$825 Billion Stimulus Plan

[quote author="green_cactus" date=1234017196][quote author="awgee" date=1234002509][quote author="green_cactus" date=1234001432][quote author="No_Such_Reality" date=1233998990]I don't what you expect for $8400/tax filer...



Yes folks, that's what $925,000,000,000.00 comes out to, $8400 for every individual income tax return filed.</blockquote>


What percentage of GDP is it?</blockquote>


15.5% of GDP.

Not including the $700 bil TARP.

and not including the trillions the Fed has created and used to "stimulate" the economy.</blockquote>


Are you sure about this number? I keep on hearing that it is closer to 2% and as such too small to make a difference. I'm just bracing myself for the next "stimulus package" to get closer to the percentage of GDP that is supposed to make a difference. At least, that is what some economists are arguing for and there are loud voices calling for a much larger package.</blockquote>


Final numbers for 2008 are not in yet, but the CIA World Fact Book <a href="https://www.cia.gov/library/publications/the-world-factbook/geos/us.html">estimates annual GDP for 2008 at $14.33 trillion.</a> 925 billion / 14.33 trillion = 6.5% of GDP. Of course only 20% of this "emergency" funding will be spent in fiscal 2009.



According to Nancy Pelosi, if we don't pass this bill, the US economy will lose 500 million (not a typo) jobs a month.



According to Obambi, if we don't pass this bill, the US economy will never recover. (Obambi has also apparently retired the green eye shades he was going to wear as he combed the federal budget line by line for waste. He is now saying that earmarks are inevitable in a bill like this)



Even if you believe in Keynesian economics, this bill is a dog. About 1 dollar in 12 actually goes towards something that could be construed as stimulus.
 
<i>15.5% of GDP.</i>



Dude, not even close. 2008 US GDP is <a href="http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nominal)">14.3 trillion</a> and it's a 2 year package, so it's 2.7% of GDP.
 
Can someone explain why they needed 3 Republicans (and I use the term loosely) to help broker a compromise in the Senate? They have 58 votes, and no Republican was threatening a filibuster, so why not just call the roll and get the vote on the bill they put together originally? Don't the Democrats have the votes to push it through by themselves?
 
[quote author="WINEX" date=1234017921][quote author="green_cactus" date=1234017196][quote author="awgee" date=1234002509][quote author="green_cactus" date=1234001432][quote author="No_Such_Reality" date=1233998990]I don't what you expect for $8400/tax filer...



Yes folks, that's what $925,000,000,000.00 comes out to, $8400 for every individual income tax return filed.</blockquote>


What percentage of GDP is it?</blockquote>


15.5% of GDP.

Not including the $700 bil TARP.

and not including the trillions the Fed has created and used to "stimulate" the economy.</blockquote>


Are you sure about this number? I keep on hearing that it is closer to 2% and as such too small to make a difference. I'm just bracing myself for the next "stimulus package" to get closer to the percentage of GDP that is supposed to make a difference. At least, that is what some economists are arguing for and there are loud voices calling for a much larger package.</blockquote>


Final numbers for 2008 are not in yet, but the CIA World Fact Book <a href="https://www.cia.gov/library/publications/the-world-factbook/geos/us.html">estimates annual GDP for 2008 at $14.33 trillion.</a> 925 billion / 14.33 trillion = 6.5% of GDP. Of course only 20% of this "emergency" funding will be spent in fiscal 2009.



According to Nancy Pelosi, if we don't pass this bill, the US economy will lose 500 million (not a typo) jobs a month.



According to Obambi, if we don't pass this bill, the US economy will never recover. (Obambi has also apparently retired the green eye shades he was going to wear as he combed the federal budget line by line for waste. He is now saying that earmarks are inevitable in a bill like this)



Even if you believe in Keynesian economics, this bill is a dog. About 1 dollar in 12 actually goes towards something that could be construed as stimulus.</blockquote>


Sorry. I used the same numbers, but I divided the 14.33 trill / the 925 bil. Duh!

Of course it is fair to figure how much each supposed job is costing. It is only not fair for those who want to bury their heads in the sand and pretend that the government can or will do anything to help the economy. Government intervention can and will only make the economy worse.

If this bill is a dog, per WINEX, then Keynesian economics is what the dog leaves in your yard.
 
[quote author="awgee" date=1234048269][quote author="WINEX" date=1234017921][quote author="green_cactus" date=1234017196][quote author="awgee" date=1234002509][quote author="green_cactus" date=1234001432][quote author="No_Such_Reality" date=1233998990]I don't what you expect for $8400/tax filer...



Yes folks, that's what $925,000,000,000.00 comes out to, $8400 for every individual income tax return filed.</blockquote>


What percentage of GDP is it?</blockquote>


15.5% of GDP.

Not including the $700 bil TARP.

and not including the trillions the Fed has created and used to "stimulate" the economy.</blockquote>


Are you sure about this number? I keep on hearing that it is closer to 2% and as such too small to make a difference. I'm just bracing myself for the next "stimulus package" to get closer to the percentage of GDP that is supposed to make a difference. At least, that is what some economists are arguing for and there are loud voices calling for a much larger package.</blockquote>


Final numbers for 2008 are not in yet, but the CIA World Fact Book <a href="https://www.cia.gov/library/publications/the-world-factbook/geos/us.html">estimates annual GDP for 2008 at $14.33 trillion.</a> 925 billion / 14.33 trillion = 6.5% of GDP. Of course only 20% of this "emergency" funding will be spent in fiscal 2009.



According to Nancy Pelosi, if we don't pass this bill, the US economy will lose 500 million (not a typo) jobs a month.



According to Obambi, if we don't pass this bill, the US economy will never recover. (Obambi has also apparently retired the green eye shades he was going to wear as he combed the federal budget line by line for waste. He is now saying that earmarks are inevitable in a bill like this)



Even if you believe in Keynesian economics, this bill is a dog. About 1 dollar in 12 actually goes towards something that could be construed as stimulus.</blockquote>


Sorry. I used the same numbers, but I divided the 14.33 trill / the 925 bil. Duh!

Of course it is fair to figure how much each supposed job is costing. It is only not fair for those who want to bury their heads in the sand and pretend that the government can or will do anything to help the economy. Government intervention can and will only make the economy worse.

If this bill is a dog, per WINEX, then Keynesian economics is what the dog leaves in your yard.</blockquote>


The two variables are independent of each other. Keynesian economics is what it is even if this bill wasn't so pork-laden. Hayek is who we should be turning to.
 
[quote author="green_cactus" date=1234016903][quote author="awgee" date=1234002264][quote author="No_Such_Reality" date=1233998990]I don't what you expect for $8400/tax filer...



Yes folks, that's what $925,000,000,000.00 comes out to, $8400 for every individual income tax return filed.</blockquote>


I think the senate lowered it to $765,000,000,000. At 3.5 mil optimistically projected created jobs, that is over $218,000 per job.



For any of you out there who think that creating 3.5 million jobs is a good thing, do you think this spending borrowed non-existent money package is the way to create 3.5 mil jobs?



IMO, this plan will "create" less than 500,000 temporary jobs.</blockquote>


It's not fair to just divide the amount by # of jobs created. There are tangible results that arise from this "investment". This needs to be factored in - for example, what is the value of a bridge or a road that gets built? It's still going to end up in an obscene amount either way.</blockquote>


According to <a href="http://www.foxnews.com/politics/2009/02/07/striking-stimulus-deal-lawmakers-eye-finish-line/">this report,</a> there is not a lot going towards infrastructure:



And the House bill provides $36 billion to finance locally issued bonds for school construction, teacher training, economic development and infrastructure improvements, while the Senate bill offers only $22.8 billion.



Let's say that during the resolution of infrastructure spending, the Senate comes up to the $36 billion number the House is recommending. How does that compare to other things in this pork-fest?



Well, looking at <a href="http://article.nationalreview.com/?q=YjcyODIyZGM2MGU1ZDdkNDgxZDc3OTNjYjM4ZDY1ODI=">this article,</a>, I see that $36 billion is about 40% of the $89 billion in increased Medicaid spending provided for under the bill. It's only about 25% of the $145 billion expansion of the "Making Work Pay" extension of the Federal welfare program known as the Earned Income Tax Credit. Of course spending 4 times as much on Federal welfare as we are on infrastructure isn't enough, so the Earned Income Tax Credit program itself is being expanded by another $83 billion.



It looks like the Federal government is doing a pretty good job of stimulating itself while it is at it:



$150 million for the Smithsonian

$34 million to renovate the Department of Commerce headquarters

$500 million for improvement projects for National Institutes of Health facilities

$44 million for repairs to Department of Agriculture headquarters

$350 million for Agriculture Department computers

$88 million to help move the Public Health Service into a new building

$448 million for constructing a new Homeland Security Department headquarters

$600 million to convert the federal auto fleet to hybrids

$450 million for NASA (carve-out for ?climate-research missions?)

$600 million for NOAA (carve-out for ?climate modeling?)

$1 billion for the Census Bureau



This isn't a stimulus bill. It's clearly a sign that the people in Washington simply don't get it.
 
$825 billion is enough to fund complete medical care for every man, woman and child currently alive in the US for 12 years.
 
Louisiana Senator,



Mary Landrieu (D)



is presently asking Congress for



250 BILLION DOLLARS



to rebuild New Orleans .. Interesting number...



what does it mean?





A.



Well... if you are one of the 484,674 residents of New Orleans



(every man, woman, and child)



you each get $516,528.





B.



Or... if you have one of the 188,251 homes in



New Orleans , your home gets $1,329,787.





C..



Or... if you are a family of four...



your family gets $2,066,012.
 
[quote author="awgee" date=1234067625]$825 billion is enough to fund complete medical care for every man, woman and child currently alive in the US for 12 years.</blockquote>


Intuitively that doesn't sound right. There are about 3.05 million people in the US. That would come out to $2,704.92 per person for 12 years of medical care. Or 225.41 per person per year. I just happen to be reading "The Innovator's Prescription - A Disruptive Solution for Health Care" right now. According to it, health care spending has grown from 7% of GDP in 1970 to 16% in 2007. Back of the envelope numbers would put the cost of health care in the US at about $2.3 trillion per year.



Where are you getting your numbers?
 
[quote author="WINEX" date=1234074974][quote author="awgee" date=1234067625]$825 billion is enough to fund complete medical care for every man, woman and child currently alive in the US for 12 years.</blockquote>


Intuitively that doesn't sound right. There are about 3.05 million people in the US. That would come out to $2,704.92 per person for 12 years of medical care. Or 225.41 per person per year. I just happen to be reading "The Innovator's Prescription - A Disruptive Solution for Health Care" right now. According to it, health care spending has grown from 7% of GDP in 1970 to 16% in 2007. Back of the envelope numbers would put the cost of health care in the US at about $2.3 trillion per year.



Where are you getting your numbers?</blockquote>
How much did you spend on health car between the ages of 20 and 35? I spent (total) $2400 over that 15 year span, mostly on one ER visit after eating a bad oyster. 305 million people are not ALL going to be seeing the doctor at once, so they won't all be costing the system money. However, I suspect that "free" healthcare will result in a flood of "just-in-case" doctor visits every time sme sees a pill commercial.



I'm more curious as to where you are getting *your* numbers, as $2.3 trillion seems like an awfully high number.
 
[quote author="Oscar" date=1234077736][quote author="WINEX" date=1234074974][quote author="awgee" date=1234067625]$825 billion is enough to fund complete medical care for every man, woman and child currently alive in the US for 12 years.</blockquote>


Intuitively that doesn't sound right. There are about 3.05 million people in the US. That would come out to $2,704.92 per person for 12 years of medical care. Or 225.41 per person per year. I just happen to be reading "The Innovator's Prescription - A Disruptive Solution for Health Care" right now. According to it, health care spending has grown from 7% of GDP in 1970 to 16% in 2007. Back of the envelope numbers would put the cost of health care in the US at about $2.3 trillion per year.



Where are you getting your numbers?</blockquote>
How much did you spend on health car between the ages of 20 and 35? I spent (total) $2400 over that 15 year span, mostly on one ER visit after eating a bad oyster. 305 million people are not ALL going to be seeing the doctor at once, so they won't all be costing the system money. However, I suspect that "free" healthcare will result in a flood of "just-in-case" doctor visits every time sme sees a pill commercial.



I'm more curious as to where you are getting *your* numbers, as $2.3 trillion seems like an awfully high number.</blockquote>


How much did I spend out of pocket? Or what was the sum of my medical bills? In my case, the total was significantly higher than what you would expect for the typical person in that range. I was involved in an accident that resulted in quite a few surgeries during an 18 month span when I was 30.



In any event, the numbers I am using are (as stated) a quick back of the envelope calculation based on numbers from the book I cited ( The Innovator's Prescription ) You can find the number I am using in the introduction on page xv at <a href="http://books.google.com/books?id=x8KFZD_pnH4C&pg=RA1-PA212&dq;=innovators+prescription&as_brr=0&as_pt=ALLTYPES#PPA15,M1">http://books.google.com/books?id=x8KFZD_pnH4C&pg=RA1-PA212&dq;="innovators+prescription"&as_brr=0&as_pt=ALLTYPES#PPA15,M1</a>



I have no idea of how credible the organization I am about to cite is, but quickly Googling on the topic, I found <a href="http://www.nchc.org/facts/cost.shtml">this link.</a>. From that link:



<em>National Health Care Spending



* In 2008, health care spending in the United States reached $2.4 trillion, and was projected to reach $3.1 trillion in 2012.1 Health care spending is projected to reach $4.3 trillion by 2016.1

* Health care spending is 4.3 times the amount spent on national defense.3

* In 2008, the United States will spend 17 percent of its gross domestic product (GDP) on health care. It is projected that the percentage will reach 20 percent by 2017.1

* Although nearly 46 million Americans are uninsured, the United States spends more on health care than other industrialized nations, and those countries provide health insurance to all their citizens.3

* Health care spending accounted for 10.9 percent of the GDP in Switzerland, 10.7 percent in Germany, 9.7 percent in Canada and 9.5 percent in France, according to the Organization for Economic Cooperation and Development.4

</em>
 
[quote author="WINEX" date=1234074974][quote author="awgee" date=1234067625]$825 billion is enough to fund complete medical care for every man, woman and child currently alive in the US for 12 years.</blockquote>


Intuitively that doesn't sound right. There are about 3.05 million people in the US. That would come out to $2,704.92 per person for 12 years of medical care. Or 225.41 per person per year. I just happen to be reading "The Innovator's Prescription - A Disruptive Solution for Health Care" right now. According to it, health care spending has grown from 7% of GDP in 1970 to 16% in 2007. Back of the envelope numbers would put the cost of health care in the US at about $2.3 trillion per year.



Where are you getting your numbers?</blockquote>
Something that somebody emailed me. It's gotta be true if you read it on the internet.
 
[quote author="WINEX" date=1234059870][quote author="green_cactus" date=1234016903][quote author="awgee" date=1234002264][quote author="No_Such_Reality" date=1233998990]I don't what you expect for $8400/tax filer...



Yes folks, that's what $925,000,000,000.00 comes out to, $8400 for every individual income tax return filed.</blockquote>


I think the senate lowered it to $765,000,000,000. At 3.5 mil optimistically projected created jobs, that is over $218,000 per job.



For any of you out there who think that creating 3.5 million jobs is a good thing, do you think this spending borrowed non-existent money package is the way to create 3.5 mil jobs?



IMO, this plan will "create" less than 500,000 temporary jobs.</blockquote>


It's not fair to just divide the amount by # of jobs created. There are tangible results that arise from this "investment". This needs to be factored in - for example, what is the value of a bridge or a road that gets built? It's still going to end up in an obscene amount either way.</blockquote>


According to <a href="http://www.foxnews.com/politics/2009/02/07/striking-stimulus-deal-lawmakers-eye-finish-line/">this report,</a> there is not a lot going towards infrastructure:



And the House bill provides $36 billion to finance locally issued bonds for school construction, teacher training, economic development and infrastructure improvements, while the Senate bill offers only $22.8 billion.



Let's say that during the resolution of infrastructure spending, the Senate comes up to the $36 billion number the House is recommending. How does that compare to other things in this pork-fest?



Well, looking at <a href="http://article.nationalreview.com/?q=YjcyODIyZGM2MGU1ZDdkNDgxZDc3OTNjYjM4ZDY1ODI=">this article,</a>, I see that $36 billion is about 40% of the $89 billion in increased Medicaid spending provided for under the bill. It's only about 25% of the $145 billion expansion of the "Making Work Pay" extension of the Federal welfare program known as the Earned Income Tax Credit. Of course spending 4 times as much on Federal welfare as we are on infrastructure isn't enough, so the Earned Income Tax Credit program itself is being expanded by another $83 billion.



It looks like the Federal government is doing a pretty good job of stimulating itself while it is at it:



$150 million for the Smithsonian

$34 million to renovate the Department of Commerce headquarters

$500 million for improvement projects for National Institutes of Health facilities

$44 million for repairs to Department of Agriculture headquarters

$350 million for Agriculture Department computers

$88 million to help move the Public Health Service into a new building

$448 million for constructing a new Homeland Security Department headquarters

$600 million to convert the federal auto fleet to hybrids

$450 million for NASA (carve-out for ?climate-research missions?)

$600 million for NOAA (carve-out for ?climate modeling?)

$1 billion for the Census Bureau



This isn't a stimulus bill. It's clearly a sign that the people in Washington simply don't get it.</blockquote>


$64 billion in AMT modifications ... shouldn't you be happy about that one?!?
 
[quote author="green_cactus" date=1234087046][quote author="WINEX" date=1234059870][quote author="green_cactus" date=1234016903][quote author="awgee" date=1234002264][quote author="No_Such_Reality" date=1233998990]I don't what you expect for $8400/tax filer...



Yes folks, that's what $925,000,000,000.00 comes out to, $8400 for every individual income tax return filed.</blockquote>


I think the senate lowered it to $765,000,000,000. At 3.5 mil optimistically projected created jobs, that is over $218,000 per job.



For any of you out there who think that creating 3.5 million jobs is a good thing, do you think this spending borrowed non-existent money package is the way to create 3.5 mil jobs?



IMO, this plan will "create" less than 500,000 temporary jobs.</blockquote>


It's not fair to just divide the amount by # of jobs created. There are tangible results that arise from this "investment". This needs to be factored in - for example, what is the value of a bridge or a road that gets built? It's still going to end up in an obscene amount either way.</blockquote>


According to <a href="http://www.foxnews.com/politics/2009/02/07/striking-stimulus-deal-lawmakers-eye-finish-line/">this report,</a> there is not a lot going towards infrastructure:



And the House bill provides $36 billion to finance locally issued bonds for school construction, teacher training, economic development and infrastructure improvements, while the Senate bill offers only $22.8 billion.



Let's say that during the resolution of infrastructure spending, the Senate comes up to the $36 billion number the House is recommending. How does that compare to other things in this pork-fest?



Well, looking at <a href="http://article.nationalreview.com/?q=YjcyODIyZGM2MGU1ZDdkNDgxZDc3OTNjYjM4ZDY1ODI=">this article,</a>, I see that $36 billion is about 40% of the $89 billion in increased Medicaid spending provided for under the bill. It's only about 25% of the $145 billion expansion of the "Making Work Pay" extension of the Federal welfare program known as the Earned Income Tax Credit. Of course spending 4 times as much on Federal welfare as we are on infrastructure isn't enough, so the Earned Income Tax Credit program itself is being expanded by another $83 billion.



It looks like the Federal government is doing a pretty good job of stimulating itself while it is at it:



$150 million for the Smithsonian

$34 million to renovate the Department of Commerce headquarters

$500 million for improvement projects for National Institutes of Health facilities

$44 million for repairs to Department of Agriculture headquarters

$350 million for Agriculture Department computers

$88 million to help move the Public Health Service into a new building

$448 million for constructing a new Homeland Security Department headquarters

$600 million to convert the federal auto fleet to hybrids

$450 million for NASA (carve-out for ?climate-research missions?)

$600 million for NOAA (carve-out for ?climate modeling?)

$1 billion for the Census Bureau



This isn't a stimulus bill. It's clearly a sign that the people in Washington simply don't get it.</blockquote>


$64 billion in AMT modifications ... shouldn't you be happy about that one?!?</blockquote>


It's clear that even you can't defend this horrid bill when you ask questions like that. But since you asked, I'll try to educate you on the subject.



Not all tax cuts are created equal. A capitalist economy is based on the fact that people tend to work hardest when they have something to gain from their efforts. Working to improve your own lot in life creates benefits for others around you and society benefits based on the actions of self-interested people.



Supply side economics is based on creating conditions that will encourage people to work harder to benefit their lot in life.



Simply putting another bandaid on a tax system that needs to be scrapped is not a good thing.



Our economy can recover from the current conditions that are plaguing it. But our economy might not recover from what government is doing in response to the recession.
 
Winex, from your linked source:



<blockquote>The National Coalition on Health Care's diverse membership is united in support of the following principles as a framework for improving our nation's health care:



Health care coverage for all.

Cost management.

Improvement of health care quality and safety.

Equitable financing.

Simplified administration.



Health care coverage for all is needed to assure quality of care, to improve the health status of Americans, and to enable us to control costs and to simplify the system. It is an essential social policy goal.</blockquote>
I'm not convinced that the numbers provided by a universal health care advocacy group haven't been inflated in order to support their agenda. I'm not accusing them, I just remain unconvinced.
 
[quote author="Oscar" date=1234102566]Winex, from your linked source:



<blockquote>The National Coalition on Health Care's diverse membership is united in support of the following principles as a framework for improving our nation's health care:



Health care coverage for all.

Cost management.

Improvement of health care quality and safety.

Equitable financing.

Simplified administration.



Health care coverage for all is needed to assure quality of care, to improve the health status of Americans, and to enable us to control costs and to simplify the system. It is an essential social policy goal.</blockquote>
I'm not convinced that the numbers provided by a universal health care advocacy group haven't been inflated in order to support their agenda. I'm not accusing them, I just remain unconvinced.</blockquote>


It's always a good idea to be suspicious of anything you hear from a liberal (or liberal organization). Like I said, I knew nothing of the organization publishing the numbers, but they did agree with what I was quoting from "The Innovators Prescription".



Here's a link to something <a href="http://www.heritage.org/Research/HealthCare/hl986.cfm">I just found on Heritage.org</a>. From that article is the following quote: (Note, the article is from 2006)



<em>Take the price of health care. Americans current?ly spend about $1.9 trillion on health care. That's 16 percent of our GDP. What is problematic about this is that health care spending is growing at a rate that poses challenges to the rest of our economy. It is growing more rapidly than the general rate of inflation, for reasons that are not always intrinsi?cally related to the value delivered by the system. In nominal terms, health care spending is growing three times faster than wages, for example, and by 2015, it looks as though we will be spending 20 percent of our GDP on health care. Medicare alone accounts for about an estimated 3.2 percent of this year's GDP and is projected to consume 11 percent of GDP by 2080.</em>



If the 16 percent of GDP number from 2006 quoted by the Heritage Foundation has not grown, you get to the ballpark of the figure I used for my quick estimate based on estimates of 2008 GDP.
 
Again, the amounts are given but no source is cited. While the Hon. Alex Azar II might have been deputy secretary of HHS at the time, he didn't provide a source for his statistics, nor did he provide a breakdown. I don't have any information proving those numbers are wrong, but I still haven;t seen any proof that they are correct either.



Knowing the breakdown would be helpful, because while payments made to doctors and hospitals would qualify, picking up Band-aids at the grocery store may not. Additionally, companies like Microsoft contract with Primera to handle the paperwork, but Microsoft itself pays their employee's actual health costs; does the administrative fee paid to Primera count towards the total spent nationally? What about other health plans, like Kaiser Permanente, who get monthly payments from payroll deductions; are we counting the total sent to them or the total spent by them? How much is Medicare's share of that total? What about cosmetic or elective health care, what proportion of the total goes for breast implants and liposuction?



BTW, Alex Azar now works for Eli Lilly and has a seat on the board of the <a href="http://www.healthcoveragefoundation.org/officers_and_board">Health Coverage Foundation</a>. I'm not calling him a liar, just pointing out that he has a dog in this fight. Considering the Bush administration's contribution to socialized medicine, the Medicare prescription drug plan, I think a real break down of the numbers from an unbiased source is desperately needed. A single sector consuming 16%... you would think it would be more physically evident in society.



Here's what I found, from the <a href="http://www.bea.gov/newsreleases/national/gdp/2009/pdf/gdp408a.pdf">BEA</a>: <strong>2008 GDP was $14.28 Trillion</strong>, and personal consumption of <strong>"Medical Care" was $1.78 Trillion</strong> which is <span style="color: green;">~12.5%</span>, right? For comparison, we're fighting a war on two fronts and the Federal government only spent <strong>$734.3 Billion... TOTAL</strong>... on Defense last year.



So, again... where are the numbers coming from? What is the breakdown? And are we really going to turn over all 12% to a government that paid $1200 for toilet seats and $2300 for wrenches but couldn't manage to equip frontline soldiers with bullet-proof vests?
 
[quote author="WINEX" date=1234100637][quote author="green_cactus" date=1234087046][quote author="WINEX" date=1234059870][quote author="green_cactus" date=1234016903][quote author="awgee" date=1234002264][quote author="No_Such_Reality" date=1233998990]I don't what you expect for $8400/tax filer...



Yes folks, that's what $925,000,000,000.00 comes out to, $8400 for every individual income tax return filed.</blockquote>


I think the senate lowered it to $765,000,000,000. At 3.5 mil optimistically projected created jobs, that is over $218,000 per job.



For any of you out there who think that creating 3.5 million jobs is a good thing, do you think this spending borrowed non-existent money package is the way to create 3.5 mil jobs?



IMO, this plan will "create" less than 500,000 temporary jobs.</blockquote>


It's not fair to just divide the amount by # of jobs created. There are tangible results that arise from this "investment". This needs to be factored in - for example, what is the value of a bridge or a road that gets built? It's still going to end up in an obscene amount either way.</blockquote>


According to <a href="http://www.foxnews.com/politics/2009/02/07/striking-stimulus-deal-lawmakers-eye-finish-line/">this report,</a> there is not a lot going towards infrastructure:



And the House bill provides $36 billion to finance locally issued bonds for school construction, teacher training, economic development and infrastructure improvements, while the Senate bill offers only $22.8 billion.



Let's say that during the resolution of infrastructure spending, the Senate comes up to the $36 billion number the House is recommending. How does that compare to other things in this pork-fest?



Well, looking at <a href="http://article.nationalreview.com/?q=YjcyODIyZGM2MGU1ZDdkNDgxZDc3OTNjYjM4ZDY1ODI=">this article,</a>, I see that $36 billion is about 40% of the $89 billion in increased Medicaid spending provided for under the bill. It's only about 25% of the $145 billion expansion of the "Making Work Pay" extension of the Federal welfare program known as the Earned Income Tax Credit. Of course spending 4 times as much on Federal welfare as we are on infrastructure isn't enough, so the Earned Income Tax Credit program itself is being expanded by another $83 billion.



It looks like the Federal government is doing a pretty good job of stimulating itself while it is at it:



$150 million for the Smithsonian

$34 million to renovate the Department of Commerce headquarters

$500 million for improvement projects for National Institutes of Health facilities

$44 million for repairs to Department of Agriculture headquarters

$350 million for Agriculture Department computers

$88 million to help move the Public Health Service into a new building

$448 million for constructing a new Homeland Security Department headquarters

$600 million to convert the federal auto fleet to hybrids

$450 million for NASA (carve-out for ?climate-research missions?)

$600 million for NOAA (carve-out for ?climate modeling?)

$1 billion for the Census Bureau



This isn't a stimulus bill. It's clearly a sign that the people in Washington simply don't get it.</blockquote>


$64 billion in AMT modifications ... shouldn't you be happy about that one?!?</blockquote>


It's clear that even you can't defend this horrid bill when you ask questions like that. But since you asked, I'll try to educate you on the subject.



Not all tax cuts are created equal. A capitalist economy is based on the fact that people tend to work hardest when they have something to gain from their efforts. Working to improve your own lot in life creates benefits for others around you and society benefits based on the actions of self-interested people.



Supply side economics is based on creating conditions that will encourage people to work harder to benefit their lot in life.



Simply putting another bandaid on a tax system that needs to be scrapped is not a good thing.



Our economy can recover from the current conditions that are plaguing it. But our economy might not recover from what government is doing in response to the recession.</blockquote>


I'm not defending this bill at all nor have I done on any previous posts. And don't waste your time talking to me about supply side economic voodoo - you'll just waste your time on that one.
 
[quote author="green_cactus" date=1234163177]I'm not defending this bill at all nor have I done on any previous posts. And don't waste your time talking to me about supply side economic voodoo - you'll just waste your time on that one.</blockquote>


I didn't say you were defending it. I did say that even you couldn't attempt to defend it. As for teaching you about economics, I believe that Mark Twain said it best. ?Never try to teach a pig to dance. It irritates the pig and is a complete waste of your time.?
 
Doug Noland @ The Prudent Bear -



I have to admit to being bewildered that my "analytical nemeses" over at Pimco have seemingly never been held in higher regard. I?m just waiting for the announcement that Mr. McCulley will be joining the Fed. He?s worked hard for it.



Over the years, Pimco and others have consistently trumpeted policy views that they label "Keynesian." I've tried to offer counter arguments ? and referred to their flawed framework as "Inflationism." Pimco, after all, was the leading public voice espousing massive fiscal and monetary stimulus to ward off the horrible evil of "deflation" after the bursting of the tech Bubble. It apparently didn?t matter that mortgage debt was at the time expanding at double-digit rates, or that a strong inflationary bias was taking hold in our nation?s housing markets, or that "Wall Street finance" was clearly on course for runaway excess.



Not unexpectedly, employing so-called "Keynesian" stimulus to sustain an unwieldy Credit boom ended with disastrous results. The idea may have been for the system to compensate for financial stress and lost output attendant with the bursting of the technology Bubble, but the much greater effect was to stimulate already overheated financial mechanisms and asset markets. The end result was spiking the punchbowl right when the party was getting out of hand ? ensuring terminal late-stage excesses wreaked absolute bloody havoc on system stability. And, you know, back then the "Inflationists" conveniently avoided discussing the myriad downside risks to artificially stimulating the Credit system. Apparently, it was a moot point because the risks associated with "deflation" were so much greater. They were completely wrong on this.



So, fast forward to January 2009. There you go again - Mr. McCulley and Mr. Gross are right out there (the kings of all media) espousing Inflationism (a.k.a. "Keynesianism"). I?m the first to admit that circumstances today are altogether different than 2002. For one, and in contrast to 2002, the Credit and economic systems are today actually in a post-Bubble environment. And most regrettably - and specifically because of the extreme excesses that emanated from an artificially extended boom ? unprecedented government support has been necessary to thwart system implosion. The collapse of Wall Street finance and myriad asset Bubbles has significantly broadened the scope of asset price declines, attendant debt problems and economic disruption. No doubt about any of that. Yet at the same time, and as it was in 2002, I find it regrettable that pundits paint deflation risks as so catastrophic as to not even discuss the risks associated with a full-fledged bout of Inflationism.



I think it?s nuts to advise our policymakers to target asset prices. I think it?s nuts to focus policy on stoking a quick economic recovery. I think its nuts to even ponder the resurrection of the "shadow banks." I disagree with the notion of trying to support prices in the debt securitization marketplace. Wall Street finance ? all the sophisticated securities, the trillion of derivatives, myriad forms of Credit insurance, all the leveraged speculation, and all the nonsense ? is bust and its not coming back as a force for directing finance to ? and inflating prices of ? the asset markets. There is no quick fix here.



The financial sector is a black hole right now. With myriad assets Bubbles having burst, there is an enormous amount of debt today insufficiently backed by asset values. At the same time, there is a tremendous amount of debt backed by households, businesses, municipalities and our federal government. In terminology I have used in the past, the Credit Bubble has left both the Financial Sphere and the Economic Sphere grossly inflated. Total system debt has been severely impaired.



There are enormous risks today associated with systemic reflation. For one, the scope of problem ? the various sectors that could obviously benefit from artificial government stimulus ? is almost unfathomable. There is very real risk at this point that policymaking is about to set course for bankrupting the country. The pundits are out there suggesting trillion dollar economic stimulus; trillions for the banks; hundreds of billions to support the securitization markets; and hundreds of billions more for households, businesses, and municipalities. There is a current need for "Trillions" and future needs for "Trillions" more. Once the Trillions start to flow there will be no easy way to end them.



Policymakers and pundits are in dire need of a framework where some type of "stimulus" cost/benefit analysis is at least attempted. I find the Pimco inflation laundry list without a discussion of costs and risks hard to swallow. At this point, focus on the securitization marketplace is a classic example of "throwing good ?money? after bad." And with mortgage borrowing costs today at historic lows, I don?t believe housing markets should be policymakers' major focus going forward. In short, a focus on rejuvenating asset markets is the wrong course. Housing prices will be in retreat until they find a floor supported by local incomes.



Unfortunately, the protracted Credit boom severely distorted incomes (along with asset prices). With the goal of avoiding national bankruptcy, I suggest that policymakers focus on incomes as opposed to both asset markets and incomes. And the key is promoting sound long-term investment in real economic wealth creation. "Money" created today to artificially inflate asset prices and incomes will simply require more inflationary fuel next year and the year after. The focus instead needs to be on real investment in real things that produce real wealth. Haven?t we seen enough of the Illusion of Financial Wealth? Have we not seen enough to understand that Inflation is the Road to Ruin? Will we allow the Treasury market to go the way of private-label MBS?



- Doug Noland
 
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