Obama-Limbaugh Stimulus Plan of 2009

[ParanoiA]

Just curious. How exactly would that help since it wouldn't really create any noticable manufacturing jobs within our own country? Basically, you'd be cutting a bunch of taxes so we could spend it on consumer goods from China... then, the money runs out and we still have an economy in the US that isn't growing jobs or creating new sectors.

 

Well, that analysis then presumes our economy is done growing, and is played out. I just don't believe that. And, further, seems to imply only government can direct us to growth. I think our economy is evolving and our manufacturing measurements may not be very a progessive method. I think the economy IS individuals spending their money in self interest.

 

I do believe manufacturing jobs in our own country will increase provided we have a framework for them to thrive in. People have to feel like that's a good investment for them and I'm not sure we have the right tax and regulation structure to do that.

 

People think it's all about super cheap wages in other countries, yet my company is bringing jobs back FROM India because of the terrible customer service issues. That's an example of quality trumping profit margin, probably since they believe it will lead to dwindling profits if they don't act. I think scenarios like that boost the investment domestically, which adds to the momentum of confidence in american production.

 

I'm no economist, so I certainly can't provide any meaningful play-by-play of how I think it will work out. But then, there's little alternative in my philosophy since I put more interest in freedom than economic performance.

 

Put another way (to steal some style from Pangloss), if our economy is not driven by individual pursuit of self interest, then I have little interest in the country itself. Personal freedom matters more, to me anyway.

[Pangloss]

I'm just not finding this Pangloss. My google search ain't bringin' up no historic tax relief plan. This could be entirely my fault, so could you entertain my ignorance and provide a link or something?

 

As I indicated, it's entirely my guess. It's something in the general neighborhood of $250 billion, and I just don't recall a larger tax break ever happening.

[npts2020]

Google HR 1 or American recovery and reinvestment act of 2009. I am not saying the stimulus will not work but I am saying that it doesn't seem as well focused as could be (lots of R & D and not as much use of what we already have). We are about to spend a fortune on "proving" carbon sequestration rather than on eliminating carbon emissions for example............

[Pangloss]

Here's a link to the Wikipedia article on it:

http://en.wikipedia.org/wiki/American_Recovery_and_Reinvestment_Act_of_2009

 

It contains the following rough breakdown:

 

* Tax cuts ($275 billion): Payroll tax cuts ($500 for each individual, $1000 for couples), $2500 tax credit for higher education, $7500 non-repayable tax credit for first time home buyers (for houses bought until July 1st)

 

* Education investments ($141.6 billion):

o $79 billion in state fiscal relief to prevent cutbacks to key services, including $39 billion to local school districts and public colleges and universities distributed through existing state and federal formulas, $15 billion to states as bonus grants as a reward for meeting key performance measures, and $25 billion to states for other high priority needs such as public safety and other critical services, which may include education.

o $41 billion to local school districts through Title I ($13 billion), IDEA ($13 billion), a new School Modernization and Repair Program ($14 billion), and the Education Technology program ($1 billion)

o $15.6 billion to increase the Pell Grant by $500.

o $6 billion for higher education modernization.

 

* Health care investments ($112.1 billion):

o $87 billion for a temporary increase in the Medicaid matching rate for the states

o $20 billion for health information technology, including electronic medical records to prevent medical mistakes, provide better care to patients and introduce cost-saving efficiencies.

o $4.1 billion to provide for preventative care and to evaluate the most effective healthcare treatments.

 

* Welfare/unemployment ($102 billion):

o $43 billion for unemployment benefits and job training

o $39 billion for short-term Medicaid insurance and COBRA subsidy

o $20 billion for food stamps

 

* Infrastructure investments ($90 billion):

o $31 billion to modernize federal and other public infrastructure with investments that lead to long term energy cost savings;

o $30 billion for highway construction;

o $19 billion for clean water, flood control, and environmental restoration investments;

o $10 billion for transit and rail to reduce traffic congestion and gas consumption.

 

* Energy investments ($58 billion):

o $32 billion funding for an electric smart grid

o $20 billion for renewable energy tax cuts

o $6 billion for weatherizing modest-income homes.

 

Here's a link to the actual text of the bill (yawn) at the Library of Congress.

http://thomas.loc.gov/cgi-bin/query/D?c111:2:./temp/~c111zFtQqA::

[npts2020]

Here's a link to the Wikipedia article on it:

http://en.wikipedia.org/wiki/American_Recovery_and_Reinvestment_Act_of_2009

 

It contains the following rough breakdown:

 

 

 

Here's a link to the actual text of the bill (yawn) at the Library of Congress.

http://thomas.loc.gov/cgi-bin/query/D?c111:2:./temp/~c111zFtQqA::

 

This bill is a tougher slog to read through than the Emergency Economic Stabilization Act of 2008, truly a feat in and of itself. Do you think that is done on purpose? Supposedly, better oversight will happen with this bill so far as I can tell because all of the overseer offices of whatever department will be getting more money. We shall see.....how many $100 bills will fit in a supertanker?

[bascule]

He's essentially proposing to let the republicans spend half the stimulus money their way and let the democrats spend half their way and then compare the results.

 

How do you "compare the results"? In order for this idea to seem remotely tenable I think you'd need to have a pretty myopic view of the economy. The two programs will feed back off each other in nonlinear ways, each altering the outcome of the other, in positive or negative ways. Maybe the Republicans will come up with a terrible idea which actually works in conjunction with the Democrats idea, or vice versa. Maybe the Republicans have a great idea which won't work in conjunction with the Democrats' idea. Who knows?

 

I still wonder why anyone pays any attention to Rush Limbaugh at all.

[ParanoiA]

How do you "compare the results"? In order for this idea to seem remotely tenable I think you'd need to have a pretty myopic view of the economy. The two programs will feed back off each other in nonlinear ways, each altering the outcome of the other, in positive or negative ways. Maybe the Republicans will come up with a terrible idea which actually works in conjunction with the Democrats idea, or vice versa. Maybe the Republicans have a great idea which won't work in conjunction with the Democrats' idea. Who knows?

 

Yeah, that's kind of the theory that makes me question the wisdom of a government that dashes left and right from election to election. Good ideas undermined by bad ones and the other way around. I do like the idea of a major capital gains tax cut better though. So, from my perspective, it would at least be an improvement. Just too much bailing out for my blood.

[pioneer]

The goal of the bill is to stimulate the economy and create jobs. The advantage of tax cuts is no overhead. It can happen within weeks and the money will be in the economy almost immediately. In a state of emergency it is fast with no waste.

 

The bill currently creates jobs, but many of these programs looks like things we do when the government has extra money to spend and the economy is already up and running. The emergency is in the housing market, people need to feel free to spend, banks need to loan, etc.

 

The analogy is the house is on fire. We need water and not a bunch of lemonade stands. If the house was not on fire, then lemonade stands sounds sort of refreshing. We need people with buckets manning the fire line and fighting the fire. Once the fire is out, lemonade stands will be refreshing.

 

Here is what I would do. Take the $1T and give every man, woman and child $3000 each. One can then spend their share anyway they feel. If you like one of the democratic add ons, you can give your money back to the leaders of the party and let them spend it for you. You get to feel good even if you don't get anything out of it.

 

Those who wish to spend for themselves, can also help the economy while helping themselves. If they think the banks need it, put in in a savings account. If you think Wall Street needs it, buys some stock. If you think Detroit needs it, use it as a down payment for a car.

[bascule]

Yeah, that's kind of the theory that makes me question the wisdom of a government that dashes left and right from election to election.

 

I like it. While the attitude of your "average American" (an improbable beast representing the attitudes of your median citizen) lies somewhere in the middle, I think his hypothetical disposition evolves over time, and by dashing back and forth between two extremes we can experiment with different kinds of attitudes and see what works and what doesn't in today's society, and the people can use that information to decide what they want to try next.

 

Overall it would seem developed nations are growing increasingly liberal, or maybe that's just a "European" thing.

[iNow]

Here is what I would do. Take the $1T and give every man, woman and child $3000 each. One can then spend their share anyway they feel.

Giving everyone a tax break will not build roads. It will not build bridges. It will not make broadband access available to those in rural areas. It will not prevent firefighters and policemen and women from losing their jobs, nor will it create new ones. It will not improve our schools, or put more teachers to work. It will not help local governments to pay unemployment. It will not cover healthcare in ERs, nor will it prevent ER doctors and nurses from being laid off. It will not create opportunity for smart grid electrical systems, nor will it assist in the switch off of fossil fuels and on to solar and wind.

 

A straight tax break will NOT do a lot of the things that we simply must right now.

 

 

We've had 8 years of tax cuts. The experiment failed miserably. Deal with it. It's time to do something different, as we're in bad shape, and the tax cuts only added to our problems, or at the very least, prevented us from excelling past them through smart investment. I'm open to haggling on what those smart investments are, but I'm quite tired of and frustrated by these morons who watch Fox news and think that a tax cut alone is the panacea cure for all that ails us.

[Pangloss]

Well I don't think the Bush tax cuts failed, and something like 40% of the House bill was tax cuts, and their presence in the eventual bill is likely to be even higher, so clearly even President Obama likes tax cuts. A lot.

 

But these tax cuts do operate on a very different premise from the ones undertaken during the Bush administration, and it will be interesting to see what sort of impact they have. Reduced paycheck withholding is a very rapid, direct approach, for example, and it's one that conservatives (of all varieties) cannot claim is unfair, since it only affects people who actually pay taxes. Similarly the first-time-home-buyer credit and college programs are also difficult to construe as pure welfare -- the recipient has obligations and becomes a productive member of society, contributing more to the economy in both cases. Ayn Rand may be rolling in her grave more than usual these days, but Democrats are largely doing what they said they were going to do, and if you accept the premise of a mixed economy then you pretty much have to accept the premise of a stimulus package. The devil lies only in the details.

 

That having been said, the more I consider the particulars of the $819 billion House bill the more I'm glad that it failed. Even if it was only 20% rotten, that's still a lot of dough and it's good to take our time about these things and get them right. Most of what I heard from Republicans last week was partisan nonsense (that's cute, senator -- can you tell us the one again about how you hate spending?), but there was enough of a germ of a legitimate complaint in there that it did warrant more work. I remain behind the concept of a stimulus package, however.

 

Never be afraid to make these people earn their keep, folks. It's your money.

[iNow]

I tend to agree overall with your post. Tax cuts do have a good benefit, and I was not careful enough with my words. The point I was trying to convey is that a tax cut ALONE is not going to get it done, and that people who think it will seem to have a myopic and incredibly narrow view of the economy.

 

However, one point I wasn't sure about your meaning was this:

 

That having been said, the more I consider the particulars of the $819 billion House bill the more I'm glad that it failed.

 

When did it fail, exactly? I know that no republicans voted for it, but it did, indeed, pass the House and go on to the Senate...hardly a failed outcome in terms of a bill and its passage. What did you mean? Is it possible you and I both were way too happy to throw around the descriptor "failed" last night?

[Pangloss]

Oh it passed the House, but that's what was so interesting about it -- moments after it passed it became abundantly clear to everyone involved that it wasn't going anywhere. It's an interesting case, actually, demonstrating that party unity can often fly in the face of both popular opinion and reasonable opposition. The Republicans may be behaving hypocritically and partisan-ly (erk, pardon my English), but they had reasonable points, and people agreed with them:

 

More than half of Americans say Congress should make big changes to the stimulus package or reject it altogether. And Republicans sense a chink in the new president's armor.

(source)

 

I may be going out on a limb here, but I don't think he would have signed it if it had also passed the Senate with no Republican votes. I think he would have said "that's not acceptable, I want you to rework it in such a manner as to reflect Republican concerns", and they would have done exactly that.

 

(And boy would THAT have been an interesting story. It's no mistake that Obama's approval rating is astronomical and theirs is lower than the national debt.)

 

Anyway, that's what I meant by "failed". I could have been more clear.

[iNow]

Good point. I do, however, think you may give Obama too much credit. I'm not as sure as you that he'd have rejected it without Republican votes in Senate. We may never know.

[bascule]

I don't think the Bush tax cuts [i']failed[/i]

 

Looking at this...

 

 

...I'd say they failed miserably (that's the current national debt, if you hadn't put that together already)

 

The national debt was $5.8 trillion when Bush took office. Under Bush the national debt nearly doubled.

 

something like 40% of the House bill was tax cuts, and their presence in the eventual bill is likely to be even higher, so clearly even President Obama likes tax cuts. A lot.

 

And how many of those tax cuts are there at the behest of Republicans?

 

The Republicans really seem to be one trick ponies with their "throw more tax cuts at it" approach to fixing, well, any economic problems.

[Pangloss]

Well seeing as how I just touted my own definition of "failed" I guess I can hardly fault you for having one of your own. I also agree that we should have been leveraging the economic success of most of the period of the Bush administration (you know, when Dems were telling us how that was "the worst economic crisis since the Great Depression") to do something about both the debt and the deficit. Republicans (with more than a little help from across the aisle) failed to do that.

 

Which is what makes the current litany of Republican complaints about Democratic pork so amusing. "Hey Senator McConnell, tell us the one again about how much you hate spending! HA HA HA!" <slaps knee, wipes tears from eyes>

Edited February 4, 2009 by Pangloss

[ParanoiA]

I may be going out on a limb here, but I don't think he would have signed it if it had also passed the Senate with no Republican votes. I think he would have said "that's not acceptable, I want you to rework it in such a manner as to reflect Republican concerns", and they would have done exactly that.

 

That crackling sound I think is coming from that limb you're on. I don't believe he would have done that at all - a good scolding might take place I think. And I would have been highly suspicious of his motives if it played out that way. These aren't kids playing in a sand box, even though they may act like it.

 

And how many of those tax cuts are there at the behest of Republicans?

 

The Republicans really seem to be one trick ponies with their "throw more tax cuts at it" approach to fixing' date=' well, any economic problems.[/quote']

 

Yeah, they have this weird idea that it's our money and we could do better things with it than Obama and the houses. And I agree, proudly. Investor confidence needs time and supportive structure. Lots of tax cuts and regulatory depressurizing would be nice, with a long period of leaving it the hell alone, and let the machine build momentum.

[Sisyphus]

Yeah, they have this weird idea that it's our money and we could do better things with it than Obama and the houses.

 

Well they certainly throw that rhetoric around, that's for sure. Of course, it's complete bull. Republicans have proven they're just as willing to spend our money as Democrats. Tax cuts don't mean they're not spending our money, it just means they're doing it even less responsibly (and more hypocritically). Bread and circuses, etc.

[ParanoiA]

Well they certainly throw that rhetoric around, that's for sure. Of course, it's complete bull. Republicans have proven they're just as willing to spend our money as Democrats. Tax cuts don't mean they're not spending our money, it just means they're doing it even less responsibly (and more hypocritically). Bread and circuses, etc.

 

Well of course you're right but I don't mean to defend republicans as much as I mean to defend the idea of tax cuts. The more the better, I say. But I would prefer a massive consolidation effort to shrink the government and shut down about half of what it does today. That would compliment the tax cuts and send a positive message to the private sector and really would be a change.

[bascule]

Yeah, they have this weird idea that it's our money and we could do better things with it than Obama and the houses. And I agree, proudly. Investor confidence needs time and supportive structure. Lots of tax cuts and regulatory depressurizing would be nice, with a long period of leaving it the hell alone, and let the machine build momentum.

 

You seem to be describing the prevailing attitudes and courses of action taken by the Republicans circa 2000-2006 which instigated this mess in the first place.

 

Perhaps you're confusing economics with homeopathy? We tried that. It failed... miserably. The electorate has realized how badly they failed and spoken... time for something else.

 

But I'd like to pay specific attention to this:

 

Lots of tax cuts

 

For someone who bitches and moans about the devaluation of our currency as you do why on EARTH would you support additional tax cuts? I mean, keep in mind... we're talking about an enormous SPENDING bill that Republicans are whining needs a bunch of tax cuts as riders. More tax cuts means more T-bills and foreign borrowing which means a weaker dollar. Do you support a weaker dollar?

[Pangloss]

The bill seems to be coming apart at the seams, btw, with prominent Democrats in the Senate expressing their own annoyance with all the pork today. The President unfortunately told ABC's Charlie Gibson yesterday that the House bill contained "no earmarks", which is technically true but beside the point, and then went on to agree that there were bad things in there, which no doubt confused many viewers.

 

The situation is a bit of a mess at the moment. But I think rightfully so, because it's a bad bill even in the Senate version, and this is NOT the fault of Republicans. It needs to be done right, without partisanship or ideology.

 

NOW this is turning into a good first test of the Obama Administration.

[ParanoiA]

You seem to be describing the prevailing attitudes and courses of action taken by the Republicans circa 2000-2006 which instigated this mess in the first place.

 

Perhaps you're confusing economics with homeopathy? We tried that. It failed... miserably. The electorate has realized how badly they failed and spoken... time for something else.

 

But I'd like to pay specific attention to this:

 

 

 

For someone who bitches and moans about the devaluation of our currency as you do why on EARTH would you support additional tax cuts? I mean, keep in mind... we're talking about an enormous SPENDING bill that Republicans are whining needs a bunch of tax cuts as riders. More tax cuts means more T-bills and foreign borrowing which means a weaker dollar. Do you support a weaker dollar?

 

 

No, you can't have tax cuts without a HUGE cut in spending, which I included in post 44 but apparently wasn't clear in my last response to yours. I have always advocated a low tax, low services government. Nothing has changed. I think the economy will pick up when people feel confident in participating in it - investing, buying houses, going into business etc.

 

The Bush tax cuts did not create this situation. The prevailing attitudes of low taxes did not create the mess we are in - the spend happy practices of a republican party trying to maintain an empire with a neo-con president bent on war helped create the mess we are in. Spending and expansion was the worst answer to an economy cycling down after 9/11, but it was supposedly "justified" with the war on terror.

 

The economy is not an inanimate machine that responds directly to our inputs and outputs like an engine. Rather its made up of people, as whimsical as they can be shrewd. They can undermine a tax cut and override a stimulus check when those things don't cause them to move. They can just as easily inflate the performance of a tax cut when things appear stable enough to plan and risk, leading folks to believe the tax cut saved us all. It didn't.

 

All these economic tricks do is lure folks into taking some risk, hoping for a snowball effect. We're talking about human behavior here, so sure it's always possible to prod them into moving their asses by tickling them with spending here and there, but I have no interest in growing the state, growing a dependent base with subsidies, growing manufacturing with artificial demand, increasing the budget, increasing the empire - no interest in that kind of stimulus.

 

Sure, you could take my whole damn paycheck and everyone else in the country and I'll bet you'll kick start all kinds of markets, but again, my priority is in personal freedom, not economic performance. I don't support steps in the direction of growing the state. Just like I don't support abandoning my civil liberties for better performance in preventing and fighting crime.

 

I swear, between republicans and democrats there is nobody watching our money anymore.

[Pangloss]

And this morning a new proposal from two former members of the "Gang of 14" (the article doesn't mention that but I remembered the names) proposed stripping up to $200 billion from the bill in a last-ditch attempt to bring sanity back into the discussion and remove some of the less stimulus-oriented pieces.

 

http://www.nytimes.com/2009/02/06/us/politics/06stimulus.html?hp

 

The effort is being led by two centrist senators, Ben Nelson, Democrat of Nebraska, and Susan Collins, Republican of Maine, who say they would like to pare from $50 billion to $200 billion from the package. The final Senate vote on the stimulus package is expected late on Thursday.

 

Unfortunately some of the pieces they're proposing removing involve science:

 

Among the initiatives that could be cut are $50 million for the National Endowment for the Arts, $14 million for cyber security research by the Homeland Security Department, $1 billion for the National Science Foundation, $400 million for research and prevention of sexually transmitted diseases, $850 million for Amtrak and $400 million for climate change research. But so far, none of the suggestions come close to being enough to shrink the package on the scale proposed.

 

But I believe this is the correct decision. This bill needs to be what it purports to be, not a haven for special interests and projects and ideological shifts, no matter how beneficial. The NSF will receive new funding from this administration. Just not this way.

[john5746]

But I believe this is the correct decision. This bill needs to be what it purports to be, not a haven for special interests and projects and ideological shifts, no matter how beneficial. The NSF will receive new funding from this administration. Just not this way.

 

I agree and I would think that Obama knew that the bill would not make it thru unscathed the first time - that some compromise would need to be reached. So allowing some nice pork that makes the left happy, then allowing a compromise to get rid of some of it would make the public happier than trying to wrestle the exact same bill in one move.

[bascule]

I saw something very depressing today: a man on the side of the road dressed in a Statue of Liberty costume holding up a big arrow with "STIMULUS LOANS" on it

 

Ugh