Thread: stimulus package

someone wanna tell me why its a good thing?

i dunno, i could use the 1200$, but it will put us in the hole even more...

and they will get the money back in the end thru taxes... so its actually like a loan...

opcorn:

Well I can't say it's all a good thing, but just remember that a portion of the money they're giving us that we're probably going to spend on something gets taxed as in sales tax, etc so some of it comes right back so therefore they didn't actually spend 150 billion, but in any case that's a pretty small drop in the bucket compared with the total national debt, and it's better in your or my pocket than on their pork projects, how's that for a reason why it may help somewhat ?

There are all kinds of interesting facts that surround this idea but the root of it is simple. The most important fact is that the economy is driven by money changing hands. Stagnant dollars sitting in an account someplace do not do as much to stimulate the economy as money that is being spent. Transactions are what is important. That is why we call it an economic slowdown. because the volume of transactions is slowing.

A study by the U.S. Treasury Department discovered that a dollar that is taken in taxes and spent by the government circulates through the economy an average of only four times before retirement. A dollar that remains in the private sector circulates an average of about ten times. This is likely because of the way that our government loves to put money into the hands of the rich elite to make them richer. But that is another discussion altogether.

In the end it is desirable to keep as much wealth in the hands of the lower and middle class as possible. They are the ones that have little to spare so they spend it instead of sitting on it. They drive the economy. The more that the wealth works its way up to the top and stays there, the more our dollars do not work for us and just stagnate.

Sending the money out of our country is the biggest problem we have right now. Our labor and capital is being spent to invest in other economies instead of our own. Buying Chinese goods has not kept the wealth of America working for Americans. Instead it has funded the buildup of the Chinese economy and the Chinese military. That is where my concern lies. If we continue to just spend our rebate buying Chinese goods the stimulus package will do more to stimulate China than it does for America.

Your right, unless most of the money goes toward buying American made products I can't see how it's going to stimulate our economy all that much or if it does it will be rather temporary.

If we really want to stimulate our spending on "American" made products, then we need to have some sort of temporary measure to make American made procucts look more attractive to purchase as well as having some extra money right ?

I don't have the answers either, it's complicated and buried in world politics, but why don't we do something like if you buy an American made, manufactured car here in the states only, no tax - but all oother foreign made/manufactured cars will continue to have to pay the current tax, that ought to spark some interest in an American made product ?

What do you think about that ?

Originally Posted by The_Bear

someone wanna tell me why its a good thing?

Here we go again, instead of the markets being allowed to run their natural course, we have politicians trying to play God.
http://www.politibyte.com/modules.php?name=News&file=article&sid=43

No one wants a recession, but, every market has its peaks and valleys. Remember the crash of 1987, that was followed by one of the biggest run ups in history. Who is to say a recession now would not be a great buying opportunity?

Four weeks ago the Democrats were complaining that Bush has spent us into bankruptcy with the war in Iraq. Now all of a sudden we can come up with $150 billion to spark the economy? Where is this money going to come from? I thought we were broke?

Wake up America. Politicians are spending your money in order to get themselves elected. Doesn't everyone see the hypocrisy of this?

Originally Posted by spud438

Here we go again, instead of the markets being allowed to run their natural course, we have politicians trying to play God.
http://www.politibyte.com/modules.php?name=News&file=article&sid=43

No one wants a recession, but, every market has its peaks and valleys. Remember the crash of 1987, that was followed by one of the biggest run ups in history. Who is to say a recession now would not be a great buying opportunity?

Four weeks ago the Democrats were complaining that Bush has spent us into bankruptcy with the war in Iraq. Now all of a sudden we can come up with $150 billion to spark the economy? Where is this money going to come from? I thought we were broke?

Wake up America. Politicians are spending your money in order to get themselves elected. Doesn't everyone see the hypocrisy of this?

Whose money do you think they are spending 100% of the time? Isn't that what we hire them to do? I want them, that's right, want them, to spend our money to keep people fed, healthy, housed, working--can't imagine a better thing to keep 'em busy at. It's those politicians who wouldn't help save the populace from suffering that I want to get rid of.

Originally Posted by Guyker

Whose money do you think they are spending 100% of the time? Isn't that what we hire them to do? I want them, that's right, want them, to spend our money to keep people fed, healthy, housed, working--can't imagine a better thing to keep 'em busy at. It's those politicians who wouldn't help save the populace from suffering that I want to get rid of.

the money our government is collecting from us was spent decades ago. i do not understand why the population in this contry thinks this rebate is our cash. our government is just as strapped for cash as the people getting this mone. our country is trilions of dollars in debt!!! this is simply a scheme to launder money for the richest of the rich. if we spend the money ends up in the hands of the financiers of our country. the best stimulus package would be to eliminate income tax. BTW can anyone out there site the statute that mandates the citizens of this country pay income tax?
I wonder what the government and bankers in this country would do if everybody went exempt on their w4 for a year. do you suppose they would come arrest everyone?

Originally Posted by shadow2008

Your right, unless most of the money goes toward buying American made products I can't see how it's going to stimulate our economy all that much or if it does it will be rather temporary.

If we really want to stimulate our spending on "American" made products, then we need to have some sort of temporary measure to make American made procucts look more attractive to purchase as well as having some extra money right ?

I don't have the answers either, it's complicated and buried in world politics, but why don't we do something like if you buy an American made, manufactured car here in the states only, no tax - but all oother foreign made/manufactured cars will continue to have to pay the current tax, that ought to spark some interest in an American made product ?

What do you think about that ?

the risk of following this course of action is that other governments will also manipulate their taxes accordingly, and will set off a tariff war; so any product made in America or from America that you wish to sell will find just as big of a taxer in the government of china.

Although, I do think that tariffs are necessary, but we need the use of science to rebuild our manufacturing sector.

Originally Posted by Thunderstorm Patriot

There are all kinds of interesting facts that surround this idea but the root of it is simple. The most important fact is that the economy is driven by money changing hands. Stagnant dollars sitting in an account someplace do not do as much to stimulate the economy as money that is being spent. Transactions are what is important. That is why we call it an economic slowdown. because the volume of transactions is slowing.

A study by the U.S. Treasury Department discovered that a dollar that is taken in taxes and spent by the government circulates through the economy an average of only four times before retirement. A dollar that remains in the private sector circulates an average of about ten times. This is likely because of the way that our government loves to put money into the hands of the rich elite to make them richer. But that is another discussion altogether.

In the end it is desirable to keep as much wealth in the hands of the lower and middle class as possible. They are the ones that have little to spare so they spend it instead of sitting on it. They drive the economy. The more that the wealth works its way up to the top and stays there, the more our dollars do not work for us and just stagnate.

Sending the money out of our country is the biggest problem we have right now. Our labor and capital is being spent to invest in other economies instead of our own. Buying Chinese goods has not kept the wealth of America working for Americans. Instead it has funded the buildup of the Chinese economy and the Chinese military. That is where my concern lies. If we continue to just spend our rebate buying Chinese goods the stimulus package will do more to stimulate China than it does for America.

Even money that is in an account somewhere is involved in transactions. It is not like the money is locked in a vault. It get's loaned to people and businesses who spend it.

No matter where the money is it is being spent. The question is really where should it best be spent to stimulate the economy.

In the past our economy was largely manufacturing and we needed consumers to buy all the stuff that was manufactured. If you give people money who would buy stuff and it would stimulate the economy.

Now we need to ask what part of the economy is faltering and do we want to prop it up with false supports (a stimulus package that supports that sector) or support the part of the economy that will be the new economic driver and hasten the new vigorous economy that will be here either sooner or later.

The change is inevitable the question is do we want a slower change or a faster change. A slower change will allow people in the faltering industries time to adjust and to get new jobs. A faster change will allow the new more productive industries to grow at a faster pace and hire people faster.

My opinin is that our politicians are not qualified to tinker with the subtle changes in the economy and they should let Adam Smiths invisible hand do the tinkering much more efficiently. The politicians should not be playing around with the economy but making sure that while it changes those who are able to adapt do so without hurting those who have trouble adapting. If they do this they will have their hands full.

(btw, how many of you share the uncertain suspicion that the politicians like these economic changes (and even nudge them along) because they are the very one's who are taking advantage of those who have trouble adapting?)