Bush Calls for $140 Billion Economic Aid Package

[NorthSideSox72]

I believe part of the issue is the age that the classes would happen. At 16 or 18 I don't believe the kids have enough "real world" experience and it does not "stick" for the 10 years or so until they are buying homes, etc. Think how hard we strain to remember some items we learned in High School.

You may not remember a lot of small specifics, but you remember some core stuff. You learned math and an assortment of other things you still remember. That's what it should be. You can't really require a class beyond high school anyway - college, its too narrow a group, and too late. Needs to be late high school.

[Texsox]

You may not remember a lot of small specifics, but you remember some core stuff. You learned math and an assortment of other things you still remember. That's what it should be. You can't really require a class beyond high school anyway - college, its too narrow a group, and too late. Needs to be late high school.

 

Agreed. But I think even with the absolute best class possible, there needs to be some refresher, some whatever later in life.

[YASNY]

Agreed. But I think even with the absolute best class possible, there needs to be some refresher, some whatever later in life.

 

There is. It's called the School of Hard Knocks. Experience is a great teacher.

[Texsox]

There is. It's called the School of Hard Knocks. Experience is a great teacher.

 

I hit on something with my son when he was younger. We always tried to turn a negative into a positive by using it as a teaching moment and seeing what we could learn from that mistake. Most people can learn from their mistakes, but how many people really learn something from their successes?

[kapkomet]

I hit on something with my son when he was younger. We always tried to turn a negative into a positive by using it as a teaching moment and seeing what we could learn from that mistake. Most people can learn from their mistakes, but how many people really learn something from their successes?

Not many, unfortunately. I try to look at both and improve at both.

[YASNY]

I hit on something with my son when he was younger. We always tried to turn a negative into a positive by using it as a teaching moment and seeing what we could learn from that mistake. Most people can learn from their mistakes, but how many people really learn something from their successes?

 

Doesn't eliminating mistakes lead to successes?

[Texsox]

Doesn't eliminating mistakes lead to successes?

 

Usually. The point is not many people will stop and ask themselves why someting went right. They will assume it is because they are bigger, faster, stronger, smarter, etc. And that may be it. But duplicating your success is a powerful thing. Improving on success, as Kap just mentioned, can be so powerful.

[sox4lifeinPA]

Ok, I understand the need to drive more money into the market, but it's not FIXING the problem. $800 or $1600 isnt going to pay mortgages that were doomed fromt he start. it wont pay thousands of dollars in medical bills. The underlying problems need to be fixed, just dont throw money at it and expect it to get fixed.

 

 

1600 bucks would be amazing for this newlywed couple

[HuskyCaucasian]

1600 bucks would be amazing for this newlywed couple

And for this couple who just found out we are gonna have a baby. But it doest fix the country. lol

[jasonxctf]

while its nice to have a little extra $ in the pocket, just like the '01 "rebate" (even though it was really a tax refund advance) will have little to no effect on things.

 

you can only delay the inevitable so long... it sucks, but we're going to have to take our lumps before it gets better. no vodoo-economic tricks will fix this.

 

at the same time, its time for corporate america to pick up its slack. this economy has been running "luke warm" on consumer spending alone for at least 5 years. corporate spending has remained pretty flat while profits have been rising. (up until this past qtr)

[Balta1701]

while its nice to have a little extra $ in the pocket, just like the '01 "rebate" (even though it was really a tax refund advance) will have little to no effect on things.

 

you can only delay the inevitable so long... it sucks, but we're going to have to take our lumps before it gets better. no vodoo-economic tricks will fix this.

 

at the same time, its time for corporate america to pick up its slack. this economy has been running "luke warm" on consumer spending alone for at least 5 years. corporate spending has remained pretty flat while profits have been rising. (up until this past qtr)

Not an economist myself but happy to defer to analysis by those who are.

Economists disagree about the effectiveness of rebates. "Estimates of how much consumers spend in response to various stimuli are treacherous," former Federal Reserve Governor Lyle Gramley wrote in an e-mail to CNNMoney.com.

 

Gramley noted, for instance, that estimates of spending by consumers who cash out home equity range wildly - from 0 to 60 cents on the dollar.

 

But Furman and Mark Zandi, chief economist of Moody's Economy.com, point to a study published last year that found in 2001, when households received rebates between $300 and $600, consumers spent two-thirds of those rebates within six months of receiving them. The study estimates the rebates gave a healthy boost to consumer spending at the time.

 

But, Zandi noted in an e-mail, "The effectiveness of a tax rebate on consumer spending would be enhanced if targeted to lower and middle income households that are more financially constrained and thus more likely to quickly spend the rebate check."

 

A study of various stimulus options by the Congressional Budget Office released this week, meanwhile, found that a one-time rebate could be highly cost-effective in terms of boosting demand if it's focused on people most likely to spend it. It also found that a rebate could take between 6 months and a year to achieve its full effect in boosting demand.

 

If rebate checks are first sent out starting in late June - almost six months from now - it's not unreasonable to wonder if that is soon enough to be effective. Zandi thinks it could be.

 

"It certainly won't forestall a recession if we are in one, but it could reduce the severity of a downturn or make it shorter," he said in separate e-mail. "Say the rebate is $100 billion. Two-thirds will get spent by year end if the 2001 tax rebate is a guide. Thus, $60-$70 spent in the second half of the year will translate into about 1% of annualized real GDP growth. That is measurable."

Thoughts?

[southsideirish71]

I have my 1600 dollars earmarked for a quarter horse named Lucky Larry's revenge, he is a long shot but its worth it. Yes its high risk, but I need some sort of strategy to counter the massive increase in my taxes next year when whomever takes over as President.

[sox4lifeinPA]

And for this couple who just found out we are gonna have a baby. But it doest fix the country. lol

 

 

F the country... It's gonna keep on going without my 2cents.

 

but I'll keep going on with their 1600 bucks.

[shipps]

I have my 1600 dollars earmarked for a quarter horse named Lucky Larry's revenge, he is a long shot but its worth it. Yes its high risk, but I need some sort of strategy to counter the massive increase in my taxes next year when whomever takes over as President.

Lol.Iam sure thats exactly what Bush has in mind.

[southsider2k5]

while its nice to have a little extra $ in the pocket, just like the '01 "rebate" (even though it was really a tax refund advance) will have little to no effect on things.

 

you can only delay the inevitable so long... it sucks, but we're going to have to take our lumps before it gets better. no vodoo-economic tricks will fix this.

 

at the same time, its time for corporate america to pick up its slack. this economy has been running "luke warm" on consumer spending alone for at least 5 years. corporate spending has remained pretty flat while profits have been rising. (up until this past qtr)

 

So when corporate profits crash, what do you think is going to happen, they are going to hire more people? Trust me, if those profits go away, so do workers. That is NOT good.

[NUKE_CLEVELAND]

Late to the party on this one and without reading any of the other replies yet, I have 3 words for this plan.

 

STUPID, STUPID AND STUPID.

 

 

The reason the economy is having difficulty is because of several reasons, none of which will be fixed by more deficit spending.

 

The American consumer has been on a spending binge these last several years the likes of which has never been seen. Personal responsibility, fiscal responsibility and any semblance of sanity has been cast to the wind during this period. Instead of living within their means & saving for a rainy day or retirement, the American consumer has chosen to buy big screen TVs, cars, other gadgets they really can't afford. When they ran out of cash and borrowing power, they raided their home equity to pay for it all but then just kept right on spending even after that was gone.

 

Speaking of homes, Americans have also bought homes they couldn't hope to afford using mortgage gimmicks ( ARM's, interest only, etc... ) that they were either too lazy, ignorant or just plain stupid to research. As soon as the interest rates went up, their payments shot to Pluto and they lost their homes. Boo f***ing hoo.

 

Now, what does the government do? I love it. In their typical pattern of pandering and copping out instead of seriously dealing with a problem, they are going to throw a couple of hundred bucks at each family. How is this going to be financed? By more deficit spending. LMFAO!!!!!!! Politicians and consumers are f***ing made for each other. What a joke our government is.......on BOTH sides of the aisle.

[Texsox]

Nuke

[Texsox]

BTW, the get the most out of my gift, I'm shopping in Mexico

[NorthSideSox72]

BTW, the get the most out of my gift, I'm shopping in Mexico

You sure about that? With the dollar so weak, the US may be the best place to do your shopping right now.

 

[Texsox]

You sure about that? With the dollar so weak, the US may be the best place to do your shopping right now.

 

[/quote

 

zero sales tax. It really depends on what I am buying. I was kind of joking, since spending the money outside the borders would not produce the desired results.

 

I was also thinking, when Nuke and I agree 100%, does that mean we are almost certain to be right, or really, really, wrong

[Balta1701]

Is it worth noting that at present, the House version of the deal also includes something like $50 to $70 billion in additional business tax cuts, and so is not just the rebate plan? Are y'all ok with that or are you outraged by that part too?

Edited January 25, 2008 by Balta1701

[kapkomet]

The problem, though, is that this $140 Billion does not actually exist. It is coming from simply printing $140 billion more dollars. That doesn't mean the money is actually "worth" anything. This is only going to further hurt things and create a bigger bubble so that when the recession actually does hit - it will be far worse than it was intended to be. The simple printing of money is what is devaluing the money. Oil didn't hit $100/barrel because the price of oil went up. It hit $100 because the dollar fell so much. Printing more money is simply going to cause more inflation, and therefore, more of the same problems. Prices will continue to rise on everything at a rate that the ordinary & even the strong middle class cannot keep up with. With simply printing $140 billion extra dollars, by the time it works its way thru the market, the money will be worth much less than that. And it won't only be that money, but it will be all money that becomes worth less. All the money in people's savings accounts becomes worth less, the money in your paychecks, etc. It all becomes more and more and more severely devalued due to the inflation caused by simply printing money to try to 'fix' the problems. The fact is, for many, many, many years the Federal Reserve was able to "correct" these market problems because the problem was not this bad yet. But now, the Feds power is becoming more and more and more useless to serve the 'purpose' that ordinary citizens think it 'fixes'. The Fed has simply tried to pull the market out of recessions (not their "point", I know, but what many think the Fed is for), etc., but the problem now is beyond what the Fed can withstand & when it gets to the point that it simply can't 'fix' the problem anymore - there will be a massive problem for most every citizen. Runaway inflation will wipe out much of the lower middle class - which is the vast majority of citizens (including probably most posters - or poster's parents - on this site), and will irreversably damage the lower class. The reason is because the Fed simply cannot drop the rates much lower. They're already at 3.5%, and banks STILL don't want to lend the money because they've taken such a massive hit from the current problem that they simply cannot afford to take further damage. What the Fed SHOULD do, even though maybe not 'popular', is raise the rates pretty significantly. Get the people to lose their homes who are already destined to do so & and that would help much, much more. The Fed is trying to make sure the lower middle class simply can "keep their home & barely get by for the next 2-5 years", but at the cost of actually losing their homes, jobs, and cars after that point. They're trying to make today's blow softer at the expense of tomorrow - when they could make today's and tomorrow's equally as bad - but today's and tomorrow's low will not be nearly as bad as "protecting today" at the expense of tomorrow.

 

This is kind of a new era for people who "work(ed) in the marketplace" because this has not exactly been seen before. Many people who are not complete authoritarians on economics really do not understand what is happening because, frankly, you can't understand what is going to be happening without a VERY VERY strong knowledge of exactly how economics work. They think they can predict this and that based on yesterday, when in fact, the market has been changed to the point that what is coming cannot be fixed by the monetary & fiscal policies used in the last 50-60 years.

 

Do you have any idea of how cyclic our economy is? I don't disagree with some of what you're saying, but... EVERYTHING is a cycle, and will always be, as ebbs and flows happen over time. There was, is, and always will be boom and bust cycles. The Fed's real job is to make sure there is ample money supply during the bust times and to restrict money so that it isn't so plentiful when things are going really well. The problem is these people got greedy when there was free money all over the place (when rates were at 1%) and now they're paying for it. It's pretty much as simple as that.

 

 

[hitlesswonder]

The Fed is trying to make sure the lower middle class simply can "keep their home & barely get by for the next 2-5 years", but at the cost of actually losing their homes, jobs, and cars after that point.

 

Really? I don't think so. The latest rate cut seems like a direct response to the worldwide drop in financial markets; it was a special cut made to stave off a crash on Wall Street. That's actually a big departure from the Fed's historic role of keeping inflation low while trying keep unemployment from being excessively over the "natural rate". I don't think it was done with the short-term prospects of the lower middle-class in mind. I also read that the recent market-surge was partly based on rumors that there would be a federal bailout of MBIA and Ambac. Again, if that happens, the direct beneficiaries will not be the lower middle class.

 

I'm not smart enough to say anything with any authority about a stimulus package, but I do think that borrowing more money to give a few hundred dollars to taxpayers is unlikely to be useful. It also would be nice if US government policy would stop screwing over people who hold cash and save. I'm tired of repeatedly reading about how the US savings rate needs to climb while at the same time virtually every monetary and fiscal policy announced discourages saving.

 

[Balta1701]

You know the amazing thing? Most of that paragraph I think he's completely right about. Save the anti-socialized medicine part.

[kapkomet]

You know the amazing thing? Most of that paragraph I think he's completely right about. Save the anti-socialized medicine part.

But there's some completely impossible theory in part of it. I'm not getting into the pissing match, though.