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View Full Version : Money Economic stimulus, Part 2?


Deberg_1990
07-21-2008, 03:33 PM
Would you be for or against a "Son of Stimulus" ??

http://news.yahoo.com/s/csm/20080721/ts_csm/astim

No one can remember the last time Congress enacted two major economic stimulus packages in one year. But 2008 may see a sequel to the $100 billion worth of checks that started filling individuals' bank accounts in early spring.

Democrats say they will proceed this fall with a "Son of Stimulus." Whether it materializes is questionable; President Bush currently opposes such a move, preferring to wait to see the full effect of the first stimulus package.

As for economists, some say it's a good idea, if done differently from Round 1, but many are skeptical that money can start to circulate through the economy quickly enough. One reason for their concern: Surveys are finding that a major chunk of the money already doled out is going into savings instead of spending.

The impetus for Congress, besides the election year, is a US economy that is not expected to show much change from its current weak conditions by the time lawmakers return from their August recess. The unemployment rate may be trending higher. Energy prices, one driver of inflation, are likely to remain relatively high at least until the end of hurricane season in late November. While new housing starts may be showing signs of stabilizing, home values could still be falling.

"Whether we have negative growth or not, the economy is barely positive, it is going nowhere," says Joel Naroff of Naroff Economic Advisors in Holland, Pa.

Some budget watchers say Congress is unlikely to act unless the economy is in crisis.

"There would have to be an unambiguous perceived need, such as a big stock market drop, a major bank failure, or something that would scare the members," says Stanley Collender, a budget expert and managing director at Qorvis Communications in Washington. "And it would have to be called a tax cut instead of a spending increase."

Some in Congress began weighing an additional spending package in February after Bill Gross, head of PIMCO, a mega-investment manager, suggested the need for a permanent $300 billion to $500 billion spending program.

"To provide a stable recovery path, government spending needs to fill the gap – not consumption," he wrote back then.

If Congress could agree on a second stimulus package, it's not clear how soon the benefits would actually start pulsing through the economy.

"Say they do pass a package in October," says Mr. Naroff. "The Treasury won't start sending out a set of checks until the beginning of next year, and they won't get spent until February, March, and April."

Some economists expect the economy will still be weak next year and in need of a boost.

"The downside risks are significant. Another well-timed and targeted stimulus package would be helpful," says Mark Zandi, chief economist at Moody's Economy. com.

Last week, House Speaker Nancy Pelosi, after meeting with economists, seemed to indicate any stimulus package would be aimed at lower- to middle-income Americans.

"Even though we believe the initial public rebates had a positive impact, it is certainly not enough to offset the rising prices in gasoline, in food, in fuel, in healthcare, in education … while the purchasing power of Americans' income has gone down," she said at a press conference.

Not all economists, however, are convinced that the tax rebate, as this year's handout was called, has been that effective.

University of Michigan economists Joel Slemrod and Matthew Shapiro are researching what taxpayers are doing with their checks – $600 per individual and $1,200 for couples filing jointly.

"So far, we're finding that 20 percent of the people say the rebate led them to spend more," says Dr. Slemrod, who teaches at the Stephen M. Ross School of Business. "That's about what we found for the tax rebates of 2001."

Data indicate a significant portion of the rebate checks is going into savings, Slemrod says. In May, the personal savings rate soared to 5 percent, up from 0.4 percent the month before.

"If you convert that to dollars, you see the jump in savings is about the same magnitude as the stimulus checks in May," he says.

The economist says he has a "wait-and-see" attitude about a second round of stimulus. "I'm not sure we would want to do a second dose the same [way] as the first dose," he says.

Mr. Zandi agrees on the need to try something different. He would consider a payroll-tax holiday for a period of time. This is an immediate cash benefit, particularly for small business and workers who don't earn enough to pay taxes, and is easily implemented, writes Zandi in an e-mail.

"The biggest perceived downside is that payroll-tax revenue goes into the Social Security Trust Fund," he writes, adding that this problem can be resolved by moving money from the general fund to the trust fund.

In addition, Zandi would consider a federal gasoline-tax holiday, an expansion of the food-stamp program, aid to state governments for their Medicaid bills, and maybe some infrastructure spending if a good list could be drawn up quickly.

"It would be all temporary, not permanent, and would run $50 billion to $100 billion," he says.

Economist Robert Gay of Fenwick Advisers in Rye, N.Y., says the economy may well need some form of fiscal stimulus. But the consumer should not be the targeted beneficiary, he argues. "Why not prime a pump that would continue to run?" he asks. One area of spending, he suggests, is alternative energy or improving the electric grid. "Go at the heart of the issue," he argues.

blueballs
07-21-2008, 03:36 PM
Vegas must be hurting

StcChief
07-21-2008, 03:36 PM
what is the check you speak of....

HC_Chief
07-21-2008, 03:38 PM
Against. I was against the first (2001), against the most recent, and against any further.

blueballs
07-21-2008, 03:41 PM
how about a goverment paid vacation
every working body gets a week off with minimum wage pay

Nightfyre
07-21-2008, 03:41 PM
Obviously the solution to a problem caused by the weak dollar is more national debt. Brilliant.

HemiEd
07-21-2008, 03:42 PM
It just makes the dollar that much weaker. No thanks.

chasedude
07-21-2008, 04:29 PM
It just makes the dollar that much weaker. No thanks.


I wish there were more economists then lawyers in congress.

HemiEd
07-21-2008, 04:34 PM
I wish there were more economists then lawyers in congress.

Or at the very least, some integrity. I think even the dumbest ****ing lawyers know they are ****ing this country up right now.



**swooosh** the sound of being whisked away to D.C.

BigChiefFan
07-21-2008, 04:42 PM
How about we don't give them free health care? How about we don't give them tax free money every pay check? How's that for a start? It'll be a cold day in Hell before these ass clowns actually sacrifice for the greater good.

BigVE
07-21-2008, 04:57 PM
The economy is screwed. The national debt is WAY beyond repair. Screw it, send us some more money for the heck of it!

SBK
07-21-2008, 05:06 PM
Congress buying votes, what's new about that?

Guru
07-21-2008, 05:13 PM
Wonder what would happen if citizens voted on this. I would be curious to see how many average citizens would be all for it.

I was against the first one and most definitely am against this one.

CrazyPhuD
07-21-2008, 06:38 PM
Heh yes lets bail out the public for making bad decisions. As bad as this sounds, the public needs to be hurt, badly, because it's the only way we curb bad behavior. As terrible as the great depression was it reminded people of what was important and to save for a rainy day. Because you never know when it might happen. This past 10 years of stupid spending and negative savings rate was just dumb. Now we are reaping what we sow.

In a field one summer's day a Grasshopper was hopping about, chirping and singing to its heart's content. An Ant passed by, bearing along with great toil an ear of corn he was taking to the nest.

"Why not come and chat with me," said the Grasshopper, "instead of toiling and moiling in that way?"

"I am helping to lay up food for the winter," said the Ant, "and recommend you to do the same."

"Why bother about winter?" said the Grasshopper; we have got plenty of food at present." But the Ant went on its way and continued its toil. When the winter came the Grasshopper had no food and found itself dying of hunger, while it saw the ants
distributing every day corn and grain from the stores they had collected in the summer. Then the Grasshopper knew:

It is best to prepare for the days of necessity

Baconeater
07-21-2008, 06:49 PM
Heh yes lets bail out the public for making bad decisions. As bad as this sounds, the public needs to be hurt, badly, because it's the only way we curb bad behavior. As terrible as the great depression was it reminded people of what was important and to save for a rainy day. Because you never know when it might happen. This past 10 years of stupid spending and negative savings rate was just dumb. Now we are reaping what we sow.

Oh good grief, the intent of these isn't to "bail" out anyone. It's to "stimulate" the economy for chrissakes. I don't know why that is so hard for some people to understand.

go bowe
07-21-2008, 07:53 PM
i know another thousand or so would be stimulating to me...

POP
07-21-2008, 08:00 PM
They should raise by a couple of hundred.

BWillie
07-21-2008, 08:42 PM
I don't know what the big deal is. I spent my six hundred dollars at the casino and on hookers. I stimulated the economy. Why not make some sort of voucher that people have to spend on goods or services instead of putting it away. That would be a fool proof way to spur the economy I would think, yeah?

Rain Man
07-21-2008, 08:45 PM
Where's my gun?

SNR
07-21-2008, 09:14 PM
My dad had a great idea for this- send the check via an account card. It can be accepted anywhere that has a credit card slider. That way banks can't touch the money and it will be going back into the economy as intended.

Of course, that solves the problem of people spending the money in the way it was intended to be spent. The other problem on our hands is that stimulus checks don't work. Ever. :banghead:

Guru
07-21-2008, 09:29 PM
My dad had a great idea for this- send the check via an account card. It can be accepted anywhere that has a credit card slider. That way banks can't touch the money and it will be going back into the economy as intended.

Of course, that solves the problem of people spending the money in the way it was intended to be spent. The other problem on our hands is that stimulus checks don't work. Ever. :banghead:

the only problem with that is the fact that it will cost even more to produce the money than just a paper check or direct deposit because then Visa,MC would have to get their cut too.

J Diddy
07-21-2008, 10:52 PM
the only problem with that is the fact that it will cost even more to produce the money than just a paper check or direct deposit because then Visa,MC would have to get their cut too.

deduct 5 to 10 bucks from the amount of checks or visa would probably wave the cost

they get 3.5% of every purchase anyway at least my stores pay that

Der Flöprer
07-21-2008, 11:45 PM
Posted via Mobile Device

Everybody talks about equality, but nobody bes about it. We've been trying to stimulate the global economy
for decades. It's starting to work and people aren't liking it when the pendulum swings the other way.

It's a down time right now, nothing more nothing less. Production is not taking a hit, other countries are using the tools we've been giving them and catching up.

Combine that with the housing scam, the rise in price of oil due to the increased production globally and it's a bad combination for Americans.

We need to tighten the buckles and show some patience through this. Not send out some more free money people can piss away on all of their overindulgences. It's time to adapt to current times, not continue falling behind the very people we taught to rise to our level.

JuicesFlowing
07-22-2008, 02:40 AM
How many people use the stimulus check to pay credit catrd bills, etc? How does that stimulate the economy?

Guru
07-22-2008, 02:51 AM
How many people use the stimulus check to pay credit catrd bills, etc? How does that stimulate the economy?

Paid off my vacation that I was taking anyway. I didn't do my part.:D

Redrum_69
07-22-2008, 08:16 AM
what we need is anarchy
wipe the slate clean
start over
armageddon

dj56dt58
07-22-2008, 08:47 AM
deduct 5 to 10 bucks from the amount of checks or visa would probably wave the cost

they get 3.5% of every purchase anyway at least my stores pay that

which brings up a question..why is it that stores prefer you pay with a cc when they lose money on each purchase?

BTAU
07-22-2008, 08:49 AM
what we need is anarchy
wipe the slate clean
start over
armageddon

Fight Club!!

oh wait ... wrong thread. :)

Nightfyre
07-22-2008, 09:01 AM
which brings up a question..why is it that stores prefer you pay with a cc when they lose money on each purchase?

loss prevention.

KC Kings
07-22-2008, 09:20 AM
deduct 5 to 10 bucks from the amount of checks or visa would probably wave the cost

they get 3.5% of every purchase anyway at least my stores pay that

Does your store charge the bank for ATM transactions?

I use my debit card for everything, and usually enter my pin because it takes the money out automaticallty. My bank sent a letter saying that they would give me $.50 for every time I used my debit card as credit, up to $10 a month.

It is a Visa Bank card, but I assumed that if Visa charged you then the bank would also charge, but is that not the case?