Obama Plan Would Boost GDP, Economists Say(edited)

Re: Obama's Plan is the Right Way to Go

Objective Voice said:

I've long had a problem with the Bush tax cuts...I prefer that they didn't get extended but understand why they were. And while I'm not too keen on the FICA tax being cut still, I can live with it as long as the cut is temporary. At some point taxes will have to be raised, but in today's economy I can live with temporary tax reductions as long as they expire at the end of 2012, as appropriate.

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Instead of raising taxes, why not get out of the private sector's way and allow them to earn more taxable income?

apdst said:

IOW, we're going to do the same things that didn't work when we tried them before.

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What many don't seem to understand is that consumer confidence is extremely low and the business community has no confidence in this Administration and will not be doing any hiring unless extremely necessary. The costs are too high and the benefits too short term. Businesses don't print money and don't make short term decisions. All the benefits offered to hire people are short term but hiring any employee is a great expense and it seems eventually Obama is going to raise taxes on business and then there is Obamacare.

Liberals, you really screwed up on this one, The choice of Obama was a disaster

Conservative said:

What many don't seem to understand is that consumer confidence is extremely low and the business community has no confidence in this Administration and will not be doing any hiring unless extremely necessary. The costs are too high and the benefits too short term. Businesses don't print money and don't make short term decisions. All the benefits offered to hire people are short term but hiring any employee is a great expense and it seems eventually Obama is going to raise taxes on business and then there is Obamacare.

Liberals, you really screwed up on this one, The choice of Obama was a disaster

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Businesses hire because they need help -- not because they're feeling confident. Putting cash in consumers pockets to spend causes businesses to need help.

AdamT said:

Businesses hire because they need help -- not because they're feeling confident. Putting cash in consumers pockets to spend causes businesses to need help.

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But first, they have to spend it. The lack of confidence in the business sector stems from the gigantic lack of consumer confidence that this regime has created.

With the drilling ban, the attack on coal companies, coal fired power plants, the tobacco industry and the nationalization of the auto industry that resulted in the forced shut down of car dealerships all over the country, plus the damage that cash for clunkers did to the used care market, it leave everyone in the working class wondering, "whose jobs get killed next?".

Tettsuo said:

The cost of inaction is much greater than the cost of action.

Obama Plan Would Boost GDP, Economists Say - Bloomberg



So if the option is to simply cut services then wait and see, we're in for a long cold recession, but if we act it could improve things across the board.

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As the President stated last week, the main criteria for selection of jobs projects will be how they will improve the economy.

Catawba said:

As the President stated last week, the main criteria for selection of jobs projects will be how they will improve the economy.

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More, "shovel ready projects"? :lamo

apdst said:

But first, they have to spend it. The lack of confidence in the business sector stems from the gigantic lack of consumer confidence that this regime has created.

With the drilling ban, the attack on coal companies, coal fired power plants, the tobacco industry and the nationalization of the auto industry that resulted in the forced shut down of car dealerships all over the country, plus the damage that cash for clunkers did to the used care market, it leave everyone in the working class wondering, "whose jobs get killed next?".

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LOL

The drilling moratorium (now OVER for some months) was a response to the biggest offshore oil disaster in our history. Coal companies were not being attacked, they were being regulated for spewing pollutants that absolutely cause over 10,000 deaths per year. Now that's out the window, too. The tobacco industry is literally a cancer on the world. Obama saved two thirds of our domestic auto industry and their associated dealerships. If he hadn't, thousands more dealerships would have vanished. Cash for clunkers was a huge success.

Other than that, Mrs. Lincoln....

AdamT said:

LOL

The drilling moratorium (now OVER for some months) was a response to the biggest offshore oil disaster in our history. Coal companies were not being attacked, they were being regulated for spewing pollutants that absolutely cause over 10,000 deaths per year. Now that's out the window, too. The tobacco industry is literally a cancer on the world. Obama saved two thirds of our domestic auto industry and their associated dealerships. If he hadn't, thousands more dealerships would have vanished. Cash for clunkers was a huge success.

Other than that, Mrs. Lincoln....

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So, how many of the 33 rigs that were shut down are back to work?

apdst said:

So, how many of the 33 rigs that were shut down are back to work?

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The moratorium was lifted. Do you know what that means?

AdamT said:

The moratorium was lifted. Do you know what that means?

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Ok, so, how many permits have been issued since it was, "lifted"?

If permits aren't being issued, then the ban wasn't, "lifted", was it?

apdst said:

Ok, so, how many permits have been issued since it was, "lifted"?

If permits aren't being issued, then the ban wasn't, "lifted", was it?

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Do you not have Google where you live? Why don't you ever check your facts before you blurt out whatever crosses your mind?

"BOEMRE Has Approved 51 New Shallow Water And 19 New Deep Water Drilling Permits Since June. According to the latest data available from the Department of Energy's Bureau of Ocean Energy Management, Regulation, and Enforcement, 51 permits for new shallow-water wells and 19 permits for new deep-water wells have been approved since June 8, 2010."

AdamT said:

Do you not have Google where you live? Why don't you ever check your facts before you blurt out whatever crosses your mind?

"BOEMRE Has Approved 51 New Shallow Water And 19 New Deep Water Drilling Permits Since June. According to the latest data available from the Department of Energy's Bureau of Ocean Energy Management, Regulation, and Enforcement, 51 permits for new shallow-water wells and 19 permits for new deep-water wells have been approved since June 8, 2010."

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Do they have actual links to your source, where you live? Go ahead, post the link for us. This is going to be good! :rofl

apdst said:

Do they have actual links to your source, where you live? Go ahead, post the link for us. This is going to be good! :rofl

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I thought the source was fairly evident from it being named in the quote. :rofl:

Status of Drilling Permits Subject to Enhanced Safety and Environmental Requirements in the Gulf of Mexico

Re: Obama's Plan is the Right Way to Go

AdamT said:

I think you forgot to include the link. opcorn2:

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LOL! Isn't it funny that those without a jobs plan whine about others jobs plans. Quite the campaign strategy they've got going there! LOL!

apdst said:

Ok, so, how many permits have been issued since it was, "lifted"?

If permits aren't being issued, then the ban wasn't, "lifted", was it?

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Nonsense. This industry has more permits and availability to expand than they know what to do with.

Objective Voice said:

It's a good article, but it doesn't exude such gloom and doom as you'd like readers to believe.

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I'm unaware that I suggested it should produce doom and gloom. Simply that it should throw cold water on those from the same crowd that promised us sub-8% unemployment with the Giant Pork Bill American Reinvestment and Recovery Act who now promise us that the presidents new plan (same as the old plan) will somehow do the trick.

There are mixed reactions to the President's jobs proposal. Some employers say the plan could work for them, others are 50/50 and still others say it won't help them one bit. But what you gleen from the article is this: At least employers are thinking of ways the plan could work for them. At least employers recognize that the plan would work best in certain industries, i.e., construction, pharmaceuticals, health care, education. At least employers are saying the see some merit to the President's jobs proposal. It may not put 8,000,000 people back to work but it it can take even 1/4 of the unemployed or under-employed off the federal dole and increase GDP, I can get behind that.

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it won't get 25% of those workers back, and at half a trillion dollars? we have spent enough on this keynesian experiment already. If the President was talking about permanent reductions instead of tax credits; THEN he would be on to something. If he was talking about tax code simplification, he would be on to something huge. Instead this is a tinker-round-the-edges speech designed mostly just to give him a way to run against Congress in 2012.

AdamT said:

Businesses hire because they need help -- not because they're feeling confident. Putting cash in consumers pockets to spend causes businesses to need help.

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that's the theory, certainly. two immediate problems spring to mind.

1. you have to get that money from somewhere, and the only place to get it is from the private market in the first place. taking money out of someone's pocket to put back in their pocket (taking a cut off the top for the bureaucracy and inefficiency that come with government) doesn't actually mean that they have more money.

2. in highly leveraged economies (such as - gasp - ours), the multiplier is actually negative, because people tend to use "windfalls" (such as the government giving tax credits) to pay down debt.



SO. If only we weren't already heavily in debt (both publicly and privately), and if only the government were in possession of a Magic Money Tree which could produce money without increasing the monetary supply, then yes, this plan would work. And beggars could ride.

cpwill said:

that's the theory, certainly. two immediate problems spring to mind.

1. you have to get that money from somewhere, and the only place to get it is from the private market in the first place. taking money out of someone's pocket to put back in their pocket (taking a cut off the top for the bureaucracy and inefficiency that come with government) doesn't actually mean that they have more money.

2. in highly leveraged economies (such as - gasp - ours), the multiplier is actually negative, because people tend to use "windfalls" (such as the government giving tax credits) to pay down debt.



SO. If only we weren't already heavily in debt (both publicly and privately), and if only the government were in possession of a Magic Money Tree which could produce money without increasing the monetary supply, then yes, this plan would work. And beggars could ride.

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Kinda sounds like you are saying wealth is not created and a planned economy is better.

Re: Obama's Plan is the Right Way to Go

haymarket said:

we have been discussing this in another thread and I just want to get my stance on this clear - I would hope that Congress would pass the entire Obama plan as he described it last night. The nation needs it. However, I fear that the GOP will only extract from it the planks that Obama included as part of the compromise with them top get their support and will dump everything else that Obama and the Dems want. They will then claim that they did give the President some of what he requested and thus did indeed compromise. And Obama will be outmaneuvered yet again by the Republicans.

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How about adding that to all your posts?

cpwill said:

1. you have to get that money from somewhere, and the only place to get it is from the private market in the first place. taking money out of someone's pocket to put back in their pocket (taking a cut off the top for the bureaucracy and inefficiency that come with government) doesn't actually mean that they have more money.

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What exactly are you saying? Are the commercial paper markets seeing a lack in available credit due to increased borrowing by the Federal Government? Have interest rates increased (much less relatively) to reflect a general lack of capital? This money being spent now, rather than later, means income will be created now..., rather than later.

in highly leveraged economies (such as - gasp - ours), the multiplier is actually negative, because people tend to use "windfalls" (such as the government giving tax credits) to pay down debt.

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The key is to create new income earners. I do however agree that tax cuts, in and of themselves, are a piss poor way to stimulate aggregate demand when society is indebted. Which is why thousands of public works projects are > tax cuts at this time.

Goldenboy219 said:

I do however agree that tax cuts, in and of themselves, are a piss poor way to stimulate aggregate demand when society is indebted. Which is why thousands of public works projects are > tax cuts at this time.

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That is true, but it's also true that tax cuts are the only form of stimulus that republicans understand, so it's about the only realistic option that Obama has. Obama is also doing it the right way -- delivering the payroll tax cut in weekly installments -- so you don't have the windfall problem. The down side to that, of course, is that you don't get the same political boost as you wood if you delivered the benefit in the form of a single check (see Bush rebate).

Putting aside the issue as to the merits of the proposal's provisions, the President's announced outline for paying for the program makes it unlikely that Republicans will support the program. CNBC reported:

President Obama is proposing to end several tax provisions—including tax breaks for those earning more than $200,000 and the carried-interest tax break for hedge funds—in order to pay for his $447 billion job-creation package, the White House said Monday.

The tax breaks to be ended, including those for oil and gas companies, will total $467 billion, White House Budget Director Jack Lew told reporters.

Congressional Republicans had overwhelmingly rejected such tax changes in the past. As a result, Republicans are not likely to accept the proposal as it has been outlined (some provisions could be adopted on their own merits e.g., extension of the unemployment benefits). Moreover, some Republicans might be even more strongly against it, as they could view the proposal in terms of being asked to adopt a measure that the President wants and, at the same time, swallow a political poison pill (violation of their pledge to ATR not to raise taxes) as the price for doing the President a political favor.

IMO, if the President wanted this package adopted, the proposed means of paying for it undermines prospects of the package's adoption. If, however, the President seeks to launch a broader policy fight in the run-up to the election, the package offers just such a mechanism for sparking that battle. If, in fact, the policy battle is the aim, that approach carries risks e.g., if the nation's unemployment rate does not decline or show signs of declining materially as the November election rolls around, voters could still deny the President a second term. My guess is that the President's aim is the former and, unfortunately, it provides a fresh illustration of how the political leaders are essentially talking past one another rather than trying to find common ground and leverage that area of agreement to build constructive policies.