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CBO: Obama stimulus harmful over long haul

RightinNYC

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President Obama's economic recovery package will actually hurt the economy more in the long run than if he were to do nothing, the nonpartisan Congressional Budget Office said Wednesday.

CBO, the official scorekeepers for legislation, said the House and Senate bills will help in the short term but result in so much government debt that within a few years they would crowd out private investment, actually leading to a lower Gross Domestic Product over the next 10 years than if the government had done nothing.

CBO estimates that by 2019 the Senate legislation would reduce GDP by 0.1 percent to 0.3 percent on net. [The House bill] would have similar long-run effects, CBO said in a letter to Sen. Judd Gregg, New Hampshire Republican, who was tapped by Mr. Obama on Tuesday to be Commerce Secretary.

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.
 
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 :mrgreen:
 
I think I'd rather not borrow an additional trillion dollars on a coin flip.
 
I think I'd rather not borrow an additional trillion dollars on a coin flip.

And thank you for your input. Now, if you will excuse us we'll go with the plan of the man we voted into office.
 
And thank you for your input. Now, if you will excuse us we'll go with the plan of the man we voted into office.

YEA AMERICA **** YEA!
 
Not a surprise really. You can't go the red forever, even if you are as powerful as the U.S. government. Although I can't support something harmful like the bailout/stimulus, I can at least understand that such spending is in response to a real crisis. What really pisses me off is all those years where we racked up debt when things were going well. You save during the good times so you have reserve to keep yourself afloat during the bad. Millions of American taxpayers a understand this, but the government doesn't.
 
What really pisses me off is all those years where we racked up debt when things were going well. You save during the good times so you have reserve to keep yourself afloat during the bad. Millions of American taxpayers a understand this, but the government doesn't.

The name of it is “The Stabilization Fund”. The inventor of the Plan is Vladimr Putin, a PhD in macroeconomics. The position was – the President of the Russian Federation. The goal was not to spend all for keeping himself in power but to put a part of the profit from high gas/oil prices aside for the times when the prices WILL go down, - for the sake of the people of Russia. Who could think the prices could go down when they were claiming so steady? Nobody in the US. Not even a single American taxpayer.

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.
 
The name of it is “The Stabilization Fund”. The inventor of the Plan is Vladimr Putin, a PhD in macroeconomics. The position was – the President of the Russian Federation. The goal was not to spend all for keeping himself in power but to put a part of the profit from high gas/oil prices aside for the times when the prices WILL go down, - for the sake of the people of Russia. Who could think the prices could go down when they were claiming so steady? Nobody in the US. Not even a single American taxpayer.

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.... over 50% of america doesn't pay taxes? You sir are an idiot.
 
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.

I used to be quite against the stimulus, but more recently I've been listening to Republicans in the Senate and disagreeing with them more often.

Republicans just seem to want more of a focus on Housing and basically the bare minimums on the bill. Honestly I don't think that's all we need. Part of stimulating the economy goes into improving infrastructure and energy.

Also, Americans are way too impatient. It has been only about three weeks since Obama took office and people are saying that change is not coming.

Unfortunately, its Republicans in the House and Senate that are blocking that change. The GOP is staining the face of the stimulus saying that it has "a lot" or "too much" of pork, when us regular voters are the ones hurting and know how real the problem is.

They say that tax cuts instead of spending would help the economy more. I agree with this somewhat, but if the Republicans have their way, a bill with a majority of tax cuts will take too much time to pump up the economy.

I think the idea of spending a lot and investing in the rights things (exactly what this bill does) could probably increase GDP in the log run, not decrease it.
 
So.... over 50% of america doesn't pay taxes? You sir are an idiot.

Did I ever say anything that could lead one to the conclusion that I could ever say that over 50% of America doesn't pay taxes?

You are an idiot and no sir.
 
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Did I ever say anything that could lead one to the conclusion that I could ever say that over 50% of America doesn't pay taxes?

You are an idioit and no sir.

And you spelled idiot wrong.
 
I think the idea of spending a lot and investing in the rights things (exactly what this bill does) could probably increase GDP in the log run, not decrease it. .

You think that you think. You are wrong. People who can think cannot say what you are saying because your speech contradicts to basics of thinking.


Spending a lot contradicts to investing. Investing in right things contradicts to taking probabilities.


And that is all in one short sentence of yours.
 
And you spelled idiot wrong.

No, I did not. Please look carefully at my post and don't try to misquote me.





















Yes I did, and I corrected misspelling. As you can see it changes nothing in your status.
 
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Moderator's Warning:
enough with the name calling
 
Indy posted(And thank you for your input. Now, if you will excuse us we'll go with the plan of the man we voted into office.)

Unfortunately we have no choice.
In much the same way that Bush made mistakes by not bothering to see what his decisions would be the cause of in the long run, much the same lack of forethought has gone into this (supposed) stimulus bill.

It appears they (the Democrats) have not the slightest clue as to who will spend this cash, nor how, not even when or where.

Now does that sound like responsible Government?

To me it sounds like a President that has not the slightest idea of how to deal with the situation he finds himself, but believes that to go the way the US has always gone before, namely throw money at the problem until the problem is solved or goes away.
Except that this time your Great Grandchildren will still be paying off the debt.
However by that time the great man who advocated 'Change we can believe in' will be but a far distant memory footnote in history.
 
So..http://www.debatepolitics.com/newreply.php?do=newreply&p=1057915604.. over 50% of america doesn't pay taxes? You sir are an idiot.

1. Nothing that he said indicated that he believed that 50% of Americans do not pay taxes.

2. Facts: Even when only considering the 135.7 million tax returns that were filed reporting positive gross incomes, 43 million did not have any federal income tax liability. That's 36%. That means that there were only 92.7 million tax returns resulted in a federal tax payment. When you add in the 15 million people who do not file tax returns at all, 41% of the population does not pay federal income taxes.

The Tax Foundation - Summary of Latest Federal Individual Income Tax Data

The Tax Foundation - Number of Americans Paying Zero Federal Income Tax Grows to 43.4 Million

PolitiFact | Thompson's tax numbers add up
 
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You think that you think. You are wrong. People who can think cannot say what you are saying because your speech contradicts to basics of thinking.


Spending a lot contradicts to investing. Investing in right things contradicts to taking probabilities.


And that is all in one short sentence of yours.

This has nothing to do with thinking, it has to do with the economic stimulus bill that is being debated about in the Senate right now. Remember? :2wave:

Spending does not contradict investing, because in order to invest you must spend. How else would the government invest in something? We may or may not reap the rewards in terms of money, but probably in terms of jobs, energy conservation, savings on car industry/oil industry, etc.
 
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.

The CBO and GAO are about the only two departments of the federal government worth a damn.

I think it is the GAO that try's to tell a non captive audience that we are really about $53 trillion in debt.

Remember folks that this "stimulus" is being added to the pile of crap debt for everyone roughly 30's and under.
 
The name of it is “The Stabilization Fund”. The inventor of the Plan is Vladimr Putin, a PhD in macroeconomics.

DOes anyone actually take you seriously? He studied in a university in a system with a completely FAILED economic system called the USSR.
 
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 :mrgreen:
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.
 
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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.
 
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.
 
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.
 
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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