Commentary: Stimulus is too low, too slow

[letsrock]

Commentary: Stimulus is too low, too slow - CNN.com

PRINCETON, New Jersey (CNN) -- Vice President Joseph Biden has acknowledged that the $787 billion economic stimulus program has not yet had the impact that the White House was looking for.

"We misread how bad the economy was," Biden said during an interview.

But Biden's account downplays the damaging compromises that the administration made on the stimulus package back in February, as well as the problems that have emerged in implementing the program.

Back in January and February, when the administration and Congress completed their work on the economic stimulus bill, several Democrats and liberal pundits warned that President Barack Obama's stimulus was not going to be enough to revitalize the economy.

While Republicans argued that Congress should do nothing other than cut taxes, Obama's Democratic critics said that another bad scenario was to pass an expensive and highly visible measure that would not actually accomplish the job. This would become a recipe for political attacks down the road, evidence that government can't help achieve economic stability and that President Obama's judgment on policy was suspect.

And there is some early evidence that this scenario is now playing out. According to the most recent Gallup Poll, many of the cherished independent voters in swing states who had shifted toward the Democrats in the 2006 and 2008 elections are now unhappy with the president's policies.

While President Obama's approval ratings remain at the high level of 56 percent, according to Gallup, these independents are concerned that the president's programs are resulting in too much government spending without achieving clear results.

With two million jobs having been lost since Obama started his presidency, it is difficult for many Americans to react well when Director of the White House National Economic Council Lawrence Summers says, "the stimulus is on track...."

Don't Miss
GOP slams Obama stimulus as "ineffective"
Zelizer: Democrats should act now
In Depth: Commentaries
The early criticism is now worth revisiting. When Congress agreed to the final stimulus in February 2009, liberal critics offered two major complaints. The first was that the level of spending in the bill was too low given the dire state of the economy.

"I'm not sure if the $800 billion stimulus plan is adequate to the problem," said Nobel Prize- winning Princeton economist Paul Krugman at Willamette University in January before the final deal had been reached. "We're facing one hell of a crisis and we'll need more than a Band-Aid . . . My guess is that the administration will be back later this year for a second round."

After initially complaining that the stimulus was too small, liberals were then furious when Obama agreed to cuts in the size of the stimulus in response to a small group of Senate centrists.

The second criticism had to do with where the money was directed. The liberal critics argued that the final stimulus bill focused too much on infrastructure programs and tax cuts, with not enough assistance being provided to state and local governments. Cuts in the legislative process eliminated funding for states to help with food stamps, school construction and more.

Finally, there is a problem with the stimulus that did not really become clear until after the bill passed. The implementation has been flawed. Currently, only a small percentage of the stimulus funds has been spent. While countries such as France have immediately made use of their stimulus money, the United States has gone slower.

Rightly concerned about the potential misuse of funds, the administration has moved too far in the direction of delaying the distribution of funds. The government's grinding bureaucratic process has also slowed down progress. And the U.S. relies heavily on third parties rather than directly spending the money.

The stimulus is experiencing problems similar to those of President Franklin Roosevelt's Public Works Administration. In 1933, the PWA was slowed down by administrator Harold Ickes due to concerns about corruption and inefficient projects. Ickes, who believed that PWA faced the "unattainable ideal of administering the greatest fund for construction in the history of the world without scandal," centralized decision-making and insisted on approving virtually every decision personally.

While many of his worries had merit, the White House was unhappy that needed dollars were not getting out the door and into the hands of workers. Roosevelt was fortunate because he could rely on Harry Hopkins and the Federal Emergency Relief Agency, which spent money as quickly as possible. Eventually, despite its problems, the PWA created a lot of jobs and accelerated the development of the South and the West.

As the unemployment rate continues to rise and the stock market swings up and down, it is difficult for many Americans to understand the purpose of allocating so much money but then not spending it as soon as possible. The worse that economic conditions become, the harder it is for existing levels of funding to have their desired impact.

Seeing results is important politically if the White House needs to ask for more money to jump-start the economy. The stimulus has become a litmus test through which to evaluate the president and this problem compounds the challenge of passing health care and other measures sought by Obama.

The best strategy for Obama is not to react as Biden and Summers did. Rather, the best strategy is to fix this. With all the doom and gloom about the president, he still enjoys strong standing with the public, and Democrats remain in a good political position.

It is worth remembering that many of FDR's earliest programs, such as the National Recovery Administration, did not succeed, and others, such as the PWA, experienced some problems during the implementation phase. But in the end, FDR's New Deal is widely considered by most historians to have been a tremendous success

While the economy was not fully revived until World War II, the New Deal provided relief. It significantly and steadily brought down levels of unemployment starting during FDR's first term. The jobless rate dropped from a high of nearly 25 percent in 1932 to just above 9 percent in 1937.

Even if, as some conservatives insist, you somehow consider people who were working in New Deal public works jobs to be jobless -- a dubious claim -- the unemployment rate fell by more than 10 percentage points during this period. The only rise in unemployment occurred in 1937-1938, and that was precipitated by FDR's reducing levels of public spending.

Today, the Obama administration cannot afford to stand still on the stimulus. The time has come to correct what's gone wrong with the existing program by speeding up spending and to consider the possibility of making a politically difficult request for more.

[Nickdfresh]

Originally Posted by letsrock

Commentary: Stimulus is too low, too slow - CNN.com

PRINCETON, New Jersey (CNN) -- Vice President Joseph Biden has acknowledged that the $787 billion economic stimulus program has not yet had the impact that the White House was looking for.

...

Of course, only a fraction of it has been spent yet. so why would it?

[Big Train]

No time like the present...Of the money that has been spent, it has failed to move the needle at all. Not even a fraction of a percent.

Maybe we can just avert it at this point, cut our losses and cancel the stimulus.

[Hardrock69]

Too many idiots are whining that it has not done any good, no jobs were created, blah blah.

Bullshit!

Within a month of the package being passed with signatures, etc. a major highway project got underway on the west side of Gnashville. Previously it was unsure when the State of Tennessee would come up with fundage.

That package created a buttload of jobs right off the bat.

Not only that, how long did it take for the global economy to get as bad as it has? A few days? A week? 2 weeks?

All these fucking idiots seem to think that as soon as the ink is dry on the spending bill all our woes will be cured. This is the most assinine attitude imaginable, but what can one expect from fucktards who cannot come up with a plan of their own, much less one that is better than what has been passed.

It is going to take YEARS before we recover.

All the Retardlicans need to save their hot air for their upcoming election campaigns, when they will desperately attempt to demonstrate to their constituency that they are relevant to the PRESENT, instead of demonstrating once again they are hopelessly mired in the 1950s with no desire or ability to move forward in their thinking past 1959.

[hideyoursheep]

Ah, the culture of instant gratification...

If it doesn't happen immediately, it's not soon enough.

[Big Train]

It's not really about instant gratification, but it is a fucking stimulus no? A tax rollback would have had a much greater effect in the short term.

Secondly, a construction project, while it provides jobs over the medium term (i.e. until the work is complete), it is not a new or a growth industry that will provide sustainable long term jobs. While I do agree with the concept of a "Green industry", I believe the money went to things that were not the best choices for it (i.e. wind farms vs. other alternative energy forms) for industrial growth.

Hardrock, that construction project that created "buttloads of job right off the bat", I'd love to see what the actual numbers are for the city/town that it is taking place in. They should be seeing spikes or at least leveling off of spending levels and sales tax in the area within 90 days. I'd love to see those numbers.

[Nickdfresh]

Originally Posted by Big Train

It's not really about instant gratification, but it is a fucking stimulus no? A tax rollback would have had a much greater effect in the short term.

...

No. No it wouldn't. "Rolling taxes back" is one of the least effective, most time consuming methods of stimulating anything. In fact, extending unemployment benefits and increasing other benefits for veterans, seniors, etc. is a much more effective, targeted way of increasing consumer spending and infusing money back into the economy...

[Big Train]

Yea I guess your right Nick. I should have kept that extra worker (who's deductions were paying into the system, and who's expenses were fueling the local economy), even though that person's salary was equal to my tax bill. Giving more benefits to someone who is not actively paying into the system currently is much better math.

[hideyoursheep]

Originally Posted by Big Train

Yea I guess your right Nick. I should have kept that extra worker (who's deductions were paying into the system, and who's expenses were fueling the local economy), even though that person's salary was equal to my tax bill. Giving more benefits to someone who is not actively paying into the system currently is much better math.

Eh, you did the right thing.

You can't make a ho a housewife, no matter how much you pay em.

[ELVIS]

Nick makes it up as he goes along...

[sadaist]

Originally Posted by Hardrock69

All these fucking idiots seem to think that as soon as the ink is dry on the spending bill all our woes will be cured. This is the most assinine attitude imaginable, but what can one expect from fucktards who cannot come up with a plan of their own, much less one that is better than what has been passed.

It is going to take YEARS before we recover.

Want to know why we think that? Because we were told that. By Obama, Biden, Pelosi, Reid, the whole crooked lying bunch of them. Remember when congress didn't have time to read it? It had to pass immediately to save the country?

The sure were quick at getting it signed. Why is that? Maybe because had everyone had a chance to digest what the stimulus really was it wouldn't have come close to passing. Even when it was passed more than half of all Americans were against it.

Sometimes you have to think a bit further than the typical Bush's fault, repukes, republitards, cuntservatives shtick.

Barack Obama is not King Midas.

Originally Posted by Hardrock69

That package created a buttload of jobs right off the bat.

[B]

While simultaneously 100 buttloads of jobs were lost. If the stimulus has created so many jobs, why has unemployment continued to rise...a lot? Shouldn't it have at the very least stabilized and held steady? (even though we were promised declining unemployment) The San Diego UT newspaper is just now running a story about how some of the money is on it's way and lists 5 or 6 things that will be done with it. Half of which are crap...the other half could be argued as crap.

$5 million to install new energy-efficient signs? So how many years until those new signs save the city $5 million on their electricity bill?

$2.6 million to conduct research about social phobias? I have a phobia about government spending getting out of control. Government spending to study that just exacerbates it.

Millions in stimulus funding headed to region

[Nickdfresh]

Originally Posted by ELVIS

Nick makes it up as he goes along...

Actually, it's based on statements by economists, Dr. Elvis PhD...

BTW, if mindlessly cutting taxes works so well and always seems to be the mantra-answer, how come we're fucked years after Bush's tax cuts (in the time of War)?

[Big Train]

Originally Posted by hideyoursheep

Eh, you did the right thing.

You can't make a ho a housewife, no matter how much you pay em.

I should have known. At least you guys will get more quality time together during her unemployment, so that's a plus.

[Big Train]

Originally Posted by Nickdfresh

Actually, it's based on statements by economists, Dr. Elvis PhD...

BTW, if mindlessly cutting taxes works so well and always seems to be the mantra-answer, how come we're fucked years after Bush's tax cuts (in the time of War)?

Because Bush spent way to much, which we have debated endlessly here.

The "mindless tax cuts" in and of themselves are fundamentally sound.

[letsrock]

Originally Posted by Big Train

I should have known. At least you guys will get more quality time together during her unemployment, so that's a plus.

It should be easy to turn a housewife into a ho.

[ZahZoo]

Problem is... all that money went to the wrong places IMO.

If this money had been distributed to the "people" rather than the mismanaged banking, automotive and government programs... it would have had an immediate ripple effect in both local and global economies. Quick fix but then nothing to sustain it though.

I still think reducing taxes or in some way getting money infused at a consumer level will do more to build jobs and turn things around. Throwing money at financial institutions does nothing but line deep greedy pockets that got us in this mess moreso than anything.

GM & Chrysler should have went into bankrupcy last year or whenever they bottomed out. The bailouts were ineffective other than delaying then forcing the inevitable.

Regulatory changes to banking/Wall Street still need work, but the measures taken to date to turn them around appear to be helping but we need to reel in those greedy bastards quickly.

Also think the current speculatory crap driving oil prices needs to be eliminated. I view the sharp increases in oil/gas prices was a significant trigger in the economies globally heading south.

[letsrock]

Your dead on.
money isnt going to help much.
But remember if they govt gives it to the people then they loose power.

[Nickdfresh]

Originally Posted by Big Train

Because Bush spent way to much, which we have debated endlessly here.

The "mindless tax cuts" in and of themselves are fundamentally sound.

How did "spending too much" destroy the economy? Please be specific as I seemed to have missed all that...

[Guitar Shark]

Originally Posted by Big Train

Because Bush spent way to much, which we have debated endlessly here.

The "mindless tax cuts" in and of themselves are fundamentally sound.

Tax cuts ARE a form of spending. You just pay for it in future years, like we are doing right now.

I find it amusing that some of you are advocating for more. Crazy.

[Igosplut]

Originally Posted by ZahZoo

Also think the current speculatory crap driving oil prices needs to be eliminated. I view the sharp increases in oil/gas prices was a significant trigger in the economies globally heading south.

I don't know how plausible it is now, but I think oil should be removed from the stock market like pre 1983.....

[Big Train]

Originally Posted by Nickdfresh

How did "spending too much" destroy the economy? Please be specific as I seemed to have missed all that...

REALLY? You of all people are now going to claim it all missed you?

The "twin wars" and all that, if I must remind you.

[Big Train]

Originally Posted by Guitar Shark

Tax cuts ARE a form of spending. You just pay for it in future years, like we are doing right now.

I find it amusing that some of you are advocating for more. Crazy.

Large government budgets are spending. Taxes finance a budget. Cut the budgets (as they are doing now) and cut the tax needed to finance a budget.

Taxes are resources. When you free them up, put them in companies and individuals hands, they go to another need, usually a form of direct expense/spending, which stimulates more economic activity. Giving it away to the government, who very slowly and not very well planned out.

I find it odd some people advocate for new taxes (cap and trade), but to each his own I guess.

[Hardrock69]

I saw a figure thrown about that if they took the total spending of the stimulus package, split it up into the number of people who pay income tax each year, then each person would get like $600,000 or something like that. Perhaps an urban legend, but if they want to put cash directly into the hands of the people, WRITE THEM A FUCKING CHECK FOR $100,000! THEN SEND IT TO THEM IN THE MAIL!

Talk about boosting short-term spending and also investment!

Give ME fucking 800 grand, and lotta that cash will be invested in something, the rest would be SPENT DIRECTLY into the economy.


Thing is, we DO need some shit fixed! Healthcare reform, the tax structure, etc.

We can't keep doing business as the same old same old....that is what the insurance and the oil companies want! Fuck no they don't want any more oversight or regulation!
They wanna keep making billions at our expense.....KEEP THINGS AS THEY HAVE ALWAYS BEEN!

This is now the 21st Century.

Time to update all of the systems of the United States.
Got to progress.
Not stagnate like the dinosaurs wish we would.
Dreaming of 1953.


Gee Beave!
Gee Wally!

[Nickdfresh]

Originally Posted by Big Train

REALLY? You of all people are now going to claim it all missed you?

The "twin wars" and all that, if I must remind you.

"Twin wars" of which one was justified as the attacks of 9/11 caused enormous economic damage (and was relatively cheap to fight at one point)...

But one could argue that the economic mismanagement of the previous regime beginning with the ERON and World Com bullshit may have had an even bigger impact...

And the lesson is you can fight wars, or cut taxes. But you can't do both without underfunding gov't and merely transferring the tax burden to the "Blue States," which is pretty much what the tax cuts were all about.

[Nickdfresh]

Originally Posted by Big Train

Large government budgets are spending. Taxes finance a budget. Cut the budgets (as they are doing now) and cut the tax needed to finance a budget.

Taxes are resources. When you free them up, put them in companies and individuals hands, they go to another need, usually a form of direct expense/spending, which stimulates more economic activity. Giving it away to the government, who very slowly and not very well planned out.

I find it odd some people advocate for new taxes (cap and trade), but to each his own I guess.

Or just have a system of massive loopholes enabling most corporations to pay almost no taxes at all...

[ZahZoo]

Originally Posted by Hardrock69

I saw a figure thrown about that if they took the total spending of the stimulus package, split it up into the number of people who pay income tax each year, then each person would get like $600,000 or something like that. Perhaps an urban legend, but if they want to put cash directly into the hands of the people, WRITE THEM A FUCKING CHECK FOR $100,000! THEN SEND IT TO THEM IN THE MAIL!

Talk about boosting short-term spending and also investment!

I was looking at this yesterday... most recent stats from the IRS site showed 106 million returns filed for 2006. Simple math of dividing the $787 billion by that figure would net a little over $7000 per taxpayer.

While a payout like this would have an immediate effect on the economy in spending and local/state tax revenues... it would be just a quick ripple and we'd be right back in the muck in short order.

Got to fix what got us here... spending alone won't do it... cuts alone won't do it... combined will help. But curtailing certain banking and big industry abuses needs a long hard look.

[letsrock]

But that $7000 could help someone not loose a home.
Or help with college costs.
Or someone might buy a used car.

Either way it could of been a better move, but we arent afforded the opportunity to know.

[Big Train]

Hot Air » Blog Archive » Video: Obama vs Obama on stimulus

Some good video evidence against this administration.

Keep shifting the goal line....

[Big Train]

Originally Posted by Nickdfresh

"Twin wars" of which one was justified as the attacks of 9/11 caused enormous economic damage (and was relatively cheap to fight at one point)...

But one could argue that the economic mismanagement of the previous regime beginning with the ERON and World Com bullshit may have had an even bigger impact...

And the lesson is you can fight wars, or cut taxes. But you can't do both without underfunding gov't and merely transferring the tax burden to the "Blue States," which is pretty much what the tax cuts were all about.

Worldcom is not your best example, since the merger (1998-1999) and majority of the scandal (save the last year) happened under Clinton.

Enron is Bush's to own.

However, the economic mismanagement of private firms, even large ones, does not rock the economy as much as poorly run government who taxes everyone and everything.

I'll agree with your "lesson". I will counter with another lesson. You can't kill business and overfund goverment as a solution to the original lesson.

[Guitar Shark]

Originally Posted by Big Train

Large government budgets are spending. Taxes finance a budget. Cut the budgets (as they are doing now) and cut the tax needed to finance a budget.

Taxes are resources. When you free them up, put them in companies and individuals hands, they go to another need, usually a form of direct expense/spending, which stimulates more economic activity. Giving it away to the government, who very slowly and not very well planned out.

That sounds good and all, but history does not bear these claims out.

[hideyoursheep]

Originally Posted by Big Train

Giving it away to the government, who very slowly and not very well planned out.

????

Speaking of people not very well planned out who need money....

[letsrock]

Moore was once promising, but man he really flipped out.

[Kristy]

Originally Posted by ZahZoo

Problem is... all that money went to the wrong places IMO.

If this money had been distributed to the "people" rather than the mismanaged banking, automotive and government programs... it would have had an immediate ripple effect in both local and global economies. Quick fix but then nothing to sustain it though.

It wasn't even a quick fix. All we did was (re)feed the parasites that gave us this mess in the first place. Rethuglicans can whine like whipped puppies all they want about how Obama is dismantling this, socializing that but in the end its the linear government thinking from all sides that has left us fucked. You know, throw enough money at a problem until it goes away mindset.

[hideyoursheep]

Originally Posted by letsrock

Moore was once promising, but man he really flipped out.

Then you have at last 1 thing in common.

[sadaist]

Originally Posted by letsrock

But that $7000 could help someone not loose a home.
Or help with college costs.
Or someone might buy a used car.

Either way it could of been a better move, but we arent afforded the opportunity to know.

I think it would have lasted longer than just a quick ripple. If you take your $7k and buy my old car, then I take it and pay someone to finally build that patio cover, he takes it and buys those quads his family has been wanting, the guy who sold the quads takes it and starts up that pool service business he's been wanting to try, the guy that sold the pool route uses it as a down payment on a house, etc.... And all that is just from one $7k check. Imagine the effect 106 million of those checks could have had.

Some people act as if once that money is spent, it's gone. Sure it will get smaller with each transaction as taxes are taken out, but that's just more revenue for the government to do all of these "shovel ready projects". You can't really compare it to when everyone received a $200 - $400 check. That amount just really isn't enough to make a large dent. Hell, a large family can't get out of the grocery store for less than $200.

[Blackflag]

Originally Posted by hideyoursheep

Then you have at last 1 thing in common.

I hate Michael Moore, too.

[Big Train]

Originally Posted by Guitar Shark

That sounds good and all, but history does not bear these claims out.

Of course it doesn't, as it has never actually been done. Now might be a good time to try don't ya think?

[hideyoursheep]

Originally Posted by Blackflag

I hate Michael Moore, too.

I don't hate Moore. He's much more creative at explaining his POV than his right wing counterparts.

[Nickdfresh]

Originally Posted by Big Train

Worldcom is not your best example, since the merger (1998-1999) and majority of the scandal (save the last year) happened under Clinton.

Enron is Bush's to own.

However, the economic mismanagement of private firms, even large ones, does not rock the economy as much as poorly run government who taxes everyone and everything.

I'll agree with your "lesson". I will counter with another lesson. You can't kill business and overfund goverment as a solution to the original lesson.

Ah yes, the mythologies that enable corporate lobbyists to continue their plague of legalized bribery, er, "political action committees" unabated, and insure that the United States is run solely in the interests of the special interests...

[hideyoursheep]

Originally Posted by Big Train

Large government budgets are spending. Taxes finance a budget. Cut the budgets (as they are doing now) and cut the tax needed to finance a budget.

Taxes are resources. When you free them up, put them in companies and individuals hands, they go to another need, usually a form of direct expense/spending, which stimulates more economic activity. Giving it away to the government, who very slowly and not very well planned out.

Originally Posted by Guitar Shark

That sounds good and all, but history does not bear these claims out.

Originally Posted by Big Train

Of course it doesn't, as it has never actually been done. Now might be a good time to try don't ya think?

Exactly what is it that has "never been done", and why now do you think it is a good time to try?

That's right...you're being asked once again to explain your vague posts that skirt the issue without actually having ever addressed it to begin with. Try to hold it together.

This sentence kills me..

Originally Posted by Big Train

Giving it away to the government, who very slowly and not very well planned out.

What...the...FUCK does that even mean?



You pretend to be a financial wizard on the Internets, could you at least make sense?