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A MUST-READ Argument Against the Stimulus
Submitted by chemjeff on Wed, 01/28/2009 - 14:54
Or, as it should be more appropriately known, the Generational Theft Act of 2009.
From The Corner, with charts and all!
Bottom line: This bill is a huge step towards European-style social democracy. You know, the kind that has permanent 10% unemployment rates.
(3 votes)
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Comments
A question about markets
I've heard often that what makes sense for the individual consumer (to pay off debt, save money and not spend) is collectively a negative for our nation (goods aren't being purchased).
My question is, why is paying off debt not equal to purchasing new goods? Surely, the companies who own the debt will take that money and contribute it somewhere else? What is the belief behind government-mandated spending to keep our economy running?
What is the biggest problem about a 'big freeze' as it were? Unemployment rates soaring as companies go out of business? Lack of willingness to produce when the economy rights itself?
debt
I'm not an economist but my hunch is that banks won't use the money to invest, but instead will use it to deleverage - to pay down their own debt.
Right but
All that money is going to debt... someone has to be holding the debt, correct? Or does it just not matter anymore because of all the 'play-money' the idiots with CDS were throwing around?
I just find it mind-boggling. I can understand the idea that sometimes, what's best for each individual is not good for the group as a whole (A Beautiful Mind pointed out why that is pretty well). But conservative economics are based off the mindset that, for the most part, what's good for the individual is good for the economy. Obviously, they'll have to stress further after this in which areas that applies, and the exceptions.
See if this makes sense
Debt is a claim against future productivity.
An interest rate is the price of money.
Paying down debt does nothing to increase productivity; it does, however, free future claims on productivity.
LnGrrrR
corporations run a debt load all the time. they do it, because it allows them to run on future money, that hasn't come in yet (accounts recievable, etc). Because they can say "I'll have the money in a quarter", and get a loan for it NOW, they have a quarter's time to invest it. There is a monetary value to time.
Is this making sense?
Slightly
I mean, I understand it, but it doesn't make much sense to me. You'd think companies would have, you know, at least a paycheck of each employee a month out. Just in case they couldn't get any credit, ya know?
the companies that did that
got bought out by the people who were willing to spend that paycheck's worth on buying a new company. ;-)
A friend of mine had to stave off a hostile takeover within the past three months. lotta work, that. lotta lawyer fees too.
Sheesh
Retarded, I tell you. I've always found it stupid that, if you save and buy everything with cash, you're less trustworthy (have less credit) than someone who purchases beyond their means. That bass-ackwards logic is what gets us into trouble in the first place.
i like my credit card
I always have the money reserved to pay for it, and it means that i get more-than-half-a-month's interest on every bill. ;-)
Yeah, it is backasswards, but the benefit is that having a late library book doesn't get you instant 30% interest rate on your credit card (bank of america deserves to DIE. using our american taxpayer money to punish its consumers)
That's why I get lots of small loans
I have a credit card as well, but only for small purchases. I'm going to build up my wife's credit by purchasing small items (like, bedroom furniture sets for $1000). I still think the system is stupid, though. :D
*chokes*
you think spending a thousand dollars is small???
rofl.
I've made one purchase of that size in the past four years (been lucky with computers, what can I say?)
Plus, I am cheap. Binbo!
Relatively speaking
The only thing I usually get loans for are cars. As stated above, I don't normally take out loans. So $1,000 is a 'small' loan for me. Besides, I don't think her credit will build up on anything less than that.
Thinking back on it... I've made purchases close to 1,000 in the past few years, but not over. (Bought a computer for 950, and a couch set for 900.)
My last purchase that wasn't a car, that was over a grand, was the big screen projection TV I purchased after I got back from a deployment in 2002. It's huge, but I'm keeping it until it breaks. :D
credit builds up based on the amount of credit that you
aren't using (and consistent payment of your bills, naturally). so someone with a 3k credit limit, who only uses $100 a month, and pays off regularly, has a lower credit score than someone with a 5k limit who has the same bills.
Interesting
I knew that more than two credit cards were bad, but not having any is also bad. I've only got a 5K limit one myself. I maxed it out once (issues with a roomie), and hope to never have it high again.
It's not more than two, I'm given to understand
It's getting too many too close to one another. check out consumerist for more details, I'm sure they've got some.
Hmph
I know nothing about that. :) I'm military, so I have extra incentive to keep my finances straight. And I've never met a car dealer that didn't love a military person, so it's never been a big issue. :D
you have GOT to get the military credit union membership
(the one that only accepts active duty members). it has fantastic customer service.
Don't think I've heard of that
Unless you're talking about USAA, of course. They rock. :D I'll look it up on teh googlez.
aah! that'd be the one.
hope i saved you a google. ;-) most military don't know about it till they don't qualify anymore.
Oh don't worry
Us military make sure to mention it to each other. And yes, they are pretty outstanding. I've got everything but my car insurance through them right now, and will probably move that over soon enough. :D And I bank with a military FCU.
Thanks for helping look out for me though!
listen the stimulus is going to pass
at the end of the day the Democrats can do it alone and have said they will.
What I am focusing on is, ok then what? AFTER the economy stabilizes and we are back on track NOW is the time for our leaders to start ACTUALLY committing to balancing our budget and cutting spending!
its time to be honest and realize its going to pass, Republicans esepically fiscal conservatives should start the talks now
ok after the economy stablizes, there can be no more if ands or buts, its time for the Federal government to scale back. we waste our time fighting against it, they will pass and the current GOP leadership are only playing games and politics.
any real fiscal conservative, should immediately be demanding our leaders pledage to start balancing and cutting as soon as we recover.
becaues i am afraid the second we recover and start having a surplus again, if we haven't gotten them locked by then or gotten new leadership, guess what?
more new spending!
stimulus
Oh I know it's going to pass. The real question for me, now, is to hope that it gets zero Republican votes, because it's not really stimulus.
Welcome to the Democratic Party.
Oh and guess what, we aren't going to have a surplus for a very long time.
yes, I know its why i have left the Democratic party
difference is, the government doesn't have a busy in social issues, and should keep kept out of them whever possible.
social welfare is well meaning, but we don't have the funds to help everyone we'd want to and we shouldn't either or they will come to rely on it.
Social Security was suspose to be a supplement, but I work at a bank, alot of people now, if it weren't for SS they would have nothing. they now depend on the system.
but social conservatives trying to bring the government in for their own social policy issues are no different.
social security has been drained to death
by deflated inflation statistics. deliberately, since Reagan, they have watered down the payments each year and each president.
Social Welfare has done us much good. Rural electrification didn't exactly make many people dependent on anything.
the Dark Side of the Force
Good for you! You've finally seen the power of the Dark Side.
10% unemployment is well under what we are at now
if you use the U6. It ain't exactly EUROPE's problem if WE lie about our statistics. FDR's statistics were straight and level. Ever since LBJ, they ain't been right.
ARGG!! Person quoted has no conception of Public Safety
choosing to treat IT improvements as gov't handouts. I tell you, you gave me the medical records for enough people, and by gum we'd find Patient Zero a lot faster.
I actually see most of that being rolled back, if we can get California up and running again. But that's a really big IF. FIRE sucks, don't it?
$2 million of that money that he says won't be spent quickly will be spent quickly. Right here in PA. Cost overruns being paid for by the feds. I don't know how many of the other projects are like this one, but I'd guess a few. PA put off a lot of roadwork in the past year due to lower tolls on the Turnpike. These are also shovel ready programs.
Improving schools is a boon for the construction industry, one of the hardest hit here.
The Pell grants would have the effect of removing low-wage single earners from the economy. I have no way of telling whether this would be a good thing or not. Your thoughts?
I'd really like to see what the other education spending is like, as that looks like it might be cuttable, or better suited for its own bill -- with longer consideration. If this is just subsidizing states like NY and CA, I don't have much problem with it (bankrupt states are a bad thing). If it's more than that, then I'm going to want more details.
CA refuses to tax itself
CA refuses to raise their taxes to pay for what they need to, its CA they have hollywood right there how are they running out of money?
why should the other 49 states pay for CA, when CA doesn't want to pay for CA?
Uh, no.
California's problem is not a lack of tax revenue. California's problem is unrestrained spending growth. The state's budgetary woes could be solved tomorrow merely by adopting the FY2004 budget as the FY2009 budgeet.
california's main economy these past fifteen years
has been dotcom boom and FIRE (real estate in this case).
Both are dead. California is the world's tenth largest economy. If we don't subsidize them, well, Japan just might. That's how bad it is if Cali stops spending, as most of SoCal has.
pell grants
They may, or they may not. Since Pell grants alone rarely cover the entire cost of college, they may simply encourage more people to go to college and hence pick up more part-time jobs to pay for the balance of the tuition. But that's besides the point anyway because that's not why the Democrats put them in the bill.
bailing out the states
Wow I hope the governor and legislators of my state are reading this. See, folks, all you gotta do is spend yourselves into bankruptcy, and then go begging to the federal government for a bailout. And you can count on the support of good people like Rising Tide to back your irresponsible spending habits.
haha. yesh, i'd rather have them not go bankrupt
and I'd rather have every state have a rainy day fund. But that wouldn't be effective in a free market, so why should it be incentivized for government?
imagine the possibilities
The same could be said of about 90% of the bill. It isn't a fiscal stimulus bill, it is a laundry list of 40 years' worth of Democratic wishes.
Really, can you imagine what the outcry would be if the Republicans had tried to pull a stunt like that? Imagine if Republicans had attempted an "economic stimulus package" that:
Oh and it decided to fund a few bridges and power grids too. And all on borrowed money of course. The Democrats and the MSM would be going absolutely apeshit. Yet that is essentially what the Democrats are doing, roles reversed. They are implementing their entire policy agenda in one huge bill justified as an "emergency" "stimulus" package. It is cynical and just plain wrong.
And the truly frightening part is, this is just a down payment. They will be back for more.
Yes, but Boehner & the House Republicans didn't do that,
AND, didn't make a coherent case that it wasn't needed.
When the party gets down to its last few states in the Mormon Triangle, someone might get the idea once again that to win, you have to have CONSTRUCTIVE alternatives
The bill was going to pass regardless.
IMO this is about the best outcome that House Republicans could have hoped for. I actually think Boehner has done a great job so far with this bill. He knows the Democrats have the votes to do whatever they want. Quite frankly, Boehner should be commended for not buying into Obama's post-partisanship BS. Boehner's strategy thus far is to make it perfectly clear what exactly it is that the Democrats are attempting to do, and it's not stimulus. And people are starting to pick up on it. There is still majority support for the bill but it's not the overwhelming 70+% that it was earlier. I am sensing a bit of a momentum swing. Now we know why Obama and Pelosi wanted to rush this thing along, so that they could get it all implemented before anyone caught on to their bait-and-switch strategy. Now the debate goes to the Senate where I'm hoping there is a very long and drawn-out discussion, so that our favorite Senators (DeMint? Coburn? You listening?) can get lots of facetime opposing the Democratic wish-list garbage in the bill.
The only thing this bill is meant to stimulate is the Democratic Party base.
Of course, but I'm concerned about winning elections. . . .
n/t
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