Money Economic stimulus, Part 2?

Deberg_1990 · 07-21-2008, 02:33 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, 02:36 PM

Vegas must be hurting

StcChief · 07-21-2008, 02:36 PM

what is the check you speak of....

HC_Chief · 07-21-2008, 02:38 PM

Against. I was against the first (2001), against the most recent, and against any further.

blueballs · 07-21-2008, 02:41 PM

how about a goverment paid vacation
every working body gets a week off with minimum wage pay

Nightfyre · 07-21-2008, 02:41 PM

Obviously the solution to a problem caused by the weak dollar is more national debt. Brilliant.

**HemiEd** · 07-21-2008, 02:42 PM

It just makes the dollar that much weaker. No thanks.

**chasedude** · 07-21-2008, 03:29 PM

Quote:

Originally Posted by HemiEd

It just makes the dollar that much weaker. No thanks.

I wish there were more economists then lawyers in congress.

**HemiEd** · 07-21-2008, 03:34 PM

Quote:

Originally Posted by chasedude

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, 03:42 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, 03:57 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, 04:06 PM

Congress buying votes, what's new about that?

**007** · 07-21-2008, 04:13 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, 05:38 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.

Quote:

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

**Bugeater** · 07-21-2008, 05:49 PM

Quote:

Originally Posted by CrazyPhuD

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.

07-21-2008, 02:33 PM
Deberg_1990 In Search of a Life Join Date: Jan 2004 Location: San Antonio Tx. Casino cash: $3914454	Economic stimulus, Part 2? 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.
Posts: 66,914

07-21-2008, 02:36 PM	#2
blueballs Banned Join Date: Feb 2006 Casino cash: $10004900	Vegas must be hurting
Posts: 14,233

07-21-2008, 02:36 PM	#3
StcChief Playing for #1 Draft Pick Join Date: Oct 2003 Location: Just West of Lambs land Casino cash: $10004900	what is the check you speak of.... __________________ sig test for this screwy schema
Posts: 25,901

07-21-2008, 02:38 PM	#4
HC_Chief That's just f***in' stupid Join Date: Aug 2000 Location: suburbia Casino cash: $3687107	Against. I was against the first (2001), against the most recent, and against any further. __________________ "Gentlemen, you can't fight in here, this is the war room!"
Posts: 12,355

07-21-2008, 02:41 PM	#5
blueballs Banned Join Date: Feb 2006 Casino cash: $10004900	how about a goverment paid vacation every working body gets a week off with minimum wage pay
Posts: 14,233

07-21-2008, 02:41 PM	#6
Nightfyre MVP Join Date: Mar 2004 Location: Helena, MT Casino cash: $3678849	Obviously the solution to a problem caused by the weak dollar is more national debt. Brilliant.
Posts: 18,535

07-21-2008, 02:42 PM	#7
HemiEd Supporter Join Date: Dec 2004 Location: Ozarks Casino cash: $3320564	It just makes the dollar that much weaker. No thanks.
Posts: 33,408

07-21-2008, 03:42 PM	#10
BigChiefFan MVP Join Date: Feb 2001 Location: In the Top 10 Casino cash: $9924205	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. __________________ A 35 year drought can make you thirsty.
Posts: 15,777

07-21-2008, 03:57 PM	#11
BigVE Veteran Join Date: Apr 2001 Location: centralKs Casino cash: $10005250	The economy is screwed. The national debt is WAY beyond repair. Screw it, send us some more money for the heck of it! __________________ Meh.
Posts: 4,829

07-21-2008, 04:06 PM	#12
SBK Curry is the pick??? Join Date: Mar 2004 Location: Georgia Casino cash: $10004900	Congress buying votes, what's new about that?
Posts: 8,153

07-21-2008, 04:13 PM	#13
007 Shaken. Not stirred. Join Date: Sep 2002 Location: London Casino cash: $14060126 VARSITY	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. __________________ My dear girl, there are some things that just aren’t done. Such as, drinking Dom Perignon ’53 above the temperature of 38 degrees Fahrenheit. That’s just as bad as listening to the Beatles without earmuffs.
Posts: 65,554