PO correctly stated the answer to our current financial woes in the first paragraph but apparently doesn’t believe his own words. The stimulus should go to American companies and workers and not to the pigs looking for pork and to enable more liberal social engineering. PO is proving that he speaks with a forked tongue.

“The future of the American economy rests less in his hands than it does “with American companies and workers,” Mr. Obama said.

“They are the ones whose efforts and ideas will determine our economic destiny, just as they always have,” the president said. “For in the end, it’s businesses, large and small, that generate the jobs, provide the salaries and serve as the foundation on which the American people’s lives and dreams depend.”

“Despite the Democrats’ advantage in the House, Representative John A. Boehner of Ohio, the Republican minority leader, seemed unwilling to concede defeat. Many Republicans are worried about billions in domestic spending on programs that have “nothing to do with creating jobs or preserving jobs,” Mr. Boehner said in ABC’s “Good Morning America.”

Moreover, the Senate’s Republican minority leader, Mitch McConnell of Kentucky, has said that he and his colleagues will seek changes in whatever package comes over from the House.”

PO knows that he has the votes in congress to pass any bill he approves and just pays lip service to the concerns of conservatives. In my opinion, democrats and PO only want Republican approval so when the plan fails, as it surely will, the fault can be shared. I encourage our conservative members of congress to distance themselves from this thinly disguised plan to pander for votes with taxpayer money. Let the liberals have all the credit for this dishonorable and disgusting display of disregard for America’s needs.

Congress should first pass a bill reducing wasteful government spending that is rampant and show American’s that they are willing to make a sacrifice before they ask taxpayers to make another huge sacrifice in paying for new spending.

Of course congress will never call for sacrifice if it will cost them a vote. Folks, this stimulus plan is all about politics and votes and is an embarrassment to any thinking and caring American. I am disgusted with our new president and his willing co-conspirators in congress.

Posted by: Jim M at January 28, 2009 4:41 PM
Comment #274514

Jim M.,
Why you can say that the House version of Americas’ Recovery and Reinvestment Plan has its flaws. Given the voice of the Loyal Opposition (Republicans)this past month I have to say it is better than anything that they have proposed.

Yes, I do not agree with the Bill in its current form; however, as an Independent Layman I can only have a Person Opinion about the plan. So as I work to voice that PO to our Democratic and Republican Citizens and Leaders in hope to educate them on the benefits of letting the Children of the 21st Century build a Sustainable Green Civilized Society I realize that given their Limited Knowledge and Political Thinking that something has to be done to keep the Rich from losing all of their money.

So why the Conservatives believe that giving more tax cuts will create jobs and build Wealth and the Liberals believe that through increasing spending on Social Programs such as Education and Health will help the economy grow. I will continue to fight both over the Ignorance of Man not to understand that unless “We the People” invest in Americas’ Infrastructure and Transportation System to break Americas’ Dependence on Foreign Oil than no amount of funding will grow Americas’ Economy.

Posted by: Henry Schlatman at January 29, 2009 5:42 AM
Comment #274521

“”I will continue to fight both over the Ignorance of Man not to understand that unless “We the People” invest in Americas’ Infrastructure and Transportation System to break Americas’ Dependence on Foreign Oil than no amount of funding will grow Americas’ Economy. “”” well Spoken Henry, I would have Liked to seen more Funds Going to Infrastructure and Transportation Myself, I hope they applied some of those funds to use solar Lighting and Other forms of Geeen Technology.

Posted by: Rodney Brown at January 29, 2009 11:20 AM
Comment #274523

Awk! Green Technology !

Posted by: Rodney Brown at January 29, 2009 11:24 AM
Comment #274525

Henry, I appreciate your thoughtful comments. As a conservative I am not opposed to education, health care, or becoming independent in our energy needs.

Where we differ is in the belief that every young person is college material. Studies have shown that many college grads would have been much better served by pursuing a career in one of the trades or some other technical training rather than going deep in debt to earn a college degree and then find no jobs await them.

Health care as proposed in this spending bill is obscene. While I have not memorized the details, what I do recall is that it provides Medicaid to families earning up to $100K and so called children who are in their 30’s. This is just a thinly disguised attempt to take us one step closer to national health care which I believe is unaffordable and unnecessary. Take a look at the plan that is working well in Mass. as a guideline of what may work well in other states without adding another huge failed federal social program.

Conservatives do not oppose seeking new forms of green energy but understand that we will require fossil fuel energy for decades to come and it is plainly stupid to not drill for and use our own resources rather than transfer more wealth to foreign countries that many times use the revenue to foster terrorism around the world.

Private companies given incentives are perfectly capable and willing to work at developing green energy. Government should be involved in ways that promote private development, not another huge bureaucracy.

Posted by: Jim M at January 29, 2009 11:31 AM
Comment #274539

Jim M,
Why a College Education has been given a higher status in our society over the last 30 years has to do more with Social Engineering than the quality of Knowledge and Wisdom that they are taught by so-called Professors. For if a student in school challenges the beliefs of their teachers limited knowledge on a subject or the material they are failed because of not conforming to the Status Quo. In fact, a good example of this can be found by the student who started Fed-Ex. After recieving a “C” by his Professor and saying it would never work, the student went and started the business using the same plan and today is worth millions. So, does education matter or does a Professor or Higher Learning fail because they are stuck in the past.

Yes, I agree that not everybody needs to go to college in order to grasp what has to be done in order to get a job done; however, until the pay between someone with a piece of paper who cannot do the job is less than a High School Graduate who can than the Status Quo wins. Besides, I do believe that the thinking of My Community Elders and Peers in the 70’s was that College would help build social skills and specialized training needed by Commerce and Industry.

And why I am glad to hear most Conservatives do not oppose Green Energy, I do believe that they have fasle knowledge that fossil fuel is required for the next several decades to meet the demands of industry and transportation. For why jobs in those fields and the fall of foreign nations hang on that belief. Did you know that through investment in Electric Cars over the next 10 years that America could bankrupt OPEC? And solar furnances could replace blasting furnances that now use coal and oil. So, why fossil fuel is needed for certain application the same way that Whale Oil is still used even a 100 years later. Considering that the technology exists today to allow America to stop burning fossil fuel, I do believe that the answer is not should we drill our own resources, but how can “We the People” use those limited resources in the most responsible manner.

Thus, until Private Business like the Government is educated on the benefits of using Green Energy and building a Sustainable Green Civilized Society than saying that it is more cost effective to maintain the Staus Quo than invest in the Change makes sense. And IMHO that is like the professors of today wanting to keep the same material that has been taught over the last 500 years than embrassing what has been discovered over the last 30 years by their own hands and Students.

Posted by: Henry Schlatman at January 29, 2009 4:30 PM
Comment #274550

Jim M.”Where we differ is in the belief that every young person is college material. Studies have shown that many college grads would have been much better served by pursuing a career in one of the trades or some other technical training rather than going deep in debt to earn a college degree and then find no jobs await them.”

From Yahoo “The survey found that adults 18 and older with a bachelor’s degree earned an average of $51,554 in 2004, compared to $28,645 for those with only a high school diploma.”

http://money.cnn.com/2006/10/25/pf/college/census_degree/index.htm

Jim M. “Take a look at the plan that is working well in Mass. as a guideline of what may work well in other states without adding another huge failed federal social program.”

“Although advocates of the Massachusetts plan claimed that it would lower health care costs and achieve universal coverage, it has done neither. Instead, the plan has increased costs for individuals and the state, reduced revenues for doctors and hospitals, and left Massachusetts officials in the awkward position of having to admit that their “universal coverage is not likely to be universal any time soon.”14”

http://www.theobjectivestandard.com/issues/2008-fall/mandatory-health-insurance.asp

Jim M.”Conservatives do not oppose seeking new forms of green energy but understand that we will require fossil fuel energy for decades to come and it is plainly stupid to not drill for and use our own resources rather than transfer more wealth to foreign countries that many times use the revenue to foster terrorism around the world.”


“McCain Missed Opportunity To End Big Oil Tax Breaks to Invest in Clean Energy. In 2007, McCain was the only senator who failed to vote on a motion to invoke cloture (thus limiting debate) on the Energy Independence and Security Act. This vote was about whether to close $13 billion in tax breaks for major oil and gas companies to invest in new clean energy technologies such as wind and solar, and efficiency. Sixty votes were required for passage. The motion was rejected 59-40. [CQ.com; HR 6, Vote #425,”

http://www.americanprogressaction.org/issues/2008/mccain_gw_record.html

Posted by: j2t2 at January 29, 2009 6:52 PM
Comment #274559

>Here is a quote from Obama’s economics advisor that directly contradicts your thoughts on tax cuts:
Christina Romer, the new head of the Council of Economic Advisers, coauthored a paper in which the following was written about taxes: “Tax increases appear to have a very large, sustained, and highly significant negative impact on output. Since most of our exogenous tax changes are in fact reductions, the more intuitive way to express this result is that tax cuts have very large and persistent positive output effects.”
Posted by: Craig Holmes at January 28, 2009 02:26 PM

Craig,

If you are a proponent of ‘no stimulus’, your cite here might mean something. But, if you believe that something must be done to stimulate the economy, this cite means nothing. She wrote this during a time of normal economic flux. It cannot and does not have anything to do with the current situation. Tax cuts right now will exacerbate our financial melt-down, not help us out of it. There is no control over what happens to the money when taxes are cut. Every break businesses have gotten in the last thirty years, i.e., unions folding or capitulating, tax cuts, government relief or subsidy programs, have come back to bite us in the butt. Those monies were spent more for outsourcing, overseas manufacturing, goods importing, etc., than in giving jobs to Americans or modernizing factories, or…blah…blah…blah…

A stimulus is not business as usual, a stimulus is shooting up with a good drug…it needs to actually stimulate, or it is wasted effort. Tax cuts…bah!

Obama is giving tax cuts too much attention now because of the obstructionists on the right, and it may cause this stimulus package to fail. More money fed into infrastructure, i.e., communications, overloaded sewer systems, water works, levees, and bridges could work wonders. That 300+ billion dedicated to tax cuts should be diverted into those things I’ve listed…now, THAT would stimulate.

Posted by: Marysdude at January 29, 2009 10:28 PM
Comment #274659

After reviewing HR-1 the economic stimulus, I
could not take any more so if you agree….

I think Pelosi and Reid should go along with pork and
corporate lobbyists…so I started a petition if you agree sign it!
visit GoPetition and sign to get rid of Pelosi and Reid
http://www.gopetition.com/online/24937.html

Posted by: Bobhenry at January 31, 2009 6:03 AM
Comment #274703

Rowan,

Excellent article, also read Paul seigels article
save the borrower. The conclusion “Dump the monopoly money makers and go back to what works”

Posted by: bobhenry at January 31, 2009 9:40 PM
Comment #275456

I’m so confused. The dictionary definition of economics says that it’s the production, distribution and use (or consumption) of wealth. So there’s the growth of wheat in the field, then the harvest, then hauling it for processing into bread, more hauling it to the market where it’s taken up by someone who needs food. Where does money come in?
Could it be that money is the main tool of the power structure to make everybody nervous all of the time? Is it somehow possible that consumption fuels production? If we aren’t allowed to have money then how does business expect to make a sale?

Posted by: Stephen Hines at February 12, 2009 9:01 PM
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