10 Reasons To Oppose Stimulus Package

[eulessismore]

Even the infrastructure parts of this scheme won't work. Nobody is going to run out and create an asphalt company or a general contractor to build roads and bridges, especially with the credit market the way it is. The contracts will go to existing firms and other work will be put off. Few jobs, if any, will be created.

Here are two much better ideas than this trillion dollar spending bill.

1. Permanent tax cuts across all of the income brackets, or

B. Guaranteed loans to businesses who are trying to expand but can't due to the credit market freeze

I'll have to agree with you on the guaranteed loans, but not necessarily ONLY for expansion; I would also make startups eligible. I've come to this position due to reading what Mariano Martinez, the Dallas restaurateur, offered as advice to the President-Elect in a DMN feature just after the election.

Mariano Martinez, restaurateur

I started my first business with $500 and a Small Business Administration loan. I now own six restaurants that employ more than 600. But my plans for expansion are on hold.

Encourage and stimulate growth of businesses like mine or, at the very least, don't hinder growth with more taxes and costly government intervention.

I'd say that his opening sentence is a testament to government help for starting small businesses, and the second one just as powerfully endorses your idea for help financing business expansion. I really had no idea before reading this that the Mariano's restaurants (including the Hacienda Ranch in this area) had become that big, and I certainly never thought of them as having SBA help in getting started.

I do like your idea, although being somewhat left of where I perceive you stand politically, for different reasons. I think businesses need help in getting the kind of financing they need, but that the nation's financial institutions have failed us as badly as the government entities charged with regulating them. Expecting the bankers and regulators to work together for the greater good of the nation is kind of like expecting those who got us in the ditch to get us out.

I'm sure there are problems with guaranteeing loans, but it seems like it could be something that responds to the problem stated by the Fed and the Treasury Dept: unavailability of credit for businesses (and some individuals, such as student loan recipients). The TARP, which was supposedly designed to free up that credit, was just too much of a blank check to the Treasury Department, and is as confusing to most people as the confusing financial instruments that supposedly got us into that mess. I guess they were confusing; Alan Greenspan finally admitted that he didn't understand them, disabusing me of any notion that there was a smart guy in charge of the Fed.

Follow the link below to the entire feature.

DMN: Dallas business leaders advice to Obama

[SilverEagle]

Ed Wallace has some interesting thoughts about our economic situation.

The Conundrum

Ed Wallace,

Special to the Star-Telegram

For the last eight years it has been almost a constant mantra that Americans have failed themselves by not putting enough aside into personal savings. That observation has gotten shriller within the past few years, warning that we actually had a negative savings rate – meaning we were going into debt just to keep our heads above water. This was considered a bad thing for our nation’s economy.

Today, those same voices are saying that one of the major problems in this current economic downturn is the fact that people have ceased their rampant consumerism and are now saving money every chance they get. So much so that their non-spending is aggravating the economy’s downturn, already in trouble thanks to our banking crisis. And yes, this too is considered a bad thing for our economy.

OK, which is it? Too much spending or too little?

In the same way, we can’t win with the price of oil. Last year, when gasoline prices shot past $4 a gallon and the price of light sweet crude on the futures market went above $147 a barrel, that was a bad thing – a sure-fire way to throw any nation into a recession. But now that oil has collapsed, prices falling as low as $33 a barrel, well, that’s a bad thing too! It will keep money from being put into critical investments that ensure a constant (and hopefully increasing) crude supply in the future, when growth returns to the world market.

Naturally, Detroit has been caught in the lose-lose paradigm. For decades our automakers were relentlessly bashed for not building vehicles of higher quality – and thus lost market share, primarily to the Japanese automakers, which was a bad thing. But then Detroit apparently saw the light and came up with far better product across their lineups, and guess what happened? People started keeping those vehicles longer and longer. That sank the nation’s overall volume of car sales, and that brought Detroit into another era of financial crisis. And that’s a bad thing, too.

Oh, and the housing market. From 2000 to 2005, with prices in many markets in America constantly rising, the wise saw the housing market as a bubble and therefore a bad thing – but when that bubble broke and housing prices collapsed, things got sure-enough bad.

It is our national conundrum: Apparently, no matter what we do, it’s not healthy for the long-term success of the American economy. Save too little, save too much; too many purchases or too few; car quality improves but sales go down; housing booms, housing busts – nothing works quite right.

And then we wonder why no government bailout is working as advertised. Moreover, because no one can say what really is the smart thing to do, no one knows whether future stimulus packages will work as projected.

There are two reasons for all these scenarios, making this period seem more like an economic roller coaster than it needs to. One is that as consumers, we live in the now and we want results now. The other reason is that our system of statistical analysis is so far skewed toward fantasy we never quite know where we are at any given time.

Who’s Supposed to Announce This?

Then too, comparing today’s problems with those of the past only confuses the issue and compounds our ignorance. An example: Recently many articles have stated that December’s car sales were close to the total sold in August of 1982, annualizing to just fewer than 10 million total sales. That would be great as a benchmark statistic, except that the motorized workforce in America is almost 50 percent larger now; therefore, those sales figures today don’t mean what they did in 1982. Total sales equal a substantially lower percentage because the size of the potential car market has gone up by almost 50 percent.

The most telling pertinent statistic is that in 1983 there were approximately 160 million vehicles in America; therefore, an annualized rate of 10 million sales would mean that one out of 16 vehicles was being replaced that year. Today at the same annualized sales rate, we are replacing only one out of every 22 vehicles. Therein lies the real fact that has automakers from Detroit to Tokyo to Stuttgart worried.

That statistic, however, probably doesn’t carry over to local markets. Most new car dealers now sell far more used cars than they once did, and that changes the replacement component. Many individuals are in fact replacing their older cars, but not with brand new ones. So the low national volume of new car sales is a problem for manufacturers, but not necessarily for our local dealers.

Lies, Damned Lies and Statistics

The excessive debt of the past few years is likewise misunderstood, because it doesn’t fall into the "one size fits all" category. Sure, some people charged or borrowed too much because their incomes failed to rise along with inflation; each year that went by saw them slipping further down the economic ladder.

Another economic group had no problem going further into debt because their outstanding loans and repayment schedules still fell well within the proper limits of debt to income. Put another way, in many years in this decade Americans were taking out $800 billion a year in home equity loans. Those who were using such loans to pay debts they already owed were and are mostly their creditors’ problem children. Those who took out those loans for remodeling or to expand their properties were far more likely to repay them.

Also, I’ve covered it in this column before, but the media really should quit comparing today’s unemployment with that of years gone by. It’s worse than misleading, because how we calculate those statistics is so different now: Saying that today’s unemployment numbers are far better than 1982’s is a serious misstatement of fact. The same is true for our National GDP, Inflation and Money Supply figures.

And this all takes us to our bailouts and stimulus packages, whatever final form they might take.

You’re Supposed to Learn from Mistakes

Those on the left want the monies to save homeowners and others who have gotten in over their head financially. That’s an admirably altruistic thing to do – except that it continues to prop up the price of overvalued homes, which is exactly what those mortgages did that started this mess. But if excessive debt and overpriced assets got us into this mess, how can any sane adult think that adding more excessive debt to keep assets overvalued will get us out of it?

Those on the right see this as an opportunity to permanently save their previous tax cuts and maybe add a few more along the way. Obviously, many who benefit would love to see that political wing win out. The problem is that this theory – that tax cuts for the wealthiest Americans somehow trickle down to the public at large in an expanded economy – has so often been disproven. It was wrong when Treasury Secretary Andrew Mellon first put it into play in 1927; it was proven wrong in the early 80s and proven wrong again in this decade. If you want upper-end tax cuts, great, but quit saying that somehow they raise the economy for everyone. History shows that all it does is take us into a period of massive speculation, followed by collapses in our banking system. Doubt that? Remember 1929, 1987 and today.

What to Do Now

So, what’s the real answer? Probably common sense. Fortunately, that’s something we seem to have in relative abundance in Texas. Those who bought homes they could not afford are experiencing great tragedy, but keeping their fantasy alive is neither prudent financially nor even viable long term.

That is the hardest line I’ve ever written in this column. But it’s true: For every family that loses a home, another will find housing more affordable because of the price fall-off. In time, even those who lose their homes will reenter the market, and they too will find housing more affordable the next time around.

Save the banks, yes, but quit saving the speculators who bet wrong on virtually everything in this past decade. Who wouldn’t love to go to Vegas if the government covered all of our losses at the blackjack table, but we kept all of our winnings? That’s what many speculators have been enjoying, and it’s wrong.

So: Immediately declare null and void all derivative contracts worldwide where the investor doesn’t have a vested interest in the property that the derivative was purchased for. After all, you can’t buy life insurance on someone you are not financially bound to, so why should someone be able to buy a derivative (insurance) on a mortgage or bond package they don’t own? That’s nothing more than a side bet on someone else’s action, and it leads some individuals to bet on disaster because it makes them rich while everyone else suffers. But our government is covering those side bets now – and it needs to end.

For us, mostly, I’d say it’s time to find a way to bring more companies and individuals to Texas to start over again. That 150-year-old tradition ensures that in the future, we’ll continue to grow and prosper no matter what.

[oldguystudent]

Save the banks, yes, but quit saving the speculators who bet wrong on virtually everything in this past decade. Who wouldn’t love to go to Vegas if the government covered all of our losses at the blackjack table, but we kept all of our winnings? That’s what many speculators have been enjoying, and it’s wrong.

So: Immediately declare null and void all derivative contracts worldwide where the investor doesn’t have a vested interest in the property that the derivative was purchased for. After all, you can’t buy life insurance on someone you are not financially bound to, so why should someone be able to buy a derivative (insurance) on a mortgage or bond package they don’t own? That’s nothing more than a side bet on someone else’s action, and it leads some individuals to bet on disaster because it makes them rich while everyone else suffers. But our government is covering those side bets now – and it needs to end.

I think that sums it up quite nicely.

[UNTflyer]

The longer this bill is out there, the more we uncover the pork.

[meangreendork]

The longer this bill is out there, the more we uncover the pork.

Basically, yes. And that's a good thing. There are a few programs in it that aren't 100% stimulus, but are probably beneficial to the country, like the infrastructure program, but I think a good chunk of it can be cut. I like the idea of the stimulus package, but it could do without a few hundred billion.

[UNTflyer]

Basically, yes. And that's a good thing. There are a few programs in it that aren't 100% stimulus, but are probably beneficial to the country, like the infrastructure program, but I think a good chunk of it can be cut. I like the idea of the stimulus package, but it could do without a few hundred billion.

And I've really got no problem with building roads and bridges and all that good stuff, but to tell the American people that it will create jobs bothers me. It won't create jobs, it will simply shift contractors from one project to another. At best it will keep people working.

Edited February 2, 2009 by UNTflyer

[GreenBat]

And I've really got no problem with building roads and bridges and all that good stuff, but to tell the American people that it will create jobs bothers me. It won't create jobs, it will simply shift contractors from one project to another. At best it will keep people working.

And That's a bad thing?

[UNTflyer]

And That's a bad thing?

No, I'm just saying that to promise the infrastructure spending will create jobs is one of which I am extremely skeptical.

[KRAM1]

Prbably posted before, but ONLY 10???? There are really too many to count! Some really good comments here on this TERRIBLE non-STIMULUS bill being proposed. Too bad our "elected representatives" don't seem to care that much. They probably "care", they just have no clue. I would venture to say, that most of the folks who will be voting on this package of Pork have 1) not read it and 2) care only for the Pork!

Good Grief. Is this what has become of the US Congress?

[meangreendork]

No, I'm just saying that to promise the infrastructure spending will create jobs is one of which I am extremely skeptical.

Depends on how they do it. Mind you, we badly need infrastructure repair. But we need to do it with local labor, contractors in areas near the repair and construction work. We don't need it to be like what was the TTC. I don't want our money being shot off to some random contractor outfit based in Singapore or something. If the money stays local or within the state of work being done, then this'll bring the jobs that are needed.

The community healthcare part I'm iffy on. I heard a thing on NPR and it mentions that the community healthcare part would create jobs, but it would do it a very roundabout way, and that minimizes its benefits. The real benefit it's supposed to have is that it's working with preventative healthcare, getting those who would normally skip medical visits until an illness became serious to see a doctor earlier and get diagnosed and treated earlier, therefore reducing the amount of money on upper-level, higher-cost healthcare by spending a lower amount beforehand when it's easier and cheaper to treat someone. The cause behind this is great, and the jobs would be created via the community programs, but I'm iffy on how effective this would be considering the audience it's aimed at.

Instead of just voting no on this package, I'm hoping the Senate will go through and try to cut some of the excess off of it and make it work properly. We can't spend-spend and expect to fix things, and we can't tax cut-tax cut and expect to fix things.

[GreenBat]

Just a question. When did the infastructure begin to fail? Was it under Clinton? Bush? A democratic controled congress? a Republican controlled congress?

This is a serious question. Who do we blame? Or should we just find something to fix the problem?

[UNTflyer]

Just a question. When did the infastructure begin to fail? Was it under Clinton? Bush? A democratic controled congress? a Republican controlled congress?

This is a serious question. Who do we blame? Or should we just find something to fix the problem?

Things begin to erode and fail as soon as they're built.

NBC had a report last night that said every single infrastructure system received a "D" or lower: roads, water, sewage, public transit, electricity and energy. Air transportation got a "C-". Now, I find it hard to believe that our infrastructure is that bad, and it makes me wonder if they are cheerleading for a bad bill. Does anyone actually believe our infrastructure rates near the bottom of this grade scale? Where did India and China rate?

[meangreendork]

Things begin to erode and fail as soon as they're built.

NBC had a report last night that said every single infrastructure system received a "D" or lower: roads, water, sewage, public transit, electricity and energy. Air transportation got a "C-". Now, I find it hard to believe that our infrastructure is that bad, and it makes me wonder if they are cheerleading for a bad bill. Does anyone actually believe our infrastructure rates near the bottom of this grade scale? Where did India and China rate?

That one bridge collapse is pretty much a sign of how bad our infrastructure is. But really, it's more than just that, I'm hoping public transport gets in there, too. That is, if it's run properly, hiring locals, making use of biodiesel and any number of prereqs.

[UNTflyer]

That one bridge collapse is pretty much a sign of how bad our infrastructure is. But really, it's more than just that, I'm hoping public transport gets in there, too. That is, if it's run properly, hiring locals, making use of biodiesel and any number of prereqs.

Actually the preliminary investigation indicates a design flaw coupled with increased weight of construction vehicles + rush hour traffic sitting on the bride, but we won't know for a while.

[BeanCounterGrad'03]

construction vehicles + rush hour traffic sitting on the bride

Sounds painful

[keith]

That one bridge collapse is pretty much a sign of how bad our infrastructure is. But really, it's more than just that, I'm hoping public transport gets in there, too. That is, if it's run properly, hiring locals, making use of biodiesel and any number of prereqs.

I think they were "fixing" it when it collapsed. Now the government is going to force lots of things to get "fixed" whether it needs it or not. God help us all.

Keith

[KRAM1]

When the government says anything about "helping you" cover your rear and duck because you are about to get something stuck up you that you do not want. Government "help" is one reason our last serious recession turned into what is now called the "GREAT DEPRESSION". Seems, my reasearch shows the economy was starting on an upswing BEFORE FDR launched his massive government bailout that drove unemployment figures through the roof.

Bear in mind that as of right now 92% of all mortgages in this country are being paid on time and as agreed! Never has 8% of anything been the blame for so many ills!!!!!

The "non-stimulus" package is a mess of the highest order...PORK and more PORK...most of which has absolutely NOTHING to do with stimulating the econmoy or getting folks back to work. UGH...a complete mess! Don't confuse "social engineering and pet projects" with economic stiumlus! This is OBama PAYING BACK HIS "FRIENDS" WHO PUT HIM IN OFFICE AND CATERING TO A BUNCH OF FOLKS WHO REALLY HAVE NO KNOWLEDGE OF ECONOMICS AT ALL. It's payback time on the backs of all American taxpayers for years and years to come. Can this snowball be stopped? I doubt it, so hold on to your rears!

[eulessismore]

When the government says anything about "helping you" cover your rear and duck because you are about to get something stuck up you that you do not want. Government "help" is one reason our last serious recession turned into what is now called the "GREAT DEPRESSION". Seems, my reasearch shows the economy was starting on an upswing BEFORE FDR launched his massive government bailout that drove unemployment figures through the roof.

Bear in mind that as of right now 92% of all mortgages in this country are being paid on time and as agreed! Never has 8% of anything been the blame for so many ills!!!!!

The "non-stimulus" package is a mess of the highest order...PORK and more PORK...most of which has absolutely NOTHING to do with stimulating the econmoy or getting folks back to work. UGH...a complete mess! Don't confuse "social engineering and pet projects" with economic stiumlus! This is OBama PAYING BACK HIS "FRIENDS" WHO PUT HIM IN OFFICE AND CATERING TO A BUNCH OF FOLKS WHO REALLY HAVE NO KNOWLEDGE OF ECONOMICS AT ALL. It's payback time on the backs of all American taxpayers for years and years to come. Can this snowball be stopped? I doubt it, so hold on to your rears!

I've been wondering for a while now, who really does have any great knowledge of economics? I have this weird theory that the greatest experts (yes, liberals, conservatives, libertarians, private sector, government, and academia based) were the ones who got us where we are now. I certainly don't think at this point that anyone working for a financial institution, or regulating one, should earn a salary any higher than someone holding the highest military rank in the U.S. I do agree with F.D.R. (in so many words), noone is worth a million dollars. For the guy who was C.E.O. of WAMU for about a week just before they were seized, partly sold to Chase, and partly went into the largest S&L failure in history, and the remaining part into bankruptcy, to make about a million dollars a day for that week he was on the job, was a real shame.

[UNTflyer]

Now Obama is going to back down on the "buy American" policy, which would restrict stimulus spending to American goods and services. Why? because the EU said they didn't like it.

So now Europe is going to dictate our spending policies.

http://www.timesonline.co.uk/tol/news/worl...icle5655115.ece

[UNTflyer]

I may do an about face on this stimulus package!!! Nancy Pelosi says every month we don't have a stimulus, 500 MILLION Americans lose their jobs.

Oh dear.

x8hMJVXt09E

[Censored by Laurie]

Now Obama is going to back down on the "buy American" policy, which would restrict stimulus spending to American goods and services. Why? because the EU said they didn't like it.

So now Europe is going to dictate our spending policies.

http://www.timesonline.co.uk/tol/news/worl...icle5655115.ece

Our economy's performance directly effects the rest of the world (Europe being included under the heading of "rest of the world."). We've spent 8 years giving the middle finger to every other country in the world...maybe a little bit of collaberation and interjection of outside ideas is a good thing.

Nothing is set in stone...Europe isn't dictating anything, merely raising an objection. The more brains working on this thing the better...not just for America, but the rest of the world.

[oldguystudent]

I may do an about face on this stimulus package!!! Nancy Pelosi says every month we don't have a stimulus, 500 MILLION Americans lose their jobs.

Oh dear.

I truly have no idea how Nancy Pelosi ever came to power. She's driven by extreme agenda (which I don't tolerate on either side of the aisle). But on top of that, she seems incapable of independent thought or intelligible articulation. Meh. I guess if you live in California, you run on subsidized free middle school lunch room abortions, socialism, and wind farms. If you live in Kansas*, you run on subsidized free middle school lunch room Jesus and abstinence, robber barons, and hemi engines.

*Nothing against Kansas. Was the first "red" state that came to mind that wasn't Texas.

[oldguystudent]

Check this out.

Where the money goes

[Guest JohnDenver]

Check this out.

Where the money goes

That is the worst chart I have seen in ... well... ever.

[oldguystudent]

That is the worst chart I have seen in ... well... ever.

Drawn by an SMU grad no doubt.