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What Would People Think?

Sunday, February 15, 2009

A Useful Summary of the Stimulus Package

So I'm kind of shocked that not one of my friends who has registered an opinion on the blogosphere is in favor the stimulus package. Not that I really have a huge opinion on it....I feel this is outside my realm of expertise. But my mind is boggled when Kenny's conservative friend Dave (who is allegedly like me in most every way except politics....certainly we seem to share theological views) seems more in favor of some sort of government spending to save the economy than Jeff.

Anyways, whatever your views, the New York Times has a useful table which summarizes the various spending measures. You can organize by category like "Aid to States", "Tax Cuts for Individuals", and "Housing". So it's a useful source of information.

And now, having done none of the actual work it took to create the table, I will say "you're welcome."


  • You know the White Stripes song, "You've Got Her in Your Pocket"? Yeah, that's already the song that pops into China's head whenever they think of the United States because of the amount of our debt they own. Now let's try spending $800 billion more that we don't have. I could go on about more ideological objections to the stimulus, but that's the pragmatic one: we just plain don't have the money.

    That having been said, I will concede that someone who knows more about the underpinnings of the economy is more qualified than I to make decisions regarding stimulus. All I know is basic arithmetic: 0 - 787B = -787B.

    By Blogger Mike, at 2/16/2009 10:21 AM  

  • Well of course it works the same way with tax cuts. Whether you're spending more or taking less in, the debt is going to accumulate.

    I'm agreed that significant debt spending is a very bad thing, and I'd like to see us head towards balance. However, I would say that, absent the debt spending concern, I feel like government spending is a better way to create jobs in time of need than tax cuts (and then transition away from government spending to (potentially) more efficient private enterprise once things are on an upswing). I'd just like to see more direct job creation than spending to groups that will hopefully create jobs.

    Also, I have a good excuse for not posting on this stuff... The bar is in a week.

    By Blogger Matthew B. Novak, at 2/16/2009 11:23 AM  

  • I'm not arguing in favor of tax cuts. We can't afford those either, especially after the previous genius occupying the White House decided to make the historically unprecedented move of cutting taxes and going to war (twice!).

    Still, gargantuan though it may be, it's still only a one-time expenditure. I like to think that Obama will try and rein in the budget deficit, as he has talked about before, once this "crisis" passes. But then I'm reminded that there's nothing more permanent than a temporary government solution (see entry under "Social Security").

    By Blogger Mike, at 2/16/2009 3:33 PM  

  • This crisis was caused by a giant lack of liquidity in the credit markets. Banks lost their shirts, therefore they have no money to invest. The problem with this huge increase in the debt is that it pushes investment money into economically useless T-bills and away from private sector job creators. Essentially, we're pumping money into the system only to take it out again.

    Oh, and whenever we contract debt, it's us and our kids that are going to have to pay for it down the road. I don't particularly like that.

    By Blogger Jeff, at 2/16/2009 11:45 PM  

  • I share Jeff's distaste for debt in general, and public debt in particular. And, while I think that some stimulus could be good, I don't really think *this* stimulus is (and I remain rather unconvinced that really good stimulus would make it through our political system).

    What gets my goat about the present bill is not its size - which is ginormous - but rather the sort of things being funded.

    NASA, for instance, is an agency I support. I don't think it's an effective place to spend stimulus money. The Alternative Minimum Tax is something that ought to be permanently addressed - instead our annual fix is lumped into this bill as "stimulus," and is one of the single most expensive parts of the bill, despite the fact that it's an ongoing issue.

    If we're going to have stimulus, we should do it in the most effective ways we can. Broad tax cuts? Not so effective, because they end up very diluted. Taking a look at the US GDP in 2008 shows you that the impact of last years' rebates was very limited - it hit and ran like a NFL player at a bar.

    In every dollar spent, there needs to be a pair of serious questions asked:

    1) Is this the best use of this money?
    2) Is spending this money worth the cost of spending it?

    Each dollar we spend in the stimulus package is not only a dollar we might have spent elsewhere, it's a dollar that we will be charged interest on until the end of time (or whenever we pay down our national debt, which is highly unlikely before then).

    By Blogger -Dave, at 2/19/2009 6:09 PM  

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