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Thread: CBO: Obama stimulus harmful over long haul

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    Re: CBO: Obama stimulus harmful over long haul

    Quote Originally Posted by missypea View Post
    Haven't the economists been at odds about this from the start?

    Some saying to do nothing and others saying to double or triple the stimulus?

    My opinion on it is that no-one really knows what to expect. Half will be right and half will be wrong.

    ........at least it's better odds than Bingo
    There is ample proof it won;t work to stimulate the economy. specially this pork laden bill.

    There is thousands of years of evidence tax cuts work. The simplest line comes from the Persians who claimed revenues were high when taxes were low, and revenues low when taxes were high. JFK agreed with tax cuts to stimulate the economy, claiming cutting taxes for all raised all boats.

    Let me ask you... why confiscate the money from the tax payer, run it through the government meat grinder, take that trickle of revenue and redistribute it according to what a few hundred people believe is politically advantageous?

    Wouldn't it be far better to cut out the middle man, and let the consumer or investor decide what to do with the cash HE or SHE EARNED? Wouldn't it be better to cut taxes and have individuals decide what course to take? Of course it would. Instead we have the likes of Pelosi, Reid and Obama playing Marx. "Spread the wealth around".

    This is going to be a great lesson for the public if only the press will report the waste, fraud and deceit after the wad of cash is blown... watching 2 trillion dollars getting flushed down the pisser.
    Last edited by zimmer; 02-07-09 at 05:58 AM.
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    Re: CBO: Obama stimulus harmful over long haul

    Quote Originally Posted by zimmer View Post
    There is ample proof it won;t work to stimulate the economy. specially this pork laden bill.

    There is thousands of years of evidence tax cuts work.
    Hogwash. You are not looking at the facts of the situation and your "historical" view is blinded by partisan goggles.

    When people fear for their jobs, their natural instinct is to save up, as witnessed in the jump (for Americans) in the personal saving rate. Any tax cut will be most likely saved up or used to pay personal debt and that wont help the economy. There is plenty of evidence that this would happen even in an American society.

    In my own country in the early 90s, the government gave tax cuts to stimulate the economy and nothing happened. As it turned out people paid off debt or saved up, and did very little consumption. It took another tax cut to stimulate a bit, but it was no where near what the conservative government thought would happen.

    But of course there should be tax cuts in any stimulus bill, but solely depending on tax cuts and on that the private sector make new jobs is beyond idiotic.. much like doing tax cuts and starting a major war.... oh yea that was the Republicans too.. You need heavy spending by the government in infrastructure projects, because the government does not have a credit problem.

    The state needs to cut taxes for the majority of people, not only the rich... one would have thought that the Republicans had learned their lesson. The state needs to invest heavily in infrastructure, because no amount of tax cuts can stimulate the economy, when the problem is lack of private sector credit. Companies can not create jobs nore maintain them if they do not have access to credit and THAT is what the problem is.

    So sure you can cut taxes like a drunk sailor in a strip bar, but it wont matter much since people will most likely save up or pay off debt, and it wont solve the problem of the lack of credit.

    Fix the credit problem and fix the economy, but governments are not willing to do the dirty deed it seems.
    PeteEU

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    Re: CBO: Obama stimulus harmful over long haul

    Quote Originally Posted by PeteEU View Post
    Hogwash. You are not looking at the facts of the situation and your "historical" view is blinded by partisan goggles.

    When people fear for their jobs, their natural instinct is to save up, as witnessed in the jump (for Americans) in the personal saving rate. Any tax cut will be most likely saved up or used to pay personal debt and that wont help the economy. There is plenty of evidence that this would happen even in an American society.

    In my own country in the early 90s, the government gave tax cuts to stimulate the economy and nothing happened. As it turned out people paid off debt or saved up, and did very little consumption. It took another tax cut to stimulate a bit, but it was no where near what the conservative government thought would happen.

    But of course there should be tax cuts in any stimulus bill, but solely depending on tax cuts and on that the private sector make new jobs is beyond idiotic.. much like doing tax cuts and starting a major war.... oh yea that was the Republicans too.. You need heavy spending by the government in infrastructure projects, because the government does not have a credit problem.

    The state needs to cut taxes for the majority of people, not only the rich... one would have thought that the Republicans had learned their lesson. The state needs to invest heavily in infrastructure, because no amount of tax cuts can stimulate the economy, when the problem is lack of private sector credit. Companies can not create jobs nore maintain them if they do not have access to credit and THAT is what the problem is.

    So sure you can cut taxes like a drunk sailor in a strip bar, but it wont matter much since people will most likely save up or pay off debt, and it wont solve the problem of the lack of credit.

    Fix the credit problem and fix the economy, but governments are not willing to do the dirty deed it seems.
    Wouldn't people paying off debt be the same thing as helping fix the credit problem?

    I think what politicians are looking for are near instant results. The positive changes take time and can not be wished into existence like so many of them think will happen.
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    Re: CBO: Obama stimulus harmful over long haul

    Quote Originally Posted by Harry Guerrilla View Post
    Wouldn't people paying off debt be the same thing as helping fix the credit problem?
    Nope, the core of the credit problem is intra bank (between banks). They dont want to loan each other money because they can not or do not want to value their toxic assets. The toxic assets arise because of falling house prices (which were frankly way inflated), and as long as house prices are falling, then the more toxic assets will come and the banks will continue to not loan each other money. And as long as banks dont want to loan to each other, then forget about companies and people getting credit.

    Getting a tax cut that will be used to pay off debt or save up, wont do squat. Sure it might help VISA and Mastercard since that is the debt that will most likely be paid off, but on the flip side, both companies and other CC companies will just cut your credit line drasticlly if you do that.

    Tax cuts will not pay off mortgages and that is where the huge majority of the toxic debt is tied too. After all the problem arised when American's got more and more loans in houses that had inflated prices, prices that are now falling so that American's owe more in their house than it is worth.... and that is the crux of the toxic assets and why it is so hard to value them. That and because of lack of regulation and rules, banks and the markets "mixed" toxic debt with good debt and no one has a clear view over what is what.. hence all debt is potentially toxic, and no one can trust the valuation that the debt was bought on.

    I think what politicians are looking for are near instant results. The positive changes take time and can not be wished into existence like so many of them think will happen.
    Only the stupid politicians are looking for that.. The pain will be here for months if not years to come, even Obama has said so many times. And any politician that even hints that tax cuts or any form of stimulus will "work instantly" should be removed from his position for incompetence.

    The problem is that the US politicians and somewhat the UK and other European politicians are not willing to go against their ideological conservative free market principles, that have so clearly failed.

    The US should do as the Swedes did, when they went through exactly the same problem back in the early 1990s. Nationalise banks that are failing, consolidate and improve and then sell off. One of the healthiest banks in the world today is Nordea, an entity of nationalised Swedish banks that since hence have been privatised and has emerged as a juggernaut in banking in Scandinavia and Northern Europe. It was painful but it worked, but it also goes against the "conservative mindset", which is the US biggest problem at the moment.

    Basicly we need to cut off the foot to save the life of the patient.
    PeteEU

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    Re: CBO: Obama stimulus harmful over long haul

    Does anyone have an opinion to the notion of issuing consumer vouchers to taxpayers that can NOT be exchanged for cash? Taiwan's government has done this - though it was not don't very efficiently and there have been some problems due to the incompetance of the current Chinese KMT administration - but that is neither here nor there.
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    Re: CBO: Obama stimulus harmful over long haul

    Quote Originally Posted by RightinNYC View Post
    This actually surprised me quite a bit. The report notes that it will help GDP growth over the next two years, but the effect will trail off after that.
    This article is from the Washington Times which is owned by the Rev Sung Myung Moon. I'll wait for a more reliable source even critical ones bofore I make up my mind.

  7. #27
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    Re: CBO: Obama stimulus harmful over long haul

    Quote Originally Posted by PeteEU View Post
    Hogwash. You are not looking at the facts of the situation and your "historical" view is blinded by partisan goggles.

    ... but solely depending on tax cuts and on that the private sector make new jobs is beyond idiotic.. much like doing tax cuts and starting a major war.... oh yea that was the Republicans too..
    Pete, you are a member of Old Europe through and through.
    That's not a term of endearment, but derision.

    I am a partisan, that's true... but I used to be a socialist and have seen the misery EU governments have wrought on their people. They claim to want to assist the average person, but what they do is keep them down.

    You are a partisan too, but I doubt you've changed your spots much since being indoctrinated by the Euro Socialist school system and media.

    So, of two partisans, you are the one who isn't open minded... I've changed mine 180 degrees.

    Government throwing money WHERE THEY THINK THE PROBLEM IS does not solve the problem, if it did Japan would have recovered fast and strong. Instead they have what is now called "the lost decade". Government couldn't move the ball, and though a trillion is a big number for government to bang about, it's a trickle in the perspective of the total economy.

    New Zealand, near bankruptcy trashed its socialist ways and prospered.

    Tax cuts alone could work. Cuts of all kinds, lots of cuts... I'm not picky.

    Tax cuts work every time they have been tried.

    What happens after government blows this money and nothing happens? What happens when it gets worse?
    Confiscate more wealth and run it though the government meat grinder?

    What's idiotic is you myopic view of the world, but it's no wonder as you've been spoon fed the rubbish that passes for news in Europe.

    Want to see how well YOUR system works? Click on the TIMBRO link below and see how feeble the best EU economies are when compared to US States.

    PS.

    1. As for the war, not that facts mean anything to socialists, but Democrats voted to send the troops into battle. They spoke vehemently about the threat Saddam posed when The Clintons were president.

    2. Bush entered office with a recession and then 911... his tax cuts helped keep the economy running at rates better than the celebrated Clinton Tech Bubble economy.

    Chew on that for a while.
    Last edited by zimmer; 02-07-09 at 12:12 PM.
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  8. #28
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    Re: CBO: Obama stimulus harmful over long haul

    Has anyone read the actual report? It's unfortunate that the Washington Times neglected to put a link to the original in their article.
    Sometime what gets reported isn't the whole picture. This may actually be better than it seems, or it may be worse than it seems.
    I may be wrong.

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    Re: CBO: Obama stimulus harmful over long haul

    Quote Originally Posted by Simon W. Moon View Post
    Has anyone read the actual report? It's unfortunate that the Washington Times neglected to put a link to the original in their article.
    Sometime what gets reported isn't the whole picture. This may actually be better than it seems, or it may be worse than it seems.
    This is quote from the CBO blog. You can read the report in pdf to.


    "In contrast to its positive near-term macroeconomic effects, the Senate legislation would reduce output slightly in the long run, CBO estimates, as would other similar proposals. The principal channel for this effect is that the legislation would result in an increase in government debt."

    Director’s Blog Blog Archive Macroeconomic Effects of the Senate Stimulus Legislation
    I was discovering that life just simply isn't fair and bask in the unsung glory of knowing that each obstacle overcome along the way only adds to the satisfaction in the end. Nothing great, after all, was ever accomplished by anyone sulking in his or her misery.
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  10. #30
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    Re: CBO: Obama stimulus harmful over long haul

    Quote Originally Posted by justone View Post
    This gov-nt cares not about the people but about being in power for next 8 years, - because American taxpayers did not elect it, - but those who did not carry the burden of taxes did elect it. This gov-nt does not care about American taxpayers, but it uses their money to inlarge its base of those who do not pay taxes, - and so the Treasure Secretary is appointed to the position.
    So... Obama is elected by those who "did not carry the burden of taxes"?

    Forgive me but when you say "this government cares not about the people" yada yada yada, and the government that was elected is a large majority democratic, what the hell is that supposed to mean?

    Feel free to take some time to formulate a coherent response.
    Last edited by Indy; 02-07-09 at 01:32 PM.
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