Stimulus Money

[kennedy]

Well thank you stellarfun, I had to learn languages in the service, and my fluency greatly improved over the years of living here. It is quite interesting that you were permitted to gift novels to soviet citizens, especially in the presence of party minders. I also suppose your interaction with the planning and construction bureaucracy has given you insight into current economic and political mess behind the Big 3 or perhaps Massachusetts' plight. I must also congratulate you for obtaining a Doctorate in patience.

...

Hasn't anyone bothered to notice that Japan had the same economic problems in the early 90s, tried the same public sector spending, and government life support of effectively dead companies? The zombie corporations created as a result, proceeded to literally eat the brains out of the economy for years afterward! It didn't work then, and it won't work now. Why anyone is even considering a new stimulus now, effectively throwing more money into a fire-pit, instead of actually figuring out a strategy avoiding all known and proven mistakes, is beyond me. Do economists not study economic history or something like that?

So, Lurker is from the USSR? And Stellarfun went to the USSR?

Economy: Lurker, in your opinion, what is the government's best option to help the economy rather than "throwing money into a fire-pit?"

 

[Lurker]

No more pay raises for Congress that aren't linked to inflation.

No bailout

No stimulus money

Infrastructure funding only to maintain existing construction which is in dire need of repair

Repeal S.Ox, as it has proven ineffective and a huge financial burden on the economy

Eliminate the capital gains to encourage investment

Allow people to renegotiate their mortgages into 40-50 year terms at a lower interest rate such that the banks will get the entirety of their money back, just over a longer period of time with a more overall accrued interest. Meanwhile the homeowners could make the lower payments, even though it would mean they'd pay a lot more in interest over time.

Eliminate the CRA

Eliminate farm subsidies

Provide enough people to enforce existing financial laws

Require greater transparency in hedge funds

Prevent large bank mergers, allow smaller banks to network, but prevent large near monopoly institutions. Smaller banks allow for more redundancy in the system. Force AIG and others to break up into smaller units, such that segments of the companies may fail without killing the whole enterprise.

Break up the government monopoly of FannieMae/Freddy Mac into smaller banks or eliminate them entirely

Enforce the borders, deport illegals, punish employers whom don't follow the law, reform immigration to make it faster and fairer for skilled workers instead of happy feel good diversity crap. This would raise wages for the poor, provide them with ample job opportunities, and allow us to remain a big brain drain on the rest of the world. It would also dramatically cut the outflow of money from our economy in the form of remittances and spending on social services to those whom do not pay taxes.

Drastically cut overall government spending and attempt to dramatically reduce the percentage of national debt held by China.

Get rid of public sector unions and pension systems. Work rules, pay not related to performance, retirement prior to 65, multiple pensions, overgenerous and underfunded pension liabilities, are making the public sector a bigger joke than the Big 3.

Pass a Constitutional Amendment requiring spending to not increase greater than inflation and revenue increases from existing taxes of the current year. Colorado has a similar law and it helps dramatically in keeping spending in check.

Pass a Constitutional Amendment stating that bills can not have legislation inserted in them which have nothing to do with the title. This will prevent bundling of spending on bridges to nowhere within bills that are supposed to be about defense or education spending. The Confederate States of America had this in their Constitution as it was already known in the 1860s that politicians would bundle spending into vote and veto proof bills to get what they wanted.

Pass Term limits, the longer people spend in one office, the more detached from reality they become.

Introduce a flat or consumption tax in place of the income tax

Pursue and pass free trade with the entirety of South America

All of the above energy approach; dill baby drill, Bob Zurbin's flex fuel mandate for combustion powered automobiles & go green energy tax initiatives. Breaking the back of OPEC would help the global economy tremendously.

 

[TheRifleman]

No more pay raises for Congress that aren't linked to inflation.

No bailout

No stimulus money

Infrastructure funding only to maintain existing construction which is in dire need of repair

Repeal S.Ox, as it has proven ineffective and a huge financial burden on the economy

Eliminate the capital gains to encourage investment

Allow people to renegotiate their mortgages into 40-50 year terms at a lower interest rate such that the banks will get the entirety of their money back, just over a longer period of time with a more overall accrued interest. Meanwhile the homeowners could make the lower payments, even though it would mean they'd pay a lot more in interest over time.

Eliminate the CRA

Eliminate farm subsidies

Provide enough people to enforce existing financial laws

Require greater transparency in hedge funds

Prevent large bank mergers, allow smaller banks to network, but prevent large near monopoly institutions. Smaller banks allow for more redundancy in the system. Force AIG and others to break up into smaller units, such that segments of the companies may fail without killing the whole enterprise.

Break up the government monopoly of FannieMae/Freddy Mac into smaller banks or eliminate them entirely

Enforce the borders, deport illegals, punish employers whom don't follow the law, reform immigration to make it faster and fairer for skilled workers instead of happy feel good diversity crap. This would raise wages for the poor, provide them with ample job opportunities, and allow us to remain a big brain drain on the rest of the world. It would also dramatically cut the outflow of money from our economy in the form of remittances and spending on social services to those whom do not pay taxes.

Drastically cut overall government spending and attempt to dramatically reduce the percentage of national debt held by China.

Get rid of public sector unions and pension systems. Work rules, pay not related to performance, retirement prior to 65, multiple pensions, overgenerous and underfunded pension liabilities, are making the public sector a bigger joke than the Big 3.

Pass a Constitutional Amendment requiring spending to not increase greater than inflation and revenue increases from existing taxes of the current year. Colorado has a similar law and it helps dramatically in keeping spending in check.

Pass a Constitutional Amendment stating that bills can not have legislation inserted in them which have nothing to do with the title. This will prevent bundling of spending on bridges to nowhere within bills that are supposed to be about defense or education spending. The Confederate States of America had this in their Constitution as it was already known in the 1860s that politicians would bundle spending into vote and veto proof bills to get what they wanted.

Pass Term limits, the longer people spend in one office, the more detached from reality they become.

Introduce a flat or consumption tax in place of the income tax

Pursue and pass free trade with the entirety of South America

All of the above energy approach; dill baby drill, Bob Zurbin's flex fuel mandate for combustion powered automobiles & go green energy tax initiatives. Breaking the back of OPEC would help the global economy tremendously.

Pretty common sense if you ask me. Too bad it's political Suicide for our politicians.

 

[Chessplayer]

Much of this feels like "common sense" because it treats the govt. as a single consumer, trading true macroeconomic policy for micro principles on a macro level. Actual macro policy is difficult to understand and easy to misunderstand; thus it's tempting for laymen to advocate the easy solution.

Anyway. Libertarians are pissing into the wind - (almost) none of this is going to happen.

 

[kennedy]

Allow people to renegotiate their mortgages into 40-50 year terms at a lower interest rate such that the banks will get the entirety of their money back, just over a longer period of time with a more overall accrued interest. Meanwhile the homeowners could make the lower payments, even though it would mean they'd pay a lot more in interest over time.

Prevent large bank mergers, allow smaller banks to network, but prevent large near monopoly institutions. Smaller banks allow for more redundancy in the system. Force AIG and others to break up into smaller units, such that segments of the companies may fail without killing the whole enterprise.

Break up the government monopoly of FannieMae/Freddy Mac into smaller banks or eliminate them entirely

Enforce the borders, deport illegals, punish employers whom don't follow the law, reform immigration to make it faster and fairer for skilled workers instead of happy feel good diversity crap. This would raise wages for the poor, provide them with ample job opportunities, and allow us to remain a big brain drain on the rest of the world. It would also dramatically cut the outflow of money from our economy in the form of remittances and spending on social services to those whom do not pay taxes.

Drastically cut overall government spending and attempt to dramatically reduce the percentage of national debt held by China.

Get rid of public sector unions and pension systems. Work rules, pay not related to performance, retirement prior to 65, multiple pensions, overgenerous and underfunded pension liabilities, are making the public sector a bigger joke than the Big 3.

Introduce a flat or consumption tax in place of the income tax

Pursue and pass free trade with the entirety of South America

All of the above energy approach; dill baby drill, Bob Zurbin's flex fuel mandate for combustion powered automobiles & go green energy tax initiatives. Breaking the back of OPEC would help the global economy tremendously.

Renegotiate Mortgages: And put people in deeper debt for longer time?

Large Banks: Large companies provide many more benefits to our society than they hamper it.

Deportation: Reform immigration laws, allow current illegals to obtain visas is the path I'm thinking would lead to the largest base of unskilled workers, to power the new manufacturing sector America needs to develop.

Reduce China Debt: Hmm...sounds nice, but how do you propose we radically cut gov't spending? To start, I'd say help create a stronger domestic economy (save the Big 3, jobs programs, stimulus programs) and get the hell out of Iraq and close worthless overseas bases.

Eliminate Unions: Fer chrissakes, YES!

Eliminate Income Tax: So you propose that we have more money to spend on more expensive goods to put on our credit cards, to pay off for an even longer period?

Free Trade: With dusty old politicians, it'll never happen. I like your term limit approach.

Energy: Drilling is not the answer, we can break OPEC's back permanently with sustainable energy sources.

 

[Lurker]

Renegotiate Mortgages: And put people in deeper debt for longer time?
The debt isn't going away, making payments manageable is the fairest way to resolve the current crisis without burdening the responsible taxpayers who didn't get in over their heads


Large Banks: Large companies provide many more benefits to our society than they hamper it.
Normally yes, however splitting up the banks into smaller entities allows them to be more resilient to massive failures which drastically affect the economy.

Deportation: Reform immigration laws, allow current illegals to obtain visas is the path I'm thinking would lead to the largest base of unskilled workers, to power the new manufacturing sector America needs to develop.

Manufacturing isn't happening here unless it is automated. It is terribly inefficient to use manual labor and people hate doing mechanical actions over and over for minimal pay. There also really isn't a need for foreign unskilled labor, its use is merely a way to circumvent the minimum wage.

Reduce China Debt: Hmm...sounds nice, but how do you propose we radically cut gov't spending? To start, I'd say help create a stronger domestic economy (save the Big 3, jobs programs, stimulus programs) and get the hell out of Iraq and close worthless overseas bases.

If you don't think all the increased domestic spending since 2000 is without programs to cut, you need some glasses. Government spending and bs stimulus checks DON'T CREATE JOBS, they merely kick the economic can down the street by leveraging debt and taking money from successful private sector jobs and redistribute it to create temporary boondoggle jobs. If the government left that money in the hands of taxpayers the economy would recover FASTER, if you don't believe me do research into why the Great Depression was great. FDR's New Deal spending prolonged the depression six years! We are leaving Iraq rather victoriously at this point and as far as the worthless overseas bases we should close, NATO is complaining about what that'll do to their economies.

Eliminate Unions: Fer chrissakes, YES!

Glad we agree, Unions as they operate right now are extortionist labor cartels and should be treated as such.

Eliminate Income Tax: So you propose that we have more money to spend on more expensive goods to put on our credit cards, to pay off for an even longer period?

Goods cost more, people have more money to spend, in the end it works out to be the same. The difference is that there aren't tax shelters, everyone pays an equal amount, and the system is far simpler, thus more efficient to operate.

Free Trade: With dusty old politicians, it'll never happen. I like your term limit approach.

Free trade and elimination of farm subsidies would drastically improve economic conditions in third world countries and the mutual trade would benefit us significantly.

Term limits are direly needed given the entrenched political class which has developed in this country which has little regard for their constituents most of the time.

Energy: Drilling is not the answer, we can break OPEC's back permanently with sustainable energy sources.

Drilling, like war is not an answer, it is part of a lengthy process which eventually leads to a resolved problem. We need more energy from all sources. Keeping oil prices low keeps more money in our domestic economy, a commitment to flex fuel, and the development of green technologies would eventually allow us to be energy independent.

 

[Lrfox]

This story could PROBABLY go anywhere on this forum but seeing as it's pertinent to stimulus money and Obama, I'll post it here. Mods, feel free to move it to wherever you see fit (even a new thread?).

From Bloomerg.com

(the image on the article is a shot of the Boston's Green Line)

Rail Takes Back Seat as States Target Obama Stimulus for Roads

By Heidi Przybyla

Dec. 24 (Bloomberg) -- Missouri?s plan to spend $750 million in federal money on highways and nothing on mass transit in St. Louis doesn?t square with President-elect Barack Obama?s vision for a revolutionary re-engineering of the nation?s infrastructure.

Utah would pour 87 percent of the funds it may receive in a new economic stimulus bill into new road capacity. Arizona would spend $869 million of its $1.2 billion wish list on highways.

While many states are keeping their project lists secret, plans that have surfaced show why environmentalists and some development experts say much of the stimulus spending may promote urban sprawl while scrimping on more green-friendly rail and mass transit.

?It?s a lot of more of the same,? said Robert Puentes, a metropolitan growth and development expert at the Brookings Institution in Washington who is tracking the legislation. ?You build a lot of new highways, continue to decentralize? urban and suburban communities and ?pull resources away from transit.?

In proposing a stimulus plan that could total as much as $1 trillion, Obama has promised a new federal infrastructure program that would dwarf President Dwight Eisenhower?s interstate highway system that began in 1956. Obama told reporters at a Dec. 7 news conference that his effort would go beyond ?roads and bridges? and fund more innovative projects.

Fiscal Shortfalls

His plans are colliding with deep fiscal shortfalls among states with a backlog of road-building needs and pressure from lawmakers to use his economic recovery package mainly for ?ready to go? projects that will immediately bolster the economy.

Highway construction advocates say numerous projects are needed because of years of neglect of the nation?s infrastructure. Along with new roads, these include resurfacing existing ones and guardrail installation. As evidence of the economic impact of such work, they cite President Ronald Reagan?s $12 billion investment in federal highways during the 1982 recession that created 700,000 jobs by 1985.

Caterpillar Inc. executives have said the U.S. needs as much as $700 billion in road, port and airport investments to remain competitive with countries like China. The largest maker of construction equipment stands to see a boost from the spending plan, along with rival Deere & Co., crane makers Terex Corp. and Manitowoc Co., and material producers U.S. Steel Corp. and Olympic Steel Inc.

Little Oversight

Members of Congress and some officials with the incoming administration are moving toward legislation that gives states funds through existing formulas that provide little oversight to ensure the spending fits into a broader plan to modernize the nation?s infrastructure grid and promote energy efficiency, according to several lobbyists and congressional aides.

?We like the environmentally friendly way of doing things but the charge we were given was to come up with something that can happen quickly,? said Jim Berard, a spokesman for House Transportation and Infrastructure Committee Chairman James Oberstar, a Minnesota Democrat. ?We can?t lose sight of what the primary goal here is, and that is to put people to work.?

Urban planners and mass transit advocates say that approach may undercut Obama?s goal of more innovation in upgrading the nation?s infrastructure.

?Bad Projects?

?The fear is that you would begin a bunch of bad projects that would have to be funded all the way,? said Petra Todorovich, director of the New York-based America 2050, a coalition of transportation officials and civic, business and environmental groups. That would make it ?a lot harder to make the big investments needed to build high-speed rail and public transit.?

Advocates of surface-road and highway building say these projects would prove environmentally friendly because they would help relieve congestion.

The U.S. Department of Transportation has identified 220 bottlenecks that significantly increase the number of vehicles idling in traffic. ?If you can eliminate the congestion, you can dramatically reduce greenhouse-gas emissions,? said Jeff Solsby, a spokesman for the Washington-based American Road and Transportation Builders Association.

The Missouri plan reflects the current needs of the state, where 90 percent of travel is by cars on highways and roads, said Sally Oxenhandler, a spokeswoman for the Missouri Department of Transportation.

?Strike a Balance?

?We had to take a look at the needs and strike a balance, and also look at projects that we had ready to go in 180 days,? she said.

Polly Trottenberg, director of Building America?s Future, a Washington-based group promoting innovation in infrastructure improvements, counters that ?there are plenty of projects that can put Americans back to work immediately and also start the transformation that is needed.?

Her organization and other groups have pinpointed $16.5 billion in mass-transit projects on which work can start within a year, and in many cases within four months.

In Europe and Southeast Asia, governments are investing tens of billions of dollars in high-speed rail projects that include systems designed for the rapid transport of merchandise. Proponents of a new approach to transportation in the U.S. are pushing for the stimulus package to fund similar projects.

They also are backing a provision in the stimulus legislation that would require states to spend funds on maintenance before building new roads. And they also want to direct funds to metropolitan planning authorities and to create a national oversight group to help coordinate the spending.

This could be similar to President Franklin D. Roosevelt?s creation of a national resources planning board during the New Deal that developed long-range plans for infrastructure spending, Todorovich said. It laid the groundwork for the interstate highway system 20 years later.

To contact the reporter on this story: Heidi Przybyla at hprzybyla@bloomberg.net.

link: http://www.bloomberg.com/apps/news?pid=20601109&sid=aV2SxqQRuOFw&refer=home

"Advocates of surface-road and highway building say these projects would prove environmentally friendly because they would help relieve congestion."
...when will they learn?

 

[stellarfun]

This story could PROBABLY go anywhere on this forum but seeing as it's pertinent to stimulus money and Obama, I'll post it here. Mods, feel free to move it to wherever you see fit (even a new thread?).

From Bloomerg.com

(the image on the article is a shot of the Boston's Green Line)


link: http://www.bloomberg.com/apps/news?pid=20601109&sid=aV2SxqQRuOFw&refer=home

"Advocates of surface-road and highway building say these projects would prove environmentally friendly because they would help relieve congestion."
...when will they learn?

The 'problem' with the stimulus package is that if a state or local government doesn't start spending the money, say within six months, the money reverts to the Feds.

Using an apology of Boston development projects, if such were eligible, Columbus Center, Filene's and SST would get funded; Tommy's Tower, Congress Street garage, Gateway would not.

As I recall the Commonwealth's proposed list, there were some mass transit projects on it, just no splashy biggies. For example, I recall one project being to double track a commuter rail route.

 

[JohnAKeith]

Double track Park Street to Kenmore!

 

[atlrvr]

Did the environmental study for the blue-line to Charles/MGH ever get completed? I doubt it, but if so, that would be a worthy project for these grants that will probably never be funded otherwise.

 

[kennedy]

Re: NorthPoint Cambridge (The one that was train yards, the big plan.)

*sigh*

Why can't our economy be all better again?

 

[shiz02130]

Re: NorthPoint Cambridge (The one that was train yards, the big plan.)

Why? Because the government/Fed won't led the free enterprise system out from under the crushing burden of Keynesian interventionism. If you think its bad now, just wait until they enact another "stimulus package."

 

[ablarc]

Re: NorthPoint Cambridge (The one that was train yards, the big plan.)

Why? Because the government/Fed won't led the free enterprise system out from under the crushing burden of Keynesian interventionism. If you think its bad now, just wait until they enact another "stimulus package."

That can't be proved any more than the Keynesians can prove their stimulus package is essential. Economics is voodoo.

 

[shiz02130]

Re: NorthPoint Cambridge (The one that was train yards, the big plan.)

The difference being that its was the actions of the Keynesian "voodoo doctors" that created this crisis in the first place. The Austrians, since they rightfully limit the scope of government interference into the economy, thereby limit the extent of unintended negative consequences. Economics is not "voodoo." But its supposed to be a descriptive science, not a prescriptive one. Geithner couldn't even do his own taxes correctly - do you want to give him dictatorial power over YOUR economic future?

 

[skintreesnail]

Re: NorthPoint Cambridge (The one that was train yards, the big plan.)

You're right! Let’s put the republicans back into power. I'm sure they can fix it. Paulson has done such a bang-up job, so why should we give Geithner a chance? Let's judge him before he even gets into office.

It was lax regulation and laissez-fair economic policies that got us into this mess to begin with.

That said, I think this land should be reserved for a great depression-era shanty village.

 

[underground]

Re: NorthPoint Cambridge (The one that was train yards, the big plan.)

Austrian school economists are like the Tolkeins of their field. They base their theories off of a long ago time and place that only ever existed in fairy tales.

 

[Lurker]

Re: NorthPoint Cambridge (The one that was train yards, the big plan.)

It was lax regulation and laissez-fair economic policies that got us into this mess to begin with.

You obviously have no clue what the hell you are talking about. The government near monopoly of Freddy Mac and Fannie Mae, in addition to lending practices required by the Community Reinvestment Act created the real estate bubble which sank the market. Shortly after amending the CRA, the Clinton administration realized it was a mistake and tried to change the act. People like Christopher Dodd and Barney Frank blocked any changes and continued to do so throughout the Bush administration. The two clowns most responsible, Dodd and Frank, have been the loudest pointing figures at everyone else they can to try to and cover up their screw-up. Now the clown princes responsible are being given additional powers over the circus, oh joy!

Bush and the Republicans since 2000 have been ANYTHING BUT laissez-fair. The Republican party became socialist light, so called Republicans In Name Only RINOs, this pissed off most of the party members, and that's why GOP turnout was far less than the past elections. Those people didn't vote for Obama, nor did they vote for Republican seats in 2006, they stayed home in disgust. It is pathetic that as a country we no longer have a voting option for a fiscally conservative party!

 

[skintreesnail]

Ouch, my feelings are hurt.

You can't blame the CRA for the incompetent blunderings of our financial institutions. It was them, after all, that provided the loans that sank the market. Blaming the CRA is like a bank robber blaming the bank for leaving its money in sight. It's the greedy nature of the corporations that looked to take advantage of the act that makes it flawed. But then, what do you expect, that’s what their purpose is; to make money any way possible. If there were any regulations around lending, then we wouldn't have ended up where we are today, would we?

The same goes for Fannie Mae and Freddie Mac (who, before September of last year hadn’t been owned by the government since 1968 when they were privatized); no regulation. The fact that sub-prime loans and other predatory lending ever existed proves the lack of regulation. But the housing crisis isn’t the only reason we are where we are today.

 

[stellarfun]

Its remarkable how much blame for the financial crisis is laid at the feet of Barney Frank and Dodd, who were out of power. The Republicans controlled the House from 1995 through 2006, and Frank could whine and pontificate, and little else. And while the Republicans didn't have control of the Senate for all those years -- Jeffords helped see to that -- Sarbanes was the ranking member on Senate Banking when the Republicans controlled the Senate, not Dodd.

There are many causes and many villains in this financial mess, but the creation of credit default swaps tops my list. When the notional value of CDSs exceeds the global GDP, then you have a miniscule number of people placing bets with money that is not theirs that the economy will collapse and thinking they will be rewarded. What is the bailout of AIG about other than the Feds paying off the side bets that AIG couldn't cover.

Derivatives are not regulated (Phil Gramm saw to that), largely unmonitored, mostly invisible, and yet their annual transaction value is several quadrillion dollars. If that is not a recipe for creating a financial system that can run amok, I don't know what is.

 

[kennedy]

Could you explain credit default swaps for me?