How can you borrow your way out of debt?The problem is people spending more than they make.This plan will only make things worse.For over 2 years the gov. has thrown money at this problem and things only have gotten worse,more money isn’t the answer,spending less is.
A stimlus heavily weighted toward infrastructure makes a lot of sense. We have been neglecting our roads for years, and there is an opportunity here to correct that and help the economy. Very conservative economists will tell you that for every dollar spent on infrastructure construction, that multiplies by 1.7 on GDP, as opposed to rebates that are around 1.05 for a multiplier.
The right way to do an infrastructure stimulus is to send the money to the states, with the condition that it go to accelerating construction of projects already in their five year plan, and the state cannot use the federal dollars to replace state dollars.
I do agree witrh a possible additional stimulus to the consumer. However, it cannot be across the board it must be generated to those at the middle and lower income levels. Additionally, how do we stimulate not only the consumer but the financial institutions at the same time. It would be through the housing case if the Feds had looked at the bailout in another way ie; 7ooB should have gone to the consumer struggling in bad mortgages with stipulation of utilizing the funds to repay bad mortgages everyone would have made out. Give the money to the people with strict guidelines to utilize it for saving not only them selves but the American way of life it’s economic superiority.
I’m starting to really regret leaving Pasadena, CA 5 years ago (motivated in large part by what I felt then was unsustainable house prices). If I would have just gone for it I would have made $700,000 (It will take me decades to save up that much with my engineering PhD, and oh the self discipline that will take.) and now it is looking like the government is heck bent on propping up the house prices near where they are now. What was I thinking? (WHY was I thinking!?!?)
Talk about the fish that got away. Only as a taxpayer, I will still get to pay for that fish for the rest of my life. I am really frustrated.
This is the problem with Congress, they have a spending spree problem. Someone take the credit card away from Nancy Pelosi. Sad that 50% of Americans don’t know that democrats already control the House and Senate with a 9% approval rating, yet Republicans are going to be punished in the election?
No Stimulus Nancy Pelosi, your spending is what got America in this trouble. Try to stop wasting our tax dollars and see how that affects the value of the dollar.
This is why we need McCain.
Ben Bernanke has already castrated a second stimulus, so implementing it would have but one key effect, driving up the debt of the USA, thereby reinforcing the grip of COMMUNIST, SOCIALIST China on the USA, since China is America’s cash sugar daddy: McCain and Palin won’t say it, but the USA is dangerously dependent on commandeered savings from a communist, socialist country, China.
Back to Bernanke and the last interest rate cut: Look at the scenario around this totally unnecessary move. The interest rate was cut, and the brats on Wall Street went wild with glee, having got yet another of their demands. But, out in the real world, where ordinary people live, the dollar sank, and oil prices rose, implying higher gas and food prices, and more constraint on meagre discretionary income.
When will Americans comprehend that contrary to the chorus on Wall Street, the Chicago Mercantile, and among ‘economy experts’ in the media, cheap money is a tap root of their current economic malaise?
Things will take care of themselves when the market is properly regulated. This see-sawing of the market is making everyone sick and very scared. Once the proper regulations are in place things will return to normal – except that a few sharks will be out of a JOB.
the Treasury needs to stop printing FRN & Congress needs to stop the “drunken sailor” spending by pulling troops out of all countries, stop the war spending & impose tarrifs on imports.
The key is to increase consumption. So, instead of just throwing money at random, the government can think about ways to target the specific issue, such as give tax credit on some percentage of durable goods purchases or business investnemts. If money is just given away, people will hoard it, and the economy will not get a real boost. Rewarding certain consumptions can encourage many people, who have money, to spend more now to compensate for the loss in consumption by others. Remember, the great depression was caused by just 10% reduction in consumer demand.
No, the recent drop in gasoline price will funnel billions of dollars into our economy and will benefit the poor the most. Anything more than that will be counter-productive since it adds to the national debt that will be have to paid by raising taxes.
Gee let me see………probably no. Why? Especially not a tax rebate check since we did that already and the result was pretty much nothing. The main reason why I say no is because first, we cannot count on the government to pass anything without tons of unecessary added goodies to satisfy the lobbyists and special interest groups that will have nothing to do with stimulating anything except our budget deficit. Second, we obviously cannot count on them to administer anything that could be worthwhile. For example, the present 700 billion package where we are giving billions to the banks to continue to pay their hefty dividends and aquire other healthy banks to imporve their market share and profits. Wasn’t that money (our money) supposed to improve the lending and credit markets? The banks are saying what, you want me to loan money? Say goodbye to 700 billion folks. Nice knowing ya. It is almost always better if government does NOTHING. If you want to make sure things get really screwed up, let the government handle it. Like your healthcare, oh boy I can’t wait. One thing it will do is cut down on the number of Canadian’s coming over to Michigan to get healthcare because ours will be as crappy as theirs.
If the government truly wants to help get money into the hands of consumers, why not give us a break on our credit card interest rates we’re paying. I’m certainly willing to pay my debt off, but if Interest rates on credit cards were cut by half, even temporarily, that would put much needed cash into the hands of the consumer.
Another check isn’t necessary. In fact, give mine to some one who has lost his/her job – just so long as it isn’t some “poor bastard” on Wall Street!
But the asking price for any stimulus package should be the rescinding of the Bush tax cuts… to offset the defict spending incurred for an extension of unemployment benefits and infrastructure improvment/investment.
To those who would argue that rescinding these tax cuts will be counterproductive I have to laugh. As if wealth trickles down!! How many jobs have the wealthy created lately? Unemployment is rising… if you haven’t noticed. Even most economists will concede that such proposals like those set forth above offer the most bang for the buck. Targeted to those who need cash and financed by those who can afford it. Isn’t this fiscally responsible?
Equally important, offsetting deficit spending with these increased tax revenues would go a long way towards saying that WE are in this all together – rich and poor.
Otherwise, let the class warfare begin in earnest – but from below this time!
Yes another stimulus package is called for, this time for Main Street. I believe if the first package was given to Main Street as proposed to Wall Street it would have been around $250,000.00 dollars for each and every taxpayer who filed in 2008. Double that amount for married couples.
Not that this is any more Constitutional than the first bailout, but in my mind I say it is reparations for crimes committed to the working citizens retirement and savings that was stolen. At least this would be fair across the board, not only helping those who have over extended themselves, but allow those who were thrifty to benefit as well. People will do the same thing they did with that little dinky rebate check last summer, they will pay their bills off, and this will filter back into the banking system. Possibly those who are ok at this point and not over extended, will invest in the markets, though I think it is unlikely since we can not trust the Wall Street leadership or our own Government to be honest businesses. I say here now and I say it for years to come, if you want to restore confidence in the markets, then those involved better start talking about the corruption that lead to this meltdown.
“We the People” are mad as hell and are not going to take it anymore. We know corruption has happened, we know laws were broken, and we know that we have yet to see anyone charged?
There’s good and bad stimulus. It’s very important we don’t “stimulate” housing again, as it’s already overstimulated. The housing bubble from 2000 to 2007 is actually what caused this problem; if housing prices had not bubbled, we’d all be fine.
The cure is to let housing prices continue to correct back down to normal (median house price at about 4x median household income, which is 4 x $45k per year or a $180k median house price). This process is underway; we’re about 1 year into a 7 year correction. After that, housing will be fine. In the mean time, just don’t overbid when you buy.
Going forward, we need to invest much more in productive assets (factories, farms, forests, hospitals, mines, schools, transportation, etc.) and a lot less in consumption (housing, TVs, etc.). We’ll still consume, but we’ll consume less and produce more, reducing the net imports, hopefully to zero and start digging out of this hole of debt we’re in. We can do it.
Lets stop with the calls for provide our economy with more Methanphetomine. We don’t need stimulus. We need to get off the drugs (easy credit and government programs), get our lives in order and deal with the consequences of our 20+ year binge.
More “stimulus” is not going to help. And we can’t afford it. “The government has to do something” just does not change either of those realities. As has been pointed out in comments here, people, businesses, and local governments who have been prudent are not frantic. Yes, it is going to be harder on us all. But what people are really asking our government to do is make it like it was. Let the good times roll. Protect me from having to live within my means. Give me more then I pay for. I want every program and I don’t want to pay more tax.
There is no cure. Get used to it. Reduce your lifestyle, produce more, borrow less, consume less.
The government needs to get out of the way and let the market determine the winners and losers. That means no bailouts and no stimulus. The government has really created the mess we are in by allowing two back-to-back historic bubbles in stocks and in housing to run to extreme excess. No one really invests based on fundamantals, but rather on the government’s next bubble or bailout. Government seem to think they can continue the massive debt buildup without limit, but there is a day of reckoning. I also find the amount of stimulus being considered, on the order of $300-$400 Billion, insignificant when compared to the $11 Trillion US economy. In the end, it just adds to the debt with very little affect on the economy.
if we truly want to stimulate the economy, let those who are smart enough to actually EARN money keep more of what they have.
Consider that the only money the government has to spend is what it takes from taxpayers. And rarely does the government spend money either efficiently, wisely, or productively. Each dollar taken in taxes is one less dollar citizens have to spend on what they feel will benefit their own family, and the businesses that supply their needs.
Instead of government spending money to reward failure, why don’t we allow productive people to spend money improving their own lives, and generally improving the lives of businesses that provide what they are willing to pay for.
To stimulate the economy I propose:
1. eliminate the corporate income tax. After all, corporations don’t pay the tax, they just write the check. Corporate income taxes basically make those who spend all their income (usually the poor) pay taxes at the corporate rate.
2. Cut the personal income tax in half. It won’t reduce the money being spent in the U.S. – it will just mean that individuals rather than politicians choose how to spend it.
3. Cut the capital gains tax in half. This will make it less tempting for “the rich” to put their money into investments like annuities that are not subject to tax until withdrawal.
4. Change the tax code to be like a mutual fund fee – where the more one earns, the less on additional dollars due in taxes. This gives the most productive an incentive to earn even more (providing jobs to more middle-income workers) since above different “breakpoints” new dollars will be taxed at a lower rate, rather than a higher one.
these are a few ideas, but I think a good start.
I think the stimulus checks are good in the short run, but it just adds to the deficit and the slow financial demise of our country.
Personally, I’ll be gald to take the check and put it back into savings/stocks; where it belongs!
A stimulus package with money going for infrastructure kills two birds with one stone. It would stimulate the economy and improve our aging infrastructure, also good for the economy. The problem is that we would not see any effect for some months to come. Projects that are “ready to go” are not really ready to go. Even if all the engineering and design work is done it still takes time to bid and award contracts and then time for the contractors to mobilize. And lets not forget that this is October, weather will delay the beginning of construction in almost all of the country.
On the other hand, even if taxpayers spent the money right away, a tax rebate would probably do more to stimulate the Chinese economy than our own. This is because we have exported so many of our amnufacturing jobs.
While it may seem counter-intuitve a long term strategy to improve our economy would pursue a weak dollar, expensive oil policy. This would atttract manufacturing back to the US, reduce our dependence on foreighn oil and encourage alternantive energy.
We don’t need another stimulus package. Americans are now trying to become more responsible by doing without and paying off debt. Of course consumer spending is down. That is what happens when households start to budget. Lets wake up to this fact and start having the government do the same.
No. The first one did little more than improve the retail numbers for a month. I’d like to see the government trim its own spending to save all taxpayers money in the future. Maybe I’m just bitter because I didn’t qualify for a check last time.
no! although another stimulus check would be nice, i think it is unnecessary, any stimulus bill for that matter…it’s obvious we are not heading toward a depression, and a long recession is still only speculated.
however, i would love to see 2 things addressed from this messsss
1. the socialization of housing…have it more relative to income. it should not be used as an investment since it is a basic life need. look at one of the many ugly sides of american history- housing/property has always been a source of violence, greed, and deprivation. progress is a myth.
2. social security. as a 28 year old, i cringe every time i hear the national debt go up…and the infamous word- baby-boomer. this is a serious problem and both candidates are doing the same thing that has been done in the past 8 years- nothing.
a second stimulus bill in the scope of everything is a needle in a haystack among millions of haystacks.
I am getting tired of bailing out irresponsible business, investors, and main street folks. A few years back I was called stupid, not literally, for not selling my house, going into debt, the biggest no brainer around and I did not take advantage of it. We live in our payed off house, have no revolving credit card debt, own our car, toys, invest, save, and live within our means. We watched all those folks buy new houses, big RV, fancy toys, vacations to all points of the globe, eat at the most expensive restaurants, and live the party life.
Now they want a bailout for the good of the country. Where is the accountability? What do we responsible folks get? Rhetorical question, answer the bill without even a kiss on the cheek.
Bottom Line:
No bailout to irresponsible folks period. Let them taste the soup kitchen cooking. Invest in infrastructure like the old WPA program is another matter and should be carefully looked at. Note the word investment, with clearly stated goals and benefits.
Probably, unfortunately, yes we need do it.
It should probably focus on investment rather than consumption; some good areas are:
– Vehicle fuel efficiency to dramatically reduce imports take fuel economy from 20mpg gasoline or so where it is for cars today to 50mpg running on biofuels very soon and make plans to go to 100mpg; if Detroit won’t do it, let’s develop our own vehicle and let any US citizen license the design and go into production;
– Truck fuel efficiency to improve fuel efficiency a little but mainly to switch from imported petrodiesel to domestic biodiesel;
– Airplane fuel efficiency to switch from imported petrofuel to domestic biofuel, before it’s too late, while we still have an airline industry to save
– Residential insulation improvement, to dramatically reduce imported fuel consumption, especially among uninsulated homes;
– Industrial and commercial energy efficiency, especially to reduce imported fuel and electricity consumption in lighting, heating, and cooling;
– Fix essential roads and bridges, but be careful not to build too many new ones, as these cost even more money to maintain and fix;
– Lower the Medicare age dramatically so that average Americans can afford necessary health care;
– Beef up Social Security;
There are other ideas, but the key is to stimulate the domestic economy that produces goods and services within our borders.
Areas that should not be stimulated:
– Banks, which have already lost a lot of our money;
– Consumer goods, such as flat-panel TVs, which are almost all imported and eventually end up in landfills;
– Health insurance, which is just one big racket;
– Housing, which is consumption, not investment in productive assets;
– Oil, jet fuel, gasoline, and diesel, which are mostly imported and end up getting burned;
– Tax cuts, which usually go into the bank accounts of rich people and then just sit there;
We have to be careful … or we waste even more money and then we’ll need Stimulus, Take 3 !
Create jobs like during the depreasion and spend money on road and bridge repairs and that will put alot of people back to work instead of giving alot of people money who realy dont need it.
I understand that something needs to be done to stimulate the economy, but on the other hand lets stimulate the responsible adults in this country that have made their mortgage payments on time and not on the thieves in the banking industry. This has been going on for years but most of the American public is not aware of all the times the government has bailed out banks and business at the expense of the taxpayers. No wonder social security is running out of money. If the thieves in Washington had of kept their greedy hands off of it there would still be plenty in the trust fund.
And lets not forget another reason we are in a recession. We allow the oil companies and foreign countries that produce oil to rob us blind. When fuel went to outrageous highs people had to make a choice of making their mortage payments or going to work or eating for that matter.
Lets be truthful and say the truth of what has been happening. CORPORATE GREED AND POLITICAL GREED.
In a word, no. Congress should simply resign as we are in the process of throwing them out anyway and like breasts on a bull, they are largely worthless.
Congress insisted that the banks needed the 850m USD to keep the financial dept scheme afloat. And now we see that the banks are just hording the cash. Nice job Paulson…
Why then should the average American believe anything they tell us? I would just as soon see them all hang for treason.
The right way? This guy Gonzalez is thinking way ahead of the storm. He’s overlooking the eye of the hurricane. We’re right in the middle of it and we need help NOW! Forget about the job creation for the future. Let Obama takes care of that. Send a hefty check in the mail a.s.a.p. That’ll ease the pain, at least for now.
If congress decides to take my tax dollars to continue artificially inflating the value of housing, thus making it that much harder for me to buy my first home, I will be even more livid than I am now. Please let the housing market correct. Homes have been too expensive for too long.
Our government has basically thrown everything that they can at this issue in the last two months hoping that something would work, and there are now signs that things are working. I think it’s time to step back, let the steps already taken work themselves through the system, and see what happens. Sometimes the best action to take is none at all.
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Personally, I spend a lot of time making ends meet and those ends just seem to keep moving further and further apart. I’d enjoy another stimulus check but for selfish reasons…my love of shopping.