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yesthattom

My thought on the stimulus package

Obama added 300 billion in tax cuts to encourage the Republicans to support it.

  • For every $1 of tax cut, experts say that $0.75 in jobs are created.
  • For every $1 of "shovel ready" projects, experts say that $1.50 in jobs are created (plus, you get the benefits of new highways, schools, etc.)


So, not a single Republican in the house voted for the bill. They all either said "it was too expensive" or "it wasn't going to be effective without being bigger" (the average of the two would be "it's just right'). Many Republicans said both.

So, now that it goes to the Senate, where it could pass without any Republican support, my thinking is:

REMOVE ALL THE TAX CUTS.

  • They don't help as much as projects
  • They really only help the rich.
  • Adding them didn't get the votes "promised" by the Republicans


REMOVE ALL THE TAX CUTS.

No Tax Cuts For Stimulus Action Page: http://www.peaceteam.net/action/pnum932.php

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REMOVE ALL THE TAX CUTS.

I've heard that one a bit, and it's not a bad idea.

Given that Obama (and Rahm) probably thought about that idea in 5 seconds flat, the question is whether they dismissed it out of hand (and why), or if they haven't dismissed it, how they intend to dress it up to maximize the "nyah nyah" potential.

What I've read about the tax cuts is that they aren't directed at the rich at all. My research is leading me to facts like this that talk about the benefits for middle-class taxpayers. Assuming that's the case, then the administration is probably accepting tax cuts because they're a good way to enact Obama's taxation policy in the first year even if it isn't quite as bang-worthy as more spending. And even if a balanced approach doesn't bring the GOP on board, it's sure to be a comfort to the Dixiecrats and appealing to independents throughout the country, which will bear fruit in 2010 and beyond.

But I will say that I've had it up to here with a House GOP that lobbies for local pork in a bill and then proudly votes against it knowing that it will pass anyway. I hope that derailing that train is high on Rahm's agenda.

Why the heck should someone appease people who's votes don't matter? It can pass without them.

Um, because they vote every two years and history shows that they can be taken in by a "Contract With America" when the Democrats provide the perception of being out of touch with centrist values? Karl Rove believed that having 50.1% of the legislature meant that you could form an empire that thumbed its nose at the 49.9% minority. Philosophically, I disagree with that notion, and pragmatically I have seen how quickly and firmly it collapses when the pendulum swings and the electorate finds that it doesn't care for your hubris.

Plus, the Obama administration ran on a policy of blue collar tax cuts. He's not going to be able to deliver that whole loaf in his first hundred days, but I'm sure it will be a boost in consumer confidence if his actions can put a cork in the constant drone that you have to plan on Democratic tax hikes when making your family budget. That's good economic and political sense.

Finally, I don't see the taxes and spending sides of the stimulus bill as a zero-sum game. The bailout showed that Congress will find that a $700B spending bill is too big but a $810B spending and tax cut bill is just right.

It is a bad idea, see my comment to yesthattom

The objective of including tax cuts in the plan was not to 'get Republican votes.'

The tax cuts in the stimulus package, as proposed, are all aimed at low and middle income workers.

They're intended to serve a short term objective (stimulate spending), and a long term objective (reduce income disparity). They add value to the stimulus plan because they move money into the economy faster than building projects can and because there aren't enough 'shovel ready' projects to move as much money into the economy as the administration would like to.


Agreed. The tax cuts I've heard of are an increase in the EITC (which benefits low-wage workers the most), and a decrease in payroll taxes (Social Security/Medicare), which again benefits low and middle income workers. These cuts are directed at people who work for a living.

In my perfect world, this would also be the time to lift the cap on taxable wages for Social Security. The latter cut is more beneficial to people earning less then $90K (I think) because no one pays payroll taxes on income above that amount.

(Deleted comment)
You are saying that counter-cyclical spending is bad, and I say it is good. When the economy is bad, that's a good time for the government to spend money on projects that will benefit people when the economy is better (new roads, schools, etc.). Labor is cheaper and people need jobs.

This is why the "balanced budget amendments" are a bad idea even though they sound so good. It the years where government revenues are low that they need to be spending; and years that revenues are good that they can afford to withhold spending.

There are ZERO ear marks in this package. "Pork" is in the eye of the beholder (drive down the federal highways near me without hitting a pothole THEN tell me that having my highway repaired is "pork"!)

The "shovel ready" parts of the bill will generate $1.50 in jobs for every $1 spent. The tax cut portions only generate $0.75 in jobs for every $1 spent. That makes the Republicans the irresponsible party.

If you disagree, I'd gladly sell you my $75 stereo for only $100.



(Deleted comment)
(1)

If you know the definition of "earmarks", then you'd agree that those aren't earmarks. Earmarks are when a bucket of money is allocated for a department to spend as they see fit, but then that authority is usurped by a representative that puts an earmark on it... a portion of the bucket is specified for a personal pet project.

What you are railing against is something else: Pork. Which you are also wrong about. Pork is "funding at the Federal level of local projects with little or no national significance" (at least that's what Wikipedia claims, and wikipedia is NEVER WRONG). The 3 items you mentioned are all federal level funding of federal projects.

I win this one on a technicality involving definitions.

(2)

So, you dislike that our federal buildings that need repairs are going to be repaired? If labor is cheap right now then this is the perfect time to do those repairs. Heck, if such repairs make it more energy efficient, it helps operational costs that will extend out year after year. ANY MBA PROGRAM WOULD SAY: FIX THINGS THAT COST YOU MORE IN THE FUTURE. This is something that our government has a hard time doing and yet when someone proposes we do better, you are against it? Let me give you an example: Ever work in a federal building where there's some fucked up heating or cooling problem and people just open doors and windows to "fix it"? When someone says, "hey, isn't that a waste of heat?" people reply, "Oh, don't worry, the government pays for the heat". Well, fixing those problems FOR REAL costs money. Geeze, if this was 7 years ago I'd be screaming "WHY DO YOU HATE AMERICA???"

Ah, and then I remembered who you are (actually... I looked up your profile). You don't like it because it is right, wrong, or efficient or inefficient... you hate anything that has to do with the government. So, really I'm wasting my breath.

You win this one on account of the fact that you have the will to talk endlessly about how terrible government is and I just get bored and tired of it all. Though, I do suppose I could take some anti-libertarian talking points FAQ, run it through a Markov Chain generator, and see how long before you realize that I'm not even participating. Or, I could do it with a pro-libertarian FAQ and see how long you can argue with yourself.

You see, Mark, the reason I'm so damn harsh when it comes to libertarians is they believe their own poo doesn't stink. Even in the edge-cases where it's obvious that compromise is important they refuse to back down. As a scientist it offends me to hear smart people boast about untested theories as if they are hard facts. The truth is that the libertarian party is a virgin boy trying to convince a woman that he's good in bed based on the fact that he's so good at masturbation.

Sorry for being harsh.

Wait, I have one more Libertarian joke. This LP fanatic posted a long diatribe to my LJ once and I deleted his comment. He emailed me saying how unfair it was. I replied, "As an libertarian I'm sure you respect my right to control my own printing press." For some reason he didn't think it was as funny as I did.


(3)

My 1.50 vs 0.75 statistic comes from Krugman. I know that you are a lot smarter than me, but Krugman is a lot smarter than both of us put together.

And Krugman says the only problem with the economic package is that it isn't big enough.

If you think he's wrong, post to his blog, not mine.

I win this one for giving you a direct reply rather than doing what I originally wanted to do when you compared me to O'Reilly.


(4)

$600 million for new cars counts as "shovel-ready" absolutely. "Shovel ready" is a metaphor, not a literal thing. It means projects that are ready to go.

You knew that already. If not, I have to warn you that that windows "Desktop" on your computer isn't a real desktop either.

(Deleted comment)
> However, I'm not one of them

What? I must be talking to the wrong Mark.

> you hadn't answered how "shovel-ready" projects provide...

I haven't, but I have given you links to thinks that have. And, if you want the technical term it is called the "Keynesian multiplier". The $1 in salary is used to pay $0.30 in rent, and $.30 in food, etc, etc. and that creates more jobs, etc. etc.

Your dismissal of Krugman's logic is based on the same lack of facts that you claim he has. The difference is that he has a Nobel Prize in Economics and you have... a long history of posts on the internet.

...


Something you're saying just didn't sit right with me. Then I read an article that really sank it: You are complaining about items in the bill that are millions of dollars when they total to 1-2% of the bill. LAAAME.
Now, the tell in my eyes is that almost all the criticisms I've heard are about budget items in the millions. And when you're talking about a bill with over $800 billion in spending, you just have a hard time getting to any substantial percentage of the total spend with such relatively small items....

Set aside whether you think these line items are worthwhile. (And it seems obvious to me that it's good for the economy to buy more vehicles for the government fleet, when our auto industry is cratering and demand for cars is flatlining.) But just add those up and you get a total -- $3.51 Billion -- out of $819 Billion.

The pretty simple fact here is that the Republicans are not willing or able to criticize any of the substantial amounts of spending in this bill. They're focus on a few tiny parts of it. And too few people are pointing out that these amount to maybe one or two percent of the program total.

You are falling into the trap that Republicans set out for you.

You still haven't said what you would do differently. You've said that you would procecute Madoff... which is a $50 billion dollar matter, which is 0.5% of the problem.

Stop being the virgin that claims he'd be an awesome lay because he's so good at masturbation. Propose something that would fix the problem and explain how you would get the legislation passed!

(Deleted comment)
Alternative reality post...

So Mark, how would YOU fix the economy?

Saying "there shouldn't be a package" is NOT an option. The debate has moved beyond that.

So, Mark, how would you fix it?

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