Pump Priming, or Stimulus Package

railfancwb · Jan 25, 2008

Well, it now sounds like all the big wheels in Washington have agreed -- The United States will borrow $150 billion-with-a-b from the Chinese so that the American consumer can run down to his friendly neighborhood Wal-Mart and buy that wide-screen HDTV...which was no doubt Made in China. That $150 billion in turn will help China buy effective control of a few more USA companies to be hollowed out.

The optimist believes we live in the best of times; the pessimist agrees...

VirtualMachinist · Jan 25, 2008

But they have been busy selling our Treasury Bills to China for the last 6 years!! What do you think financed that war on,, what ever it is….
China doesn’t have to go to war with us cause they’ll own us lock, stock an barrel!

Comatose · Jan 25, 2008

Meanwhile, the rate cut decimates the dollar, which means I can export a ton of stuff. I just today picked up a dealer in Sweden.

Your mileage may vary, not available in all areas, etc.

DobermanDave · Jan 25, 2008

VirtualMachinist said:
But they have been busy selling our Treasury Bills to China for the last 6 years!! What do you think financed that war on,, what ever it is….
China doesn’t have to go to war with us cause they’ll own us lock, stock an barrel!

Great, so I can take this "free" money & pay my ever increasing city/State taxes. BTW mine went up 124% in 2006. Then City/state can pay the wonderful workers that demand more pay because of the increased taxes because of their wage increase .

Hmm...

gbent · Jan 25, 2008

Yes, we all need to spend our money in a very economically inefficient method. The more local labor content in what we buy, the bigger multiplier effect it will have.

Walma** (and several others) are very efficient distributors for China, Inc. Little mark-up, and few inefficiencies along the way.

This makes the effectiveness of the economic stimulus package much less than in years past. This is one time where efficiency does not work in favor of the general economy.

Joe788 · Jan 25, 2008

"Economic Stimulus." HA!

The best part of this whole thing, is that the people who are paying for the majority if this, are people who aren't even eligible to receive the money!

Hmmm, taking from the rich, and giving to the "poor"? What's that called again? Ohhh, that's right, COMMUNISM.

Hey, communism isn't so bad though. Look how well it worked for North Korea, and the Soviet Union?

If they actually wanted to "stimulate" the economy, they'd give manufacturers more breaks to create new jobs. For instance, if they gave me a voucher to pay for 50-75% of a new Matsuura MAM72-25V, then I would need to hire an employee or two, who would then earn, and spend a LOT more than 600 bucks. Then I'd use the added profits to buy more manufactured products for myself, like a new truck, or boat, or gun, or something else made in America that could continue to fuel the economy.

Instead, they hand out $600 bucks to people who are going to blow all of it on Chinese trinkets and crap from Wal-Mart.

Yay for economic stimulus!

stephen thomas · Jan 25, 2008

Joe, not that I totally disagree with the gist of your post, but this part is plain funny:

:"If they actually wanted to "stimulate" the economy, they'd give manufacturers more breaks to create new jobs. For instance, if they gave me a voucher to pay for 50-75% of a new _Matsuura MAM72-25V_," (emphasis added)

: "Instead, they hand out $600 bucks to people who are going to blow all of it on Chinese trinkets..."

Looks like whether the item is for production or consumption, (and the production machine will merely make items for consumption, probably out of import materials) general perception is that it will come from overseas... Maybe we are done for.

smt

Gary E · Jan 25, 2008

What they want the money to do as I understand it is to go to help fellow Americans...
you know, the money circulates from one to another each time it passes hands it is usefull and improves the economy....

So.... start with spending you 300 on a good old or young ....hooker...
In the end your gona get screwed anyway...

AndyF · Jan 25, 2008

Joe788 said:
If they actually wanted to "stimulate" the economy, they'd give manufacturers more breaks to create new jobs. For instance, if they gave me a voucher to pay for 50-75% of a new Matsuura MAM72-25V, then I would need to hire an employee or two, who would then earn, and spend a LOT more than 600 bucks. Then I'd use the added profits to buy more manufactured products for myself, like a new truck, or boat, or gun, or something else made in America that could continue to fuel the economy.

And if no one wants to buy what you make on your brand new Matsuura, the new guy is unemployed, you're on the hook for the balance of the machine price and the only one who has made out is the machinery dealer and importer.

On the other hand, if they give the $600 to everyone, lots of people who are up to their eyeballs in debt will pay down a little on their credit cards, the banks can breathe easier for a month and everyone can continue borrowing and spending money they don't have. Remember who this stimulus is for - Wall St. it has nothing to do with the so called "real economy" where most people live and work.

JoeFin · Jan 25, 2008

Joe788 said:
"Economic Stimulus." HA!

If they actually wanted to "stimulate" the economy, they'd give manufacturers more breaks to create new jobs.

I agree that a little shopping money that will be spent on Chinese made products will only contribute to the problem.

A large part of the problem is the staggering trade imbalance and enormous debt is making our money worthless very quickly. Add to the fact we don't manufacture enough goods in this country to even pay the interest on the debt owed and you can see why foriegn investors and multinational corporations are pulling out enforce.

True economic stimulous would drive the market for US manufacured goods.

Some thing is getting pumped alright and it ain't the economy

VirtualMachinist · Jan 25, 2008

Joe788 said:
"Economic Stimulus." HA!

The best part of this whole thing, is that the people who are paying for the majority if this, are people who aren't even eligible to receive the money!

Hmmm, taking from the rich, and giving to the "poor"? What's that called again? Ohhh, that's right, COMMUNISM.

Hey, communism isn't so bad though. Look how well it worked for North Korea, and the Soviet Union?

If they actually wanted to "stimulate" the economy, they'd give manufacturers more breaks to create new jobs. For instance, if they gave me a voucher to pay for 50-75% of a new Matsuura MAM72-25V, then I would need to hire an employee or two, who would then earn, and spend a LOT more than 600 bucks. Then I'd use the added profits to buy more manufactured products for myself, like a new truck, or boat, or gun, or something else made in America that could continue to fuel the economy.

Instead, they hand out $600 bucks to people who are going to blow all of it on Chinese trinkets and crap from Wal-Mart.

Yay for economic stimulus!

I completely agree with you. Small businesses provide 80% of the jobs!! If these idiots in DC could ever figure that out then do something to promote a better business environment in this country for small businesses, they wouldn’t have to keep robbing the till so to speck which in the end only helps devalue the dollar further. In my humble opinion they are going about this all wrong. But who am I,,. I only have 145 I.Q. After all their the ones blessed with all the brains!! But then again how come the rest of average citizens in this country can see so clearly all that’s wrong & the Politian’s are so busy blowing smoke up our collective asses expressing to us that they have a firm grasp of the problems! Which is from what I can tell, their way out in left field so far, they couldn’t possibly see home plate! Is there a hidden agenda that all Politian’s swing to? Like run our country straight into a communist style of government? Hand-outs to the poor while the very rich control everything! And when it comes to any foreign policy its amazing just how ball-less our so called fearless leaders really are! It scares the hell out me. All right I’ve said enough.

Richard Rogers · Jan 25, 2008

Like I've read before, this is an attempt to raise the shallow end of the pool by pouring in water taken from the deep end. It's the ones with the bucket that are going to make out in this scheme.

What you're forgetting, Virtual, is that this is a vote-buying racket. Small business owners are too inconsequential of a category to pander to. A man like you, with some honor, and whose vote is not for sale, tends to forget that, and/or is not base enough to recognize it.

Richard

Joe788 · Jan 25, 2008

AndyF said:
And if no one wants to buy what you make on your brand new Matsuura, the new guy is unemployed, you're on the hook for the balance of the machine price and the only one who has made out is the machinery dealer and importer.

On the other hand, if they give the $600 to everyone, lots of people who are up to their eyeballs in debt will pay down a little on their credit cards, the banks can breathe easier for a month and everyone can continue borrowing and spending money they don't have. Remember who this stimulus is for - Wall St. it has nothing to do with the so called "real economy" where most people live and work.

The people I personally know who are up to their eyeballs in debt, are in that position for a reason. A check for $600 is not going to make them see the err of their ways, and put it towards paying down their problems. They'll see it as, "Now I can spend $600 bucks on anything I want with no consequences.... even better, I can buy something that's $1200 bucks and I'll only have to charge half of it!"

But hey, taking from the rich and giving to the poor is great. Robin Hood was a hero!

tonystoolroom · Jan 25, 2008

I believe that there will be bad economic news in the future for the US,, making last weeks stock market gyrations a mere bump in the road. At some point in time we will reach the tipping point, and even the Fed won't be able to right the ship with rate cuts and other smoke and mirrors tricks.

The decimation of our manufacturing base that has been ongoing for the last 20 years will put in so far in a hole we can't get out.

jim rozen · Jan 25, 2008

"pouring in water taken from the deep end."

LOL!!

Sorta like daylight savings time: cutting the top off the blanket in the summer and
sewing it onto the bottom, to make it shorter, and then doing the reverse in the fall
to make it longer.

Stimulus package: does not even rise to the level of too little, too late. I would say
it is putting spackle on a walls in a house that is collapsing into the foundation. Bush
the first said it best: "Voodoo Economics."

They have no clue about what's going on an what caused it, and even less about
how to fix it. The notion of a sound economy based on a solid middle class has been
so badly destroyed during the present adminstrations tenure that it will be years before
things can be set right. Our government has given away the goods folks and this
present debacle is only the beginning of the fun.

Jim

Boris · Jan 25, 2008

Well you can tell its election year when the politico's start handing out cash :eek:

repulickons: we did it

demoprats : we did it

voters: why dont the corrupt pair of ya just f*** off

Boris

<<<<giving an outside view heh

morsetaper2 · Jan 25, 2008

Its an election year what do you expect?

SteveM · Jan 25, 2008

Richard Rogers said:
Like I've read before, this is an attempt to raise the shallow end of the pool by pouring in water taken from the deep end. It's the ones with the bucket that are going to make out in this scheme.

Richard, That's one of the best quotes on this topic. I hope you don't mind if I use that one.

Joe788 said:
If they actually wanted to "stimulate" the economy, they'd give manufacturers more breaks to create new jobs.

VirtualMachinist said:
Small businesses provide 80% of the jobs!! If these idiots in DC could ever figure that out then do something to promote a better business environment in this country for small businesses

The politicians are always railing about the top x% of taxpayers. The fact is that a lot of those top X% are small businesses that have their businesses on their personal tax returns. They say they are for small business, and then complain about the top x% of taxpayers and how it's unfair that they get to keep their money.

Poor people don't create jobs. Nobody is going to create a job with that $600.

When they did this refund thing the last time, it didn't help the economy. The economy turned around when we cut tax rates. How many times do we have to see the economy grow after tax cuts (e.g. Kennedy, Reagan) and shrink after tax increases (e.g from "read my lips" Bush 41) to get this.

The permanent income hypothesis says that people don't change their behavior when they get a temporary windfall. You want people to seriously spend money and invest, lower their taxes PERMANENTLY.

There was a quote on the radio today from someone who said "Don't spend it. You're going to need it when they take it back after the election"

Steve

JS · Jan 25, 2008

WTF?????????????????

borrow $150 billion is not the answer

Kind of like this ....For my next trick I am going to stand in a bucket and then lift myself up

It will not work

political idiots

Solutions

1 : get rid of nafta

2: get rid of the IRS

3: reinstate all tariffs

4: get rid of most of government

5: get rid of the Federal Reserve Banks reinstate GOLD AND SILVER MONEY

6: Apply proper standards to education instead of throwing money at the problem

7: the rest should in theory take care of itself

AndyF · Jan 26, 2008

Joe788 said:
But hey, taking from the rich and giving to the poor is great. Robin Hood was a hero!

Who is talking about taking from the rich. The idea is to borrow another $150 billion from the Chinese on top of the approximately $1 trillion which the US has borrowed from them in the past seven years.

In the last seven years while saying the economy is doing great, our government has almost doubled the national debt. When congress raises the debt ceiling by another trillion, with a t, dollars it isn't even page 10 news. Anyone who thinks this stimulus idea is taking from the rich hasn't really been paying attention to how the US government has been doing business for the past few years. Unless the US Government plans on stiffing the Chinese, it is our kids and grandkids who will be paying for this mess.

Maybe, just maybe it is time for US taxpayers to demand that if our government is spending $12 billion a month in Iraq and Afghanistan that they collect enough in taxes to pay for that expense. If they expand medicare with a prescripton drug program, they raise taxes to pay for the additional expense. The math is pretty simple - if you spend x, collect at least x in taxes, ideally collect x plus a little bit to pay down some debt.

Pump Priming, or Stimulus Package

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