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post #91 of 261 (permalink) Old 11-16-2008, 12:08 AM
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I am not sure if your statement is tongue in cheek, but yes, it is just a number in a computer, and it is severely manipulated.

The other countries of the world will not trade a single item for an "infinity dollar" of worthless value.

If a hamburger costs 1 million dollars, they won't trade with us at all. Being that we need others and are no longer self sufficient, we'll suffer.

A taxcut is needed because the gov needs to get money into the hands of the spenders, not the executives who are afraid to loan the money to the people that need it. See? See my new post.
Only if the other countries are not inflating equally would it be a problem.

Isn't a direct injection of tax refund stimulus and extension of unemployment benefits better ? The former puts money into people's hands immediately and the latter helps those without income who are out of luck in your tax cut proposal.
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post #92 of 261 (permalink) Old 11-16-2008, 12:27 AM
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Only if the other countries are not inflating equally would it be a problem.

Isn't a direct injection of tax refund stimulus and extension of unemployment benefits better ? The former puts money into people's hands immediately and the latter helps those without income who are out of luck in your tax cut proposal.
True on the other countries! It seems that USA is the center of the storm, so going from $1 hamburgers to $1,000,000 hamburgers would be a problem for us, and not them. Other countries have people who know what they're doing running the country, as is now plainly obvious. But they of course will be affected by our economy.

Didn't we try the $600 tax refund path?

Note that I am discussing a $6000 refund, and I really don't care how it goes out. The policy makers should favor those who will recycle it in the USA, and not put in in a swiss bank account that does no good for USA.

The only reason for mentioning workers was because it is their money, not the unproductive people. For them, they are usually on some gov payout, or pension, or retirement payout. They're all suffering on inflation, the markets, and the policies.

A $6000 stimulus will do the trick.

If this does not happen, it will be because we're already on our way to stagflation/inflation/hyperinflation. I really don't see that at this point.

So, $6000 per worker, or over the cliff.

The $6000 will go to banks, retail, automakers, fast food, restaurants, etc within 6 months or less.

We may need to do this for 2 years.
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post #93 of 261 (permalink) Old 11-16-2008, 12:41 AM
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My general assumption is that the trickle down approach is fine in a growing economy, or mild or shallow recessions. So BushCo has tried what Reagan tried (did Bush1 lower taxes? Don't think so), and you see what an absolute failure that is.

First, that bill which was so urgently needed will not help for another 3-12 months, depending on what that braintrust is doing at the moment.

Secondly, we're no longer in a growing economy. This is depression like economy. This could be hyperinflation, or stagflation, but right now looks most like the Great Depression II. If so, you (Gov) had better get money into the hand of people to pay their bills, buy some more crap from China, and boost the economy.

If they continue to believe (as someone here suggested) that trickle down from the Wall street crooks and the big three is going to help the people, that would be a mistake.

What we're really talking about is unfreezing the economy. Nothing does that better than money flowing up, trickle UP.

140M workers will mostly recycle their savings immediately into the economy, or pay down debt.

They'll need to re open circuit city and best buy will have lines at the checkout again.

Now, this is not the best solution since all these goods are mostly made in China/elsewhere, but at least it will unfreeze the markets and put people BACK to work.

We're on the cliff between the current fake 6% unemployment, staring right at 20%.

Yes, the debt was 5.5T 8 years ago, and now the ceiling is 11.3T, and my suggestion would increase it to 12T.

The debt argument is long lost.

As I recall back in the day, "WE JUST OWE IT TO OURSELVES!" and "IT DOESN'T MATTER!".

It looks like it does, but we won't find out for another 2-5 years when the dollar is worth less.


EDIT: McBear, it would have been smart to not rack up the 5.5T to 11.3T in the last 8 years, and instead have had some for a rainy day. NOW is the time to rack up the large debts!!! Still, one might start to wonder where the money has gone. Everyone is or will soon be broke. The local Govs are or will soon all be broke. The corporations can't get loans either.

Where did the money go???

It was not there to begin with is probably the correct answer, but if it did go somewhere, it is overseas and probably in a swiss bank account.
I fully agree that getting money in the hands of consumers is a good idea BUT, in the current economy, what kind of money? Borrow $1T, much from foreign investors and spread it to 150M workers comes to about $500 per month for a year. That will help many folks catch up or maybe spend up some but it does nothing to generate continuing GDP on the short end. Until consumer confidence is improved folks will just squirrel away as much as they can, with good reason.

Tax cuts and rebates work if the economy is good. When the economy is bad you put money where it will impact the most people the quickest with the biggest bang. Sending much of it to China with an increased trade deficit would not really cause that bang.

Bailing out the car companies or the financial sector are not great ideas. They fail on several levels. But to reestablish confidence in the banking system much of the bailout was necessary. To keep the hedge fund floats intact, much of the bailout was necessary. It was not intended as a parachute for the CEOs, it was intended to boost confidence in the system and to get commerce kicked off again with a strong foundation.

With the auto companies, under most circumstances, you loan them enough money to smoothly go through Chapter 11 and be done with it. These are not normal circumstances.

Much like everything else that the media covers, they have quit focusing on the true dangers that this economy is in. It is old news. But the reasons that brought everyone to DC to work on the bailout are all still in play. Some to a lesser degree but still in play.

Paulson is not doing a good job of instilling confidence in the consumer. So far all he is doing is propping up Wall Street on the surface. I assume more foundation work is being done under the covers.

To your question "what has happened to the money". Well, nearly $6Trillion has gone overseas with the trade deficit in the past eight years. Another Tril has gone to Iraq. Some of the rest has gone away with depreciation of the dollar and unemployment as appropriations exceed revenue.

Or maybe it is all at a strip club in Daytona Beach.

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post #94 of 261 (permalink) Old 11-16-2008, 12:46 AM
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True on the other countries! It seems that USA is the center of the storm, so going from $1 hamburgers to $1,000,000 hamburgers would be a problem for us, and not them. Other countries have people who know what they're doing running the country, as is now plainly obvious. But they of course will be affected by our economy.

Didn't we try the $600 tax refund path?

Note that I am discussing a $6000 refund, and I really don't care how it goes out. The policy makers should favor those who will recycle it in the USA, and not put in in a swiss bank account that does no good for USA.

The only reason for mentioning workers was because it is their money, not the unproductive people. For them, they are usually on some gov payout, or pension, or retirement payout. They're all suffering on inflation, the markets, and the policies.

A $6000 stimulus will do the trick.

If this does not happen, it will be because we're already on our way to stagflation/inflation/hyperinflation. I really don't see that at this point.

So, $6000 per worker, or over the cliff.

The $6000 will go to banks, retail, automakers, fast food, restaurants, etc within 6 months or less.

We may need to do this for 2 years.
Two years would be $2T.

You say $6000 will do the trick. How?

And why not give it to the 10M unemployed also? That would spend it just as well if stimulating the economy is the goal. You say they are "unproductive". But most have worked and paid taxes for much of their lives. That is not unproductive. You suggest that a man who worked at a plant for 23 years and is laid off is of less value than a 18 year old flipping burgers at his first job.

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post #95 of 261 (permalink) Old 11-16-2008, 12:58 AM
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I am not sure if your statement is tongue in cheek, but yes, it is just a number in a computer, and it is severely manipulated.
..
Nothing I say is completely in jest.
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post #96 of 261 (permalink) Old 11-16-2008, 01:47 AM
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The $6000 will go to banks, retail, automakers, fast food, restaurants, etc within 6 months or less.
It'll all go to China via Wal-Mart, except some of it to Saudi Arabia, via ExxonMobil.

And a LI'L bit to THUNDERBIRD.



BTW Who the F are you???
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post #97 of 261 (permalink) Old 11-16-2008, 11:08 AM
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I fully agree that getting money in the hands of consumers is a good idea BUT, in the current economy, what kind of money? Borrow $1T, much from foreign investors and spread it to 150M workers comes to about $500 per month for a year. That will help many folks catch up or maybe spend up some but it does nothing to generate continuing GDP on the short end. Until consumer confidence is improved folks will just squirrel away as much as they can, with good reason.

Tax cuts and rebates work if the economy is good. When the economy is bad you put money where it will impact the most people the quickest with the biggest bang. Sending much of it to China with an increased trade deficit would not really cause that bang.

Bailing out the car companies or the financial sector are not great ideas. They fail on several levels. But to reestablish confidence in the banking system much of the bailout was necessary. To keep the hedge fund floats intact, much of the bailout was necessary. It was not intended as a parachute for the CEOs, it was intended to boost confidence in the system and to get commerce kicked off again with a strong foundation.

With the auto companies, under most circumstances, you loan them enough money to smoothly go through Chapter 11 and be done with it. These are not normal circumstances.

Much like everything else that the media covers, they have quit focusing on the true dangers that this economy is in. It is old news. But the reasons that brought everyone to DC to work on the bailout are all still in play. Some to a lesser degree but still in play.

Paulson is not doing a good job of instilling confidence in the consumer. So far all he is doing is propping up Wall Street on the surface. I assume more foundation work is being done under the covers.

To your question "what has happened to the money". Well, nearly $6Trillion has gone overseas with the trade deficit in the past eight years. Another Tril has gone to Iraq. Some of the rest has gone away with depreciation of the dollar and unemployment as appropriations exceed revenue.

Or maybe it is all at a strip club in Daytona Beach.
Consumers will squirrel it away in banks accounts (helps banks), retail (helps retail), paydown mortgage (helps banks), etc, etc.

It is a LESSER EVIL than 850B for the banks (150B for AIG alone) = total 1T from congress and the FED.

I noted this morning that the dems and the repubs are ONLY discussing 25-50B from the 850B, not additional!!! My mistake and many others here.

If we lose the auto industry, we'll be paying tens of billions in pensions, retirement benefits, and so forth. $25 in loans makes perfect sense, if 850B for wall street and 150 AIG makes sense!

Yes, it has gone overseas, and the best way to keep it here, is to keep manufacturing here. Service only does so much, and that will become more competitive from abroad as well.

Moving on to next reply...
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post #98 of 261 (permalink) Old 11-16-2008, 11:16 AM
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Two years would be $2T.

You say $6000 will do the trick. How?

And why not give it to the 10M unemployed also? That would spend it just as well if stimulating the economy is the goal. You say they are "unproductive". But most have worked and paid taxes for much of their lives. That is not unproductive. You suggest that a man who worked at a plant for 23 years and is laid off is of less value than a 18 year old flipping burgers at his first job.
Point taken on the unemployed casualties of the BushCo OILigarchy neo-con economy.

They should be extend benefits until depression/severe recession is over. They will spend their money, which is exactly what we need.

My point on tax breaks is that it belongs to those paying, and now I agree those that WERE employed. Pensions need to be protected as well, and while we're at it, give the SS retirees a REAL COLA adjustment, since inflation has been running 10%+, and they were not properly compensated.

In general, in a depression, people will hoard money, and in inflation, people will hoard goods, and spend money.

We need to stimulate spending (yes, AGAIN), and that is best done by rolling back the taxes.

BushCo gave the top end a nice 5% decrease in 2003 and the rest of us chumps 1%. That was probably ok since inflation was running high with the war, and so forth. NOW, that needs to be brought back in balance with another 4% reduction, as well as an across the board 33% reduction in payroll taxes, with the said benefits above to unemployed, retirees, etc.

This is the only way based on what I see now as the current conditions.
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post #99 of 261 (permalink) Old 11-16-2008, 02:07 PM
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Point taken on the unemployed casualties of the BushCo OILigarchy neo-con economy.

They should be extend benefits until depression/severe recession is over. They will spend their money, which is exactly what we need.

My point on tax breaks is that it belongs to those paying, and now I agree those that WERE employed. Pensions need to be protected as well, and while we're at it, give the SS retirees a REAL COLA adjustment, since inflation has been running 10%+, and they were not properly compensated.

In general, in a depression, people will hoard money, and in inflation, people will hoard goods, and spend money.

We need to stimulate spending (yes, AGAIN), and that is best done by rolling back the taxes.

BushCo gave the top end a nice 5% decrease in 2003 and the rest of us chumps 1%. That was probably ok since inflation was running high with the war, and so forth. NOW, that needs to be brought back in balance with another 4% reduction, as well as an across the board 33% reduction in payroll taxes, with the said benefits above to unemployed, retirees, etc.

This is the only way based on what I see now as the current conditions.
Much of that makes sense as discrete components but the math just doesn't add up. You can't reduce the revenue base while at the same time dump money into the system to shore up the foundation and restore confidence in the various systems [financial, government].

This government is already seeing a reduction of cash into the revenue stream due to unemployment, decrease in corporate output, increased trade deficit and retirement of the babyboomers. Couple that with the increase in spending for medicare bailouts, war, rebuilding of infrastructure and the math just doesn't work out for cutting taxes and "hoping" that much of the money trickles up to the coffers. In a bad economy, that is nearly as bad as trickle down.

Stabilization and restoration of confidence on a world wide level has got to be the first two things that are achieved. Otherwise all the tax cuts in the world will only result in further recession as folks further spend their way into debt.

McBear,
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post #100 of 261 (permalink) Old 11-16-2008, 02:40 PM
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Much of that makes sense as discrete components but the math just doesn't add up. You can't reduce the revenue base while at the same time dump money into the system to shore up the foundation and restore confidence in the various systems [financial, government].

This government is already seeing a reduction of cash into the revenue stream due to unemployment, decrease in corporate output, increased trade deficit and retirement of the babyboomers. Couple that with the increase in spending for medicare bailouts, war, rebuilding of infrastructure and the math just doesn't work out for cutting taxes and "hoping" that much of the money trickles up to the coffers. In a bad economy, that is nearly as bad as trickle down.

Stabilization and restoration of confidence on a world wide level has got to be the first two things that are achieved. Otherwise all the tax cuts in the world will only result in further recession as folks further spend their way into debt.

Well, we'll just have to disagree on some points.

The debt adding up is a discussion for 2001, not now. AIG and the bailout has carved out 1T in our future taxes, and it will not do a bit of good with the fools currently running the country, and probably not with the new batch either.

Balancing budgets is a 90's concept of history.

Today we have issues that only a new new deal will fix, I'm afraid. I just don't want another silly needless works project but instead the kickbacks to the workers (unemployed/retired/etc).

That WILL work. It is the best of a very bad list of options, where the whys and how's were lost in the last decades elections and policies.

Also, don't forget that in 1980, we had 1T in debt, and Reagan did a fine job of stimulating growth with 3T in spending over 8 years. He did get us out of the worst recession since the 30's. Since today's mess is far worse, you can expect similar expenditures ADJUSTED for inflation. 10T more, anyone?

While I am not an expert, I did accurately predict that Bush would have us 10T in debt when he left office. I thought I'd be a one trillion off TIL this Fall.

So I am now predicting that in 8 years, the debt will stand at $20T.

Prepare!
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