The Stimulus Bill ~ dnd

I don’t like it. Not one little bit. The Republicans call it a “spending” bill. Well duh. The government is the only entity that can inject liquidity into the economy at this time. The problem with the House bill is that it’s just a bunch of appropriations that Bush vetoed. It’s not that many of those appropriations shouldn’t be passed; it’s that many will do little to stimulate the economy. That gives political ammunition to the opposition, and boy are they taking advantage of it.

The Republicans think tax cuts are the silver bullet. Some argue for a one year moratorium on payroll taxes. The idea is that people will use this extra money to buy things and business will use this money to hire. There are three problems: 1) the amount seen by taxpayers and business isn’t enough to move the economy much, if at all, 2) payroll taxes fund Social Security and Medicare, two programs that need all the cash they can get, 3) the payroll tax is one of the most regressive taxes we have. This idea gives more money to those who need it less. They also argue for a business tax cut, so that American business’ can compete with business in other industrialized countries with lower business taxes. No argument here, but it’s not a stimulus measure. As Barney Frank said: “I never saw a tax cut build a bridge.”

No amount of spending will work unless we simultaneously solve the housing crisis and the banking problems.

Here’s what President Obama should do: gather his economic advisory team and members of the Congressional Budget Office. No politicians allowed. Have them come up with a set of recommendations that will address these issues in the short term, medium term and long term. Have them rank the recommendations in order of efficacy. Have them state the pros and cons of each of the recommendations. And have them explain, in a way a 10 year old can understand, why each recommendation should work. If a 10 year old can’t understand it, how can we expect members of congress to understand it? This will be the basis of the stimulus plan. The economic advisory team and CBO will monitor it closely and tweak things as needed.

Problem solved. You’re welcome.

dnd – the armchair economist.

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60 Comments

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60 responses to “The Stimulus Bill ~ dnd

  1. Thank you armchair economist, but I’m not sure I agree with you that the parts of the bill that have been stripped out wouldn’t stimulate the economy, especially the funds to rehab our crumbling schools.

  2. horsedooty

    as I have said before along with many others, tax breaks don’t create jobs. Customers create jobs. Since it is an Economic Stimulus package, wouldn’t spending be a large part of the package. I don’t quite understand the Rebugs other than their desire to block any legislation that the Dems put forward.

  3. horsedooty

    Brian,
    you know how the Repugs hate education. Scares them silly. How can they run roughshod over the electric if they are educated. I once hear a RWingnut talk show host on the radio here tell Jimmy Carter that his creating the Dept of Education was a political payoff. Carter pretty much told this clown he was full of shit and had no idea what he thought he knew. Sorta like when Zig told Mojo he was full of shit. Great day in right wing radio.

  4. Octuplets Unveiled, Mom Defends Decision, Grandmother Calls Unconscionable (VIDEO)

    Suleman toured the neonatal unit and introduced her babies, with names like Noah and Malia, to the world.

    She] said daughter Nadya Suleman, 33 and single, has “no means to support” fourteen children.

    Angela Suleman said that she’s been housing and supporting her daughter Nadya and her six grandchildren by a previous in vitro fertilization procedure in a “cramped” apartment for years.

    Suleman said that her daughter “spent a lot of money on toys,” but never contributed rent or food money and failed to tell her mother about more than $167,000 that records show she received from worker’s compensation claims.

    http://www.huffingtonpost.com/2009/02/09/octuplets-unveiled-mom-de_n_165142.html

  5. dnd

    Ya know Doots, the GI bill was probably the single greatest program to build a strong middle class. And a strong and prosperous middle class resulted in the rich getting richer. So it’s somewhat confusing that the right wants to stratify education.

  6. horsedooty

    well, dnd, the right is only out for the Upper Echelon, the Mega-Rich. That is why they are so out of touch with everyone else. I used the GI Bill.

    Of course, it could be that the Ultra Right are just stupid.

  7. chef sheila

    Good morning everyone…

    If the right had it their way, their would be no GI BIll….in their way of thinking it wastes money.

  8. Nannymm

    Or just plain selfish.

  9. I go with selfish, and to that let me add uncaring!

  10. The $800 Billion Gamble: Economists Say Stimulus Cuts Could Be “Disastrous”

    http://www.huffingtonpost.com/2009/02/09/the-800-billion-gamble-ec_n_165146.html

  11. Obama Has Upper Hand in Stimulus Fight
    Obama’s 67% approval rating on the stimulus is more than twice that of Republicans

    http://www.gallup.com/poll/114202/Obama-Upper-Hand-Stimulus-Fight.aspx

  12. Nannymm

    Ok. Economists say those cuts could be disastrous. Repugs don’t support the bill and don’t intend to vote for it, with the exception of three in the Senate. Ultimately, Obama and the dems are responsible for the success or failure of this stimulus package and will be held accountable by the American public. Therefore, why the hell would the Dems agree to any repug demands???? If this is going to be a Democratic bill, supported only by Dems and the dems are going to sink or swim depending on how well it works, then the Dems should get everything they want in the bill, everything they think will lead to success. It makes NO SENSE to include things like tax cuts that Dems don’t believe will work! So, back to what I said yesterday.
    Tell the repugs to pound salt, make this a Democratic bill. Pass it in the house and let the repugs filibuster in the Senate. Bring in the cots and let them talk till they are hoarse, pass out from exhaustion or just give in. Then vote and pass it with Dems only. Enough of this catering to the opposition for THREE crummy votes!!!

  13. dnd

    Interesting link on the stimulus cuts Brian. Jeffrey Sachs is no dummy. Small incremental dithering stimulus doesn’t do much but waste time and money. For a stimulus to work, you need the economic equivalent of the Powell Doctrine: go in with overwhelming force, keep it up as long as needed, then when things are stable, the market will take care of the rest.

    BTW, for those who missed Sachs on Zacharia’s GPS yesterday, it’s worth watching online:

    http://www.cnn.com/CNN/Programs/fareed.zakaria.gps/

  14. Nanny I think the presidents approval rating answers that question, he promised a bipartisan admin, and at the very least has to make an effort in that direction. Now that the repugs have rejected his efforts I think we’ll see some major changes in how he deals with the repugs in the future.

  15. dnd

    Nannymm,
    “It makes NO SENSE to include things like tax cuts that Dems don’t believe will work! ”

    The point of my post was not what the Democrats think will work, or the Republicans think will work, it’s to use what the most knowledgeable experts think will work. This serves two purposes: 1) it’ll solve the problem and 2) the President can say to both sides why the stuff they want in the bill but isn’t stimulus will just have to wait. If they don’t like that, he can use the bully pulpit to tell the nation why the choices were made.

    dnd – the armchair political scientist 😉

  16. Nannymm

    I agree about the future, Brian. But he needs to start with this bill! Three repugs have been allowed to hijack this bill and set it up for failure, a failure that they and all repugs will then place at the feet of Obama and the Democratic, a failure the repugs will HAMMER dems with in 2010 and again in 2012. Obama would be a fool to allow that. If this were a truly bipartisan bill with both dems and repugs having a vested interest in its success, I’d say fine. But it is not. It will be a Democratic bill and only Dems will get credit or blame. Thus it has to be a bill that we believe will work.

  17. Nannymm

    Well, dnd, it seems that the economists tend to agree with the Dems.

  18. Nanny I feel this bill is basically a done deal, and what was stripped out will be made up for in future bills, with or without repug support.

  19. dnd

    Brian,
    “Now that the repugs have rejected his efforts I think we’ll see some major changes in how he deals with the repugs in the future.”

    I don’t think so. I think Obama is playing the Republicans like a fiddle. The country is sick of partisanship, particularly in these difficult times. By him extending his hand, and the Republicans slapping it away, it engenders Obama’s sincerity to help America out of this mess.

  20. Like the post dnd…. It’s so realistic and measurable.

    I was thinking along the lines of what Brian just said…Obama used this as a way to gauge what he could expect from the Republicans. They (repugs) now have played their hand, and all of America is watching. I believe it was tactical as well as promised, and that information will serve the Obama Administration well in the years to come.

    Time will tell …. btw …..good day everyone…Happy Monday!

    back to work…

  21. Nannymm

    I fear that you are right. But remember what I’m saying. Dems will be hammered for this if it fails. And I’m beginning to believe it will fail due to all the tax cuts and to all the aid to states being stripped out.
    I still have hope that Nancy Pelosi will put her foot down and that Obama will support her.

  22. Nannymm

    BTW…in my fury at the repugs, I forgot to say that I like your post, dnd. You make alot of sense. I wish this whole stimulus bill had been approached as you suggested and maybe it isn’t too late. But I think it may be.

  23. “But remember what I’m saying. Dems will be hammered for this if it fails.”

    No guts, no glory!

  24. We will all be hammered if it fails! no matter whether a you are rich or poor or repug or dem.

    However if we see it failing….then I believe another plan will come about….

    At some point, people have to have faith that everything will be okay……the economic fear is currently crippling the entire economy….more so then necessary.(imo)

    Even companies with tons of cash on hand have cut spending and jobs….all because of the “fud factor,” Fear Uncertainty and Doubt….Consumers with money have also stopped spending.

    Republicans excel in selling FEAR.

    It will end, things will turn around….and better days are ahead of us.

    It’s sunny here today…..and above freezing 😀

  25. dnd

    Nannymm,
    I think you’re right that the Republicans, particularly those in the House, are looking to the mid-term elections as their first priority and the country second. If they keep this up, it will bite them in the ass.

  26. got to get back to work…..

    ~peas

    🙂

  27. dnd

    Pretty shrewd of Obama to go to Elkhart. 15.3% unemployment. Symbolism matters.

  28. Nannymm

    Where else is he going? I can’t find an itinerary.

  29. dnd

    Nannymm,
    News conf. tonight at 8pm ET.

  30. Nannymm

    Thanks,dnd. I thought he was making other stops but I guess those are later in the week.

  31. dnd

    Michelle visits Interior. Honored by Native Americans (BIA is part of Interior). Looking like the First Lady will be a great ambassador for the White House.

  32. yeah, I saw that, pretty cool!

  33. I wish God would hurry up and take him!

  34. The Myth of Bipartisanship

    Given the consistent failure of compromise between Republicans and Democrats, it might be time to take away the minority’s most harmful weapon: the filibuster.

    http://www.prospect.org/cs/articles?article=the_myth_of_bipartisanship

  35. dnd

    Bev,
    Let’s see, who was the last politician that thought God wanted him to be president, and looked at how that turned out 😉

  36. dnd

    I don’t see Sean Hannity being much of a beer drinker. Too plebeian.

    Kool-Aid yes. Beer no.

  37. He should be drinking radiator flush.

  38. dnd

    Rep. Dan Burton on the 7pm ET Hardball, blaming the “Democrat” party, trotted out the Republican talking point of Jimmy Carter. This really steams me. Carter made mistakes, but mostly his administration faced a confluence of extraordinary bad events; a hangover from the Nixon era. The way Republicans attacked Hamilton Jordan, one of the most decent people ever to grace the WH, was reprehensible.

    Carter is the US’s only living statesman. You don’t see Democrats attacking Gerald Ford and those goofy “Whip Inflation Now” buttons. Inflation was whipped because of the policy of Carter’s appointment of Paul Volcker to Fed Chief.

    So my message to Republicans is, if you want to win over us moderate independents, LAY OFF CARTER!

    Ok, off my soapbox. For a while 😉

  39. dnd

    BTW, prior to Carter, the last statesman we had was Sen. Mike Mansfield from Montana. Maybe George Mitchell will be next. I don’t see a lot of other prospective candidates.

  40. How refreshing, a president who can think on his feet.

  41. dnd

    How refreshing, a president who can speak in complete sentences.

  42. That too, and actually pronounce every word correctly!

  43. chuck todd is a little nervous!

  44. dnd

    Dumb is out. Smart is in. And just in the nick of time.

  45. Some people have yet to figure that out dnd.

    🙂

  46. dnd

    Yeah Brian, those who are dumb are befuddled as to why they are no longer in. 😉

  47. dnd

    Todd’s question was either ill though out or a softball. Either way, Obama hit it out of the park.

  48. dnd

    Clicking around the dial this morning, all the major pundits give Obama major props for the presser last night. Even those who don’t care for him or the stimulus plan.

  49. dog's eye view

    Good morning all.

    I think Congress did not do President Obama any favors with the bill they threw together. Listening to CSpan callers: virtually no one argues for doing nothing; everyone rational realizes stimulus/spending of some sort (undetermined) is urgent.

    Don’t understand why Congress did not put up a leaner bill. You can absolutely make a case for R&D spending, major aid to localities/states — which otherwise struggle to provide services in an economic downturn and would have to lay off staff (whose services are often more needed in said downturn). You can make a case for infrastructure development, public works, bricks and mortar and electronic. For educational spending, including HeadStart. Even very wealthy counties are shedding or not hiring educators. If you cannot replace an old, energy inefficient school in the coming 5-10 years, sounds like now is the time to improve it. Local jobs. Better conditions for kids learning.

    It is a new era, and a new way of doing business. Tom Daschle was the first to fall due to public’s closer attention to “business as usual” and finding it severely lacking.

    Democratic appropriators in Congress didn’t get it. This should not have been a grab bag for deserving projects along for the ride.

    Sounds like Pres Obama will get this package through, and would guess more GOP will support it (no crystal ball there).

    But Congress loaded this thing up like the last boat off the Titanic, and did the president no favors.

    Would suspect we are going to see more stimulus packages, one after another, tailored for stubborn problems.

    JFK did not challenge Americans to put a man on the moon the following year.

    Last, I think Josh Marshall has evaluating this bill backward: rather than hunting down “pork”, why not highlight what is necessary or worth a serious try?

    And therein the problem: no one is sure what will buy/stimulate our way out of this crisis.

    FWIW: heard from a rabid GOP dogwalking friend yesterday: GOP meme is that new spending provides 30 cents or less bang for the buck spent.

    I don’t think that’s accurate. Have you guys heard a better figure?

    The 30 cents or less reminds me of the Army Corps of Engineers formula for funding public works; recall that about $1.03 (or less!) in return per dollar spent was their minimum for considering a project.

  50. dog's eye view

    PS: dnd: liked your column very much, and your suggestion on how best to structure stimulus spending.

  51. dog's eye view

    Senator Tom Udall (NM) is on CSpan 1 now. There’s a good change!

  52. dnd

    Tom Udall’s cousin Mark is also in the Senate. Wonder how often that happens?

  53. dog's eye view

    Maybe not often enough!

    signed,
    dog the anti-dynasticist with some exceptions

  54. dog's eye view

    Did you all see the footage/photos of Rem Koolhaas-designed Mandarin Oriental Hotel, Beijing, that burned spectacularly yesterday?

    If you are in China, you might have a hard time seeing them today. Footage/photos have been scrubbed from several sites.

    http://www.nytimes.com/2009/02/11/world/asia/11beijing.html?hp

    report by Andrew Jacobs in NYTimes: …”Investigators have placed the blame on China Central Television, whose employees defied the police by staging their illegal pyrotechnics too close to the unfinished complex. In a statement posted on its Web site, the network apologized for the damage the fire caused, saying it was deeply grieved “for the severe damage the fire caused to the country’s property,” according to The Associated Press.

    But what Beijing residents could plainly see — the smoking shell of architect Rem Koolhaas’s Mandarin Oriental Hotel — was harder to glimpse on the Internet in China, on television or in the city’s newspapers.

    There were no pictures on the front page of The Beijing News. The home page of Xinhua, the official news agency, featured a photo from another tragedy: a stampede in South Korea that left four people dead. Throughout the morning, CCTV’s brief bulletins about the blaze omitted footage of the burning tower.

    Even before the flames had been extinguished early Tuesday, images of the burning hotel had been removed from the country’s main Internet portals. By afternoon, the entire story had been buried.

    A directive sent out by propaganda officials left no room for error: “No photos, no video clips, no in-depth reports,” read the memo …”

  55. dnd

    I hope when the stimulus bill goes to conference, Obama takes my advice 😉

  56. dnd

    Why does Pete Sessions hate America?

    “Insurgency, we understand perhaps a little bit more because of the Taliban,” Sessions said during a meeting yesterday with Hotline editors. “And that is that they went about systematically understanding how to disrupt and change a person’s entire processes.

    http://thinkprogress.org/2009/02/05/sessions-gop-insurgency/

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