The whole point of the stimulus package is to put money in the hands of people that are going to spend it.

Without customers businesses cannot make any money. If a business is not making money, they won't be getting any investments, no matter how much money there is to invest.

At the moment there is a lack of spending by the people in general. Yes, people are buying some things, but not as much as they used to. This leads to people being laid off because of falling profits. And this leads to people spending less money because they don't have any to spend.

Borrowing money from the future to get the economy kick started again in this case is nessecary. Please remember that the reaction at the beginning of the recession was to cut government spending to match government income. What finally broke the economy out of the depression was more government spending. Partly for things like the Civilian Conservation Corps, and finally getting industry cranked up for World War II.

Borrwoing money from the future (ala George W. Bush) was not nessecary, and stupid as it put us into this box in the first place. Now that we need a kick start, the "conservatives" have suddenly found fiscal discipline again - just in time to do more harm than good.

Should the stimulus be permanent? By all means no. It should last just long enough to kick the economy into gear.

I for one do not want to have to live through either a great depression, or another World War. (And we might or might not win this one if it happens).

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BOINC WIKI

Stimulus bill's contents, handling could not be more disheartening

What comes after the stimulus?

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me@rescam.org

Will America experience a lost decade?

By Robert J. Samuelson
NEWSWEEK

February 17, 2009

“If you delay acting on an economy of this severity, (it potentially) becomes much more difficult for us to get out of. We saw this happen in Japan in the 1990s, where they . . . suffered what was called the 'lost decade.' ”

– President Barack Obama, Feb. 9

“The Japanese . . . had eight separate stimulus packages. . . . It was unprecedented. And it didn't work.”

– Sean Hannity, conservative TV talk-show host, Jan. 23

We argue by analogy. The president says that Japan's history demonstrates the need for his “stimulus package.” To the contrary, claim Hannity and other conservatives, Japan shows that stimulus plans don't work. Up to a point, they're both right. But the possible parallels between Japan's experience and our own are much broader and pose the question of whether we, too, might face a “lost decade.”

What happened to Japan in the 1990s?

It did not, as some commentators say, suffer a “depression.” Not even a “great recession,” as others put it. Japan experienced a listless, boring prosperity. Its economy expanded in all but two years (1998, 1999), although the average annual growth rate was a meager 1.5 percent. Japan remained a hugely wealthy society.

Its situation compelled attention mainly because it confounded conventional wisdom. From 1956 to 1973, Japan had grown 9 percent a year; in the 1980s, it was still growing at 4 percent. Japan was widely expected to overtake the United States as the richest, most advanced economy. It didn't. Worse, its semi-stagnation defied the notion that modern economics enabled government to ensure adequate growth.

Papers were written, conferences organized, and the verdict rendered: The Japanese had botched it. After the “bubble economy” of the late 1980s burst, the Bank of Japan had eased credit too slowly. Burdened with bad loans, banks stopped lending; government didn't cleanse the banks quickly enough. Government stimulus packages were too little, too late. Naturally, the economy languished. All plausible – and wrong.

The standard analysis reassures, because it suggests that with better decisions, Japan might have avoided its prolonged slowdown. The reality seems to be that Japan's economic reverses reflect deeply held social and political values. The same might be true of us.

Japan has what Richard Katz, editor of The Oriental Economist, terms a “dual economy.” On the one hand, export industries (autos, steel, electronics) are highly efficient. They face intense global competition. On the other, many domestic industries (food processing, construction, retailing) are inefficient and sheltered from local competition by regulations or custom.

This has suited most Japanese. Exports earned the foreign currency needed to buy food and fuel imports. Meanwhile, protected domestic industries provided the job security and social stability that most Japanese preferred to hyper-competition. While exports thrived, they – and the supporting business investment – were Japan's engine of economic growth.

The trouble is that this system broke down in the mid-1980s. The rising yen made Japanese exports costlier on world markets. New competitors – South Korea, Taiwan – emerged. Japan lost its engine of growth and hasn't found a new one. That's Japan's central economic problem.

Government has tried. In the 1980s, the Bank of Japan sought to offset the effect of the higher yen with cheap credit. This backfired, resulting in the bubble economy. From 1985 to 1990, Tokyo land prices rose 134 percent; the stock market boomed. Since the bubble's collapse, there have been 13 stimulus plans, reckons economist Randall Jones of the Organization for Economic Cooperation and Development. Even now, the economy is trade-dependent; in December, exports dropped 35 percent from a year earlier, pushing Japan into a deep recession.

What happened in Japan does not doom Obama's stimulus as futile. Sometimes, government should intervene to break the fall of a declining economy. Japan's packages probably temporarily bolstered a faltering economy. In this sense, the president is correct. Unfortunately, his stimulus is weaker than advertised, because much of the effect occurs after 2009.

Still, the operative word is “temporarily.” Hannity is correct in that serial stimulus plans become self-defeating. The required debt is unsustainable. At some point, the economy must generate strong growth on its own. Japan's hasn't. Will ours?

Just as the mid-1980s signaled the end of Japan's export-led growth, the present U.S. slump signals the end of upbeat consumption-led growth. But its legacy is an overbuilt and overemployed consumption sector, from car dealers to malls. The question is whether our system is adaptive enough to create new sources of growth to fill the void left by retreating shoppers.

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me@rescam.org

yes, cause (too )free market has failed once again

"The principle of spending money to be paid by posterity, under the name of funding, is but swindling futurity on a large scale." --Thomas Jefferson

"If the stimulus plan were a Thanksgiving dinner entree, it would be a Turbaconducken -- the heart attack-inducing dish of roasted chicken stuffed inside a duck stuffed inside a turkey, all wrapped in endless slabs of bacon." --columnist Michelle Malkin

"Stimulus: Say this for the $787 billion behemoth that Congress voted on Friday -- never in our history has a more important vote been cast on legislation with so little scrutiny. Couldn't they at least read the thing before voting on it? The 1,434-page bill is, in a word, massive. It's full of details that deserve to be given a close look before anyone votes. ... The bill that President Obama called 'the largest change in domestic policy since the 1930s' was jammed down Congress' throat, breaking almost all the promises of bipartisanship and transparency along the way. House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid vowed to give members of Congress at least 48 hours to look at the historic legislation before them. After all, the bill will spend the equivalent of nearly 9% of our GDP while adding $1.2 trillion to our national debt. Obama vows to 'create or save' 3.5 million jobs at a cost of $263,000 per job. Shouldn't it get even a little bit of scrutiny? Apparently not. ... Why the haste? Surely one reason is the bill is stuffed with pork and short of real stimulus. Its authors don't want the details out. They shouldn't be surprised, then, when voters bridle at what they've been saddled with." --Investor's Business Daily

never in our history has a more important vote been cast on legislation with so little scrutiny.

Someone overlooked the bank bailouts

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In a rich man's house there is no place to spit but his face.
Diogenes Of Sinope

never in our history has a more important vote been cast on legislation with so little scrutiny.

Someone overlooked the bank bailouts

No kidding, I think the above statement should apply to all recent spending bills.

Who really gets bailed out

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me@rescam.org

Group counters stimulus with Jesus in TV ad

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me@rescam.org

Who really gets bailed out

I can only assume this is one of the "tax" relief stimuli that the 3 republicans added to the bill

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In a rich man's house there is no place to spit but his face.
Diogenes Of Sinope

"The fact is, we'll never build a lasting economic recovery by going deeper into debt at a faster rate than we ever have before." --Ronald Reagan

"What [Obama calls] tax reductions in this bill are really transfer payments, particularly redistribution of income from the rich to the poor. The economy did very well [after the Bush] tax cuts of 2003. Obama has blamed [the Bush tax cuts] for part of the current financial collapse. There's really no linkage between the tax cuts of 2003 and the financial and housing collapse we've seen in recent months. Abolishing the corporate income tax at the federal level I think would be very positive. It's a very poor form of taxation. I would make permanent the kinds of changes that were in the 2003 tax reform, including the marginal tax rate structure." --Harvard Economist Robert Barro on Obama's "terrible piece of legislation"

"The fact is, we'll never build a lasting economic recovery by going deeper into debt at a faster rate than we ever have before." --Ronald Reagan

"What [Obama calls] tax reductions in this bill are really transfer payments, particularly redistribution of income from the rich to the poor. The economy did very well [after the Bush] tax cuts of 2003. Obama has blamed [the Bush tax cuts] for part of the current financial collapse. There's really no linkage between the tax cuts of 2003 and the financial and housing collapse we've seen in recent months. Abolishing the corporate income tax at the federal level I think would be very positive. It's a very poor form of taxation. I would make permanent the kinds of changes that were in the 2003 tax reform, including the marginal tax rate structure." --Harvard Economist Robert Barro on Obama's "terrible piece of legislation"

So Reagan used reverse psychology on the nation?
Yes I'd eliminate all Corporate loopholes. Thats just foolishness. Someone has clearly not done any history of the income tax. Here a synopsis. The Corporate income tax came first. personal income tax came to pay for WWII. The Gov't loved that tax so much they kept it. Originally the personal income tax was so low that individuals filled out a card and sent their tax at the end of the year. The gov't figured out it could collect a whole lot more tax if they took it out of every paycheck instead of a one time deal. Needless to say I think the personal income tax should be abolished and Corporate tax put back where it belongs. Its pretty funny that the country is/was better off when corporation bear the heavier burden of taxation.
Obama is right to blame the tax cuts to the rich for this mess. The fun thing is hearing Republicans stating that even more tax cuts to the rich are the only solution to the current problem. Say what? So decreasing government revenue is the only way to make things get better. The main problem that The rich would like the rest of to not see is that they are not earning their money. The rich Invest. The rest of us work and buy the stuff we need to get by.

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In a rich man's house there is no place to spit but his face.
Diogenes Of Sinope

Yes I'd eliminate all Corporate loopholes. Thats just foolishness.

Much of this post is just foolishness. Every single red cent of every single tax on corporations goes directly to the price of the good or service sold because a tax on a corporation is just another cost of doing business. For example, in the case of GM, it has to buy metal, glass, plastic, and labor to build a Hummer. And every cent of those raw materials goes directly into the price. If you then tax the corporation, then GM puts metal, glass, plastic, labor, and tax directly into the price. This drives prices up, affects those that can afford it the least, the most, and the corporation hasn't paid one cent of tax. They never do because those taxes are passed directly onto the consumer. It doesn't matter whether that works out to $10 dollars per car, or $100 dollars per car, or $1000 dollars per car. Those taxes are passed directly onto the consumer.

Someone has clearly not done any history of the income tax. Here a synopsis. The Corporate income tax came first. personal income tax came to pay for WWII. The Gov't loved that tax so much they kept it. Originally the personal income tax was so low that individuals filled out a card and sent their tax at the end of the year. The gov't figured out it could collect a whole lot more tax if they took it out of every paycheck instead of a one time deal. Needless to say I think the personal income tax should be abolished and Corporate tax put back where it belongs.

Someone does not understand how taxation works.

Its pretty funny that the country is/was better off when corporation bear the heavier burden of taxation.

Someone still does not understand how taxation works.

For the reasons above, corporations do not "pay taxes." They never have. Oh sure, they may send a check to the gov't, but it doesn't matter because every single penny they sent to the gov't was taken from the consumer in the form of higher prices because it's just a cost, just like metal and labor.

Obama is right to blame the tax cuts to the rich for this mess. The fun thing is hearing Republicans stating that even more tax cuts to the rich are the only solution to the current problem. Say what? So decreasing government revenue is the only way to make things get better. The main problem that The rich would like the rest of to not see is that they are not earning their money. The rich Invest. The rest of us work and buy the stuff we need to get by.

This isn't quite as funny as the comments in another thread where Robert demonstrated that he has absolutely no idea whatsoever about the time value of money and compound interest, but it comes close.

Much like corporate tax, every single dime that the gov't spends was already going to be spent in the economy, because it was already in the economy, and it was going to be spent by those who know best what to do with it--those that earned it.

Obie, like Dubya, like Clinton, like 41, like Reagan, like Carter, like Ford and on and on and on is just going to take it from those who can afford it the least, waste a bunch of it on waste, and bureaucracy, and the CIA, and the WHISC, and corporate "welfare," and war and $500 dollar hammers, and spend what's left on dumb gov't programs, and the net result is a LOSS to the economy.

"Decreasing government revenue" means those that earned it (overwhelmingly the the three middle classes and the poor) get to keep it and spend it on what they think is best. Rest assured, that won't be waste, and bureaucracy, and the CIA, and the WHISC, and corporate "welfare," and war and $500 dollar hammers.

They never do that unless a gun is stuck into their faces and they are forced to pay for such things.

Oh wait...

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Cordially,
Rush

elrushbo2@theobviousgmail.com
Remove the obvious...

you are wrong

you are wrong

Short concise I love it.
I guess that better than a long drawn out diatribe that I was thinking of

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In a rich man's house there is no place to spit but his face.
Diogenes Of Sinope

Yep folks, they actually posted those responses. In the words of the immortal Dave Barry, "I am not making this up".

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Cordially,
Rush

elrushbo2@theobviousgmail.com
Remove the obvious...

I posted some figures quite a while back on the percentages of government revenues from corporate taxes.
I'm not going to start looking through my bookshelves for the exact numbers but approx 40 to 50 years ago the percentage of revenue from corporate sources was close to 35%.
Now that number is down to about 12%. (perhaps even lower by now)
While corporate tax cuts are the mantra of the neo-con republican libertarian wealthy crowd, it must be kept in mind that the government must make up the shortfall by adding to the personal income taxes on individual wage earners.
That would be you, Mr. and Ms. working person.

While Rush needs the corporate world to remain extremely profitable for his own reasons, I think the profits presently going toward monsterous executive salaries need to be redistributed throughout our society by means of heavier taxation of corporate profits.
This should go hand in hand with a progressive taxation system that should heavily tax individual incomes on all earnings above the 4 to 5 million dollar mark.

Anyone in here worried about having to pay 90% tax on any income over the 4 or 5 million dollar ceiling?
I didn't think so.

Be a watchdog of your money

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me@rescam.org