Editore"s Note
Tilting at Windmills

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January 24, 2008
By: Kevin Drum

THE STIMULUS DEAL....Apparently a fiscal stimulus package has been tentatively agreed to by both sides:

Under the deal, nearly everyone earning a paycheck would receive at least $300 from the Internal Revenue Service. Most workers would receive rebates of $600 each, or $1,200 per couple. Families with children would receive an additional payment of $300 per child. Workers who earned at least $3,000 last year — but not enough to pay income taxes — would be eligible for $300.

Rebates would be limited, however, to single taxpayers who earned up to $75,000 or couples with incomes of as much as $150,000.

I guess it could have been worse. Virtually everyone who paid payroll taxes in 2007 will receive $300, and the $150K household cutoff will prevent at least some of the wastage we'd get from giving money to people who are likely to just save it instead of spending it.

(And what's wrong with saving money, you ask? Nothing. That's what we'll do with our rebate, and national savings will thereby increase by $1,200. Hooray! Unfortunately, this is all funded by deficit spending from the feds, and increasing the deficit reduces national savings — in this case by $1,200. Net effect to the economy: pretty close to zero.)

Needless to say, the plan could have been better. The LA Times' summary of the negotiations between Nancy Pelosi (for the Democrats) and John Boehner (for the Republicans) explains why it wasn't:

In the talks, Pelosi pressed to make sure tax relief would find its way into the hands of lower-income earners while Boehner pushed to include upper middle-class couples, according to congressional aides.

....Democrats had pressed to extend unemployment benefits for people whose 26 weeks of benefits have run out, but Republicans resisted.

Etc. Basically, Republicans insisted that all aspects of the plan had to take the form of "income tax rebates," which automatically excludes the poor and favors the well off. It also does a lousy job of stimulating the economy, but who cares about that? Pelosi managed to improve things a bit, but as long as George Bush is in office we still have to make our ritual obeisances to voodoo economics.

Bottom line: I doubt that this plan is going to provide an awful lot of stimulus. But it might do a bit of good, and certainly won't do any harm. In today's world, that counts as a win.

Kevin Drum 12:45 PM Permalink | Trackbacks | Comments (73)

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Comments

Dems complain that they don't have power to do the right thing when they are a minority.

But even when they are a majority, they are played like fools by the Repubs.

No way these clowns can negotiate with the our allies or enemies abroad, much less fight the terrorists.


I am voting 'present' in the 2008 election.

Posted by: gregor on January 24, 2008 at 12:51 PM | PERMALINK

I'll use mine to buy a hammer

Posted by: tom veil on January 24, 2008 at 12:55 PM | PERMALINK

It's too little, too late, and won't do anything other than serve as a one-time injection of a small amount of cash into an economy which is too large and unstable right now to notice.

Every dollar they will spend on this "package" should instead be spent ensuring that working Americans can avoid foreclosure on their homes. Any package that doesn't stem the tide of rampant foreclosure in this country is a band-aid on a shotgun wound to the belly.

Posted by: Pale Rider on January 24, 2008 at 12:56 PM | PERMALINK

The plan will not provide any meaningful 'stimulus' to the economy, yet Democratic leaders will still support it. The Democratic leadership is a useless proponent of good economic policy, yet progressives, liberals and most leftists continue to think it is the only alternative to the neoconservative Republcans.

Posted by: Brojo on January 24, 2008 at 1:04 PM | PERMALINK

Doesn't do any harm? Borrowing from the future. Isn't that what created this mess in the first place?

Posted by: bigTom on January 24, 2008 at 1:05 PM | PERMALINK

I just don't get the theory behind this. At every level, the U.S. is already engaged in deficit spending: people carry thousands in credit card balances, home owners have purchased more house than they can afford, foreign governments are bailing out American banks, and the Federal government has set record annual deficits. How could everyone spending an extra $300 to $600 each possibley make a difference?

Posted by: Amitava Mazumdar on January 24, 2008 at 1:08 PM | PERMALINK

But even when they are a majority, they are played like fools by the Repubs.

On this, they're not in a majority -- given that there are twenty-thirty Democrats whose only party-line vote they cast in any given Congress is for speaker. Calling Dan Boren or Marion Berry or John "Nighthorse" Salazar a Democrat is like calling Velveeta™ cheese.

They'll make Pelosi speaker on 4 January, and then they consider their job done for another two years.

Posted by: Davis X. Machina on January 24, 2008 at 1:09 PM | PERMALINK

The great thing about the next Democractic President is that Pelosi and Reid will have someone to hide behind. Lousy cowards.

Posted by: jimmy on January 24, 2008 at 1:11 PM | PERMALINK

Kevin, if it isn't going to actually stimulate anything (for reasons you actually outlined in your own plans for the rebate), then why do you still think it is better than nothing?

Posted by: Yancey Ward on January 24, 2008 at 1:12 PM | PERMALINK

Dumb Questions:

Is this tied to 2007 or 2008 income taxes. And is it an ADVANCE on an expected refund? Or is it just FREE MONEY?

If people keep their deductions pretty close to their actual tax-owed, will they have to cough-up the supposed REBATE in April 2009?

Posted by: katiebird on January 24, 2008 at 1:13 PM | PERMALINK

If you believe in fairies, clap your hands and Tinkerbell will live! I'll give you six hundred bucks to clap your hands!

Only a nation of fucking dimwits would fall for this crap. Oh, wait...

Posted by: thersites on January 24, 2008 at 1:14 PM | PERMALINK

Kevin, cutting taxes on the rich won't do any harm? How about the fact that it reduces government income, leaving less money to pay for programs we all (all but the Al-bots, anyway) want? Giving money to people who already spend all they want to spend is useless in stimulating the economy. They'll just invest it, which may be good for the nation in the long run (though the added income the investment generates for the already rich people does exacerbate the rich-poor gap), but it don't do dink for today. You want to stimulate the economy, give wads of money to poor people. They'll go out and spend it that very day, and it percolates up through the whole economy.

Giving it to rich people doesn't even help businesses, unless they buy newly issued stock. They'll usually buy something from some other speculator, who will use the proceeds to buy something from some other investor. It floats through the financial ether generating profits (or maybe sometimes losses) for rich person after rich person, but it doesn't stimulate the real economy.

So there.

Posted by: anandine on January 24, 2008 at 1:18 PM | PERMALINK

Looks like once again I don't qualify for another tax rebate/deduction. Missed out on Bush tax cuts 1 and now Bush tax give away 2.

Guess I won't be stimulating the economy, nope, nope. Once again, I just get to pay for the mess that the upper upper and middle and lower classes have brought asunder.

Posted by: optical weenie on January 24, 2008 at 1:24 PM | PERMALINK

Don't worry, anandine. At the end of the day, the poolboys and groundskeepers will get a 10-cent raise. Don't you know that a rising tide lifts all yachts?

Posted by: thersites on January 24, 2008 at 1:25 PM | PERMALINK

I really wish these plans took into account regional variations in cost of living.

I've lived in eastern Oregon and New York City, among other places. I can tell you someone making $70,000 in New York is absolutely not in the same place economically as someone making $70,000 in Bend or Prineville.

Posted by: matthewcc on January 24, 2008 at 1:30 PM | PERMALINK

Strikes me that most of the money will go to pay down credit card or other debt. This bill is not much more than a three-month float for banks.

Posted by: Will Divide on January 24, 2008 at 1:30 PM | PERMALINK

The plan is a complete joke.

Its nothing more than a bit of feel-good public policy. Its pretty silly fiscal policy.

Borrowing money from China and the Saudis to pay for more cheap crap and fuel? Brilliant!

I'm all for tossing money to those who could and will use it, say put the cap at around $50k/$75k (ind/household) and give it to everyone that pays FICA (not based on income payments).

Hell, call me a class warrior.. pay for it by raising the rate on the wealthy by a tidge. They've stolen from the middle and poor for long enough.

Posted by: Simp on January 24, 2008 at 1:31 PM | PERMALINK

we are ruled by the retarded.

Posted by: cleek on January 24, 2008 at 1:33 PM | PERMALINK

"But it might do a bit of good, and certainly won't do any harm."

Isn't this how all this mess got started? The country being awash in cheap money - speculative financing.

Why stop at $1200? Why not $12000 or $120,000 or better yet make everyone in instant miliionaire... $1,200,000 !!!

What complete and utter irresponsibilty. No tangible investment of any kind, no work programs, no funding for alternative energy or transportation. DISGUSTING.

Those who don't believe in taxes are proven correct. Why pay taxes when the government boys (and girls) will pay your way.
--


My parents lied to me. Money doesn't grow on trees... it comes from the black (RED!!!) hole of the US treasury.

PS: I'm using my $ to purchase a wheelbarrow. I figure I'll need it to haul the cash to the store to buy milk and bread.

Posted by: Jay in Oregon on January 24, 2008 at 1:34 PM | PERMALINK

One question for you financial people:

Is the 150,000 cap for adjusted gross income or just gross income?

Posted by: Margaret on January 24, 2008 at 1:35 PM | PERMALINK

I can tell you someone making $70,000 in New York is absolutely not in the same place economically as someone making $70,000 in Bend or Prineville.

Exactly. Spending $600 in Oregon is radically different than spending that same amount in New York as well. It's exactly the wrong thing to do when it would be of greater benefit to the economy to go into economically depressed and declining areas and try to help people keep their homes.

A home foreclosure throws a greater range of economic ripples out there--and no amount of one-time spending is going to balance that out.

Could it be that the reason why there is no serious or comprehensive effort to help people with foreclosures is that this was all planned? If you think about it, why else would they have started with reforming bankruptcy laws? Why would they have made it easier to separate people from their assets? And then allow the sub-prime industry to advertise day and fucking night on TV every single day, non-stop, for the last few years?

Someone's making money on this economy, and I suspect every single one of them has a preferred parking spot on Capitol Hill.

Posted by: Pale Rider on January 24, 2008 at 1:37 PM | PERMALINK

I'm single, make more than $75K, have substantial savings and no debt. I was actually going to get an iPhone with my tax rebate, assuming (naively) I got the check, because I didn't need to use it on debt or for more savings.

If these checks go out in early June and get spent that month, then the 2nd qtr of the year will show an uptick in GDP, and push the official recession back two more quarters.... til after the election.

How terribly foolish we are.

Posted by: Mike P on January 24, 2008 at 1:46 PM | PERMALINK

The last time we got a free check from the government, I used it to buy a TV; that TV is still in-service. Maybe this time I'll get a chance to upgrade to HDTV. At this rate, it looks like I'll be able to depend on a government-supplied TV every seven years or so...

Posted by: rusrus on January 24, 2008 at 1:49 PM | PERMALINK

Oh, POOP...I'm with the guy who asks..."Where is that money coming from?"....China, maybe...so we can run down to the local Wal-Mart and buy more crap made in China? Or, wow, get that BIG SCREEN TV...then pay taxes on it next year and STILL owe for the bill for it...but my area of agreement is that there are folks who truly need some assistance and WOULD spend this to "stimulate" the economy if only to feed their families, keep them dressed, keep them warm...whatever...but not the folks our government REALLY cares about!!!

Posted by: Dancer on January 24, 2008 at 1:49 PM | PERMALINK

katiebird, To answer your questions, the amount is based on 2007 taxes, it *isn't* an advance (so it's "free" in that sense), but I don't think you would receive it until June or July of this year. Also, you would not be reckoning it against any money you owe or refund you receive on the 2007 *return* you file by April 15th.

Here's the summary from the WaPo:
Under the deal, nearly everyone earning a paycheck would receive at least $300 from the Internal Revenue Service. Most workers would receive rebates of $600 each, or $1,200 per couple. Families with children would receive an additional payment of $300 per child. Workers who earned at least $3,000 last year -- but not enough to pay income taxes -- would be eligible for $300."

Posted by: Doc at the Radar Station on January 24, 2008 at 1:57 PM | PERMALINK

Nothing for the unemployed, and nothing for the people buying their food with food stamps. Nothing for the people who are actually most hurt by George Bush's disastrous economic policies.

On a very slightly positive note, I just spoke to Kennedy's office, and they said the non-extension of unemployment and the non-expansion of food stamps should not be taken as a done deal, yet.

Posted by: Lis on January 24, 2008 at 2:00 PM | PERMALINK

All good liberals who make a decent salary and don't really need the money (including myself) should give their $1,200 to a good charity... It will get spent then.

Posted by: Jim G on January 24, 2008 at 2:02 PM | PERMALINK

>"Borrowing money from China and the Saudis to pay for more cheap crap and fuel? Brilliant!"

What else is left for the USA?

Our current economic 'base' is selling imported goods to each another. Like the old parable of the two drunks passing a bottle back and forth and charging each other a penny a swig (note: the same penny goes back and forth)it can't end well.

A real fix will take a generation or more.

Posted by: Buford on January 24, 2008 at 2:02 PM | PERMALINK

"One question for you financial people:

Is the 150,000 cap for adjusted gross income or just gross income?"

This is a good question. Because our combined income is $153k in the former instance, and about $110k in the latter.

Posted by: Joe on January 24, 2008 at 2:05 PM | PERMALINK

Oops, meant the reverse.

Posted by: Joe on January 24, 2008 at 2:07 PM | PERMALINK

Thanks Doc at the Radar Station.

Now that I get it, I like it even less. If we've got this sort of money to throw around, why not do something BIG. Like pay for health care for everyone for a year. Or something?

Posted by: katiebird on January 24, 2008 at 2:14 PM | PERMALINK

katiebird, my guess is they would prefer to just rebate it instead as a lump sum because it is simple to administer, calculate, and disburse. If they did something BIG there would forms involved that you would have to fill out, help hotlines to call, etc. :(

Joe, I'm not sure whether it would be AGI or gross income. I suspect plain old gross income.

Posted by: Doc at the Radar Station on January 24, 2008 at 2:20 PM | PERMALINK

"national savings will thereby increase by $1,200."

Well, that brings the USofA up to...$1,200.

You damn traitor, Kevin, you're supposed to SPEND it. Every dollar you spend makes a terrorist cry, or something like that.

Posted by: Speed on January 24, 2008 at 2:24 PM | PERMALINK

God, this is dumb. The checks won't even begin going out until nearly the end of the second quarter. Bad timing and more national debt. Hooray.

Posted by: Brian on January 24, 2008 at 2:26 PM | PERMALINK

Best thing you could do would be to go-out and spend it all on whores. As long as we're getting fucked, we might as well get fucked...

Who knows, you could wake-up dead tomorrow!

Posted by: rusrus on January 24, 2008 at 2:29 PM | PERMALINK

Ahem rusrus. Remember which blog you are on. All spending should be on cats.

You can contribute a share of your rebate for Inkblot's pedicure.

Posted by: optical weenie on January 24, 2008 at 2:33 PM | PERMALINK

$600-$1200 is about the GDP/capita for many sub-saharan countries, some Pacific Islander countries, and a few Asian countries.

A year's income for the people of these counties. The marginal benefit of giving our dollars to them far outweighs whatever we'd buy over here.

Posted by: luci on January 24, 2008 at 2:35 PM | PERMALINK

I've lived in eastern Oregon and New York City, among other places. I can tell you someone making $70,000 in New York is absolutely not in the same place economically as someone making $70,000 in Bend or Prineville.

Amen!

Posted by: Tang on January 24, 2008 at 2:40 PM | PERMALINK

rusrus: spend it all on whores
optical weenie: All spending should be on cats.

I'm going to compromise, and spend the money in a cathouse.

Posted by: thersites on January 24, 2008 at 2:44 PM | PERMALINK

Thersites,
You gonna get a cat-o-nine-tails too!
Mmmeeeeeeeeeeeoooooooooooooowwwwwwwwwwwww!

Posted by: Optical Weenie on January 24, 2008 at 2:53 PM | PERMALINK

Is this going to be like the stimulus that was approved after 9/11, where the "rebate" was actually an advance on this year's tax refund, and if you owed taxes when you filed your taxes, you had to pay the "rebate" back? That's what happened to me last time. Luckily I had the foresight not to go out and blow my so-called "rebate" the last time.

Posted by: Pocket Rocket on January 24, 2008 at 2:53 PM | PERMALINK

At least, with the Drum rebate in the bank, there is no danger of the cats starving this year.

Posted by: Yancey Ward on January 24, 2008 at 2:56 PM | PERMALINK

CIA factbook:

Tajikistan------1,300
Cen.Afr.Rep.----1,200
Kenya-----------1,200
Sao.Tome.Princ.-1,200
Benin-----------1,100
Djibouti--------1,000
Ethiopia--------1,000
Zambia----------1,000
Yemen-----------1,000
Tokelau---------1,000
Niger-----------1,000
Eritrea---------1,000
Liberia-----------900
Madagascar--------900
Guinea-Bissau-----900
Sierra Leone------900
Afghanistan-------800
Tanzania----------800
East Timor--------800
Burundi-----------700
Dem.Rep.Congo-----700
Solomon Islands---600
Comoros-----------600
Somalia-----------600
Malawi----------600

Posted by: luci on January 24, 2008 at 2:57 PM | PERMALINK

It is wrong to limit the rebates to people who earn leass than $75,000 or couples at $150,000.

First of all, it doesn't really make any difference to these people and it won't really cost much to give those few rich people a couple of hundred dollars.

But the main point is COMPLEXITY

Why do we make the tax code so stupidly complex?

I have no idea if the rebates are a real tax cut or a prepayment on a refund and I really don't care.

What are the phase out rules going to be?

Are you seriously saying that I earn $74,995 and get a rebate but you earn $75,005 and don't get the $150 check? Does that mean that I will end up keeping more after-tax than you will?

Does anyone really care? Why make things complex just because it is good politics? How much will it cost to figure out who gets a check and who doesn't? I suppose those people who earn a living deciding who gets a check will contribute to the economy.

But why make things complex?

Wouldn't we be better off if these people actually worked at a job that produced something?

Phaseouts are stupid, counterproductive and a sham.

Oooppppps!!!!!

I forgot. I make my living working on tax returns and these complexities give people like me a job.

Keep making the tax code more complex. My Honda is getting old and I need to get a few more clients so I can feel comfortable enough to buy a new car.

Posted by: neil wilson on January 24, 2008 at 3:00 PM | PERMALINK

Pocket Rocket, I'd have to go dig up my 2001 taxes, but I don't think that $300 had to "paid back". I think however, that it counted as taxable income at least on the State taxes I paid.

Posted by: Doc at the Radar Station on January 24, 2008 at 3:03 PM | PERMALINK

Here's the real deal with this money: when people get a one-time windfall, they use it to pay down debt. That's what the recent research shows.

So the game here is to have people make payments on their debts, which will infuse cash into all those multiplied levels of shaky securities that the banks and bond insurers can't value, and make them look better.

So this is all about saving the securities and with them the banks, traders, and insurers. It's not about jump-starting the economy. That would be more likely to happen with sustained small payments over time.

Debt? Ronald Reagan showed deficits don't matter, right? Seriously, we're so far up the spout now that it can't hardly matter, and whatever we can do to bring in the creditors quicker can only help.

Posted by: Altoid on January 24, 2008 at 3:17 PM | PERMALINK

This is an idiotic plan that will do NOTHING but provide a temporary blip in spending.

The only thing I'll be using it for is updating my XBox Live subscription. The rest is going into savings.

I get the feeling most other folks will approach it the same way, if what I've been reading and hearing is any indication -- most people will maybe pay off a bill or two, buy something smallish, and save the rest. Not exactly what Bush and Bernake want, but it's the fiscally smart thing to do (which is probably why they don't want people to do it).

Of course, just think of what we could do if we had an extra $11 billion a month here at home instead of in Iraq-- maybe some work programs, extended unemployments benefits, training programs ...

You know, stuff that would actually have positive long-term effects. Guess the GOP is too short-sighted, and the Dems too cowardly.

**sigh**

Posted by: Mark D on January 24, 2008 at 3:27 PM | PERMALINK

My wife and I live on my pension and Social Security; we do not "earn a paycheck". Does that mean we will get nothing?

Posted by: bob h on January 24, 2008 at 3:30 PM | PERMALINK

If it's an advance against my refund, the $1200's actually $700 more than my probable 2007 Federal refund. My daughter will un-qualify for the $1000 per kid credit in the course of next year, and on top of that I have always had a Federal refund of less than $1000 -- I calculate witholding pretty accurately.

The stimulus to be gained by taking another $500 of my money escapes me.

Posted by: Davis X. Machina on January 24, 2008 at 3:39 PM | PERMALINK

Shrub on ropes seeking to extend legacy.

Rust Belt House Minority Leader in a battered economic area.

Congressional Democrats still surrender.

Film at 10.

Posted by: SocraticGadfly on January 24, 2008 at 4:12 PM | PERMALINK

Doc,

Pocket Rocket is correct. The last "rebate" was really a "prebate." The amount we got in the summer was either deducted from our refund or added to our taxes for the year.

Details are coming in, but it sounds like it actually is an untaxable rebate, at least at the federal level.

People earning taxable wages of more than $3,000 last year will get at least something.

SS benefits are taxable, right? So are pension benefits? The case could be made that those recipients also qualify, but I have not seen clarification on that point just yet.

The devil is in the details.

Posted by: Tripp on January 24, 2008 at 4:14 PM | PERMALINK

Read the last Q on this blog post


Will the rebate check be deducted from the filer's next year's refund?

This is the most interesting one that have come to my mind and I am not sure what the answer is. What if some one who gets a rebate check this year has to pay back in taxes next year? Will he have to pay the taxes he owe plus the rebate check he received? If either of them is true, you better be not in a hurry to spend that tax rebate check, if you get one. No doubt some one will name it Rebate and Bait Switch.

Posted by: Devil's advocate on January 24, 2008 at 4:30 PM | PERMALINK

One clarification I have seen is that the rebates are gradually phased out above $75K and $150K, and gone at $87K and $174K, although those caps are higher if you have kids.

Posted by: Tripp on January 24, 2008 at 4:41 PM | PERMALINK

pathetic. simply pathetic.

no one is going out shopping with these meager rebates (a pittance compared to what has been stolen from all of us by these treasonous criminals). People will use this money to help pay some bill they have.

Gawd, I hoped I would never have to live through what my grandparents lived through and here it bloody well is, happening all over again.

Recession= euphamism for Depression
Depression= euphamism for panic
Panic= euphamism for economic collapse

and that, ladies and germs, is prcisely what we are facing.

Posted by: getaclue on January 24, 2008 at 4:51 PM | PERMALINK

Won't help me, since I don't get a paycheck. Self-employed, but just as desperately poor as any WalMart part-timer.

And I'm not planning on building a new plant, or whatever else small businesses have to do to get a rebate.

Our country tells us we have to be entrepreneurs, then pulls the rug out from under us.

Posted by: Bonnie on January 24, 2008 at 5:06 PM | PERMALINK

"And what's wrong with saving money, you ask? Nothing. That's what we'll do with our rebate, and national savings will thereby increase by $1,200. Hooray!"

Kevin, have you looked at the interest rate your savings account is earning? That's got to be one of the reasons our national savings rate is so low. And with the stock market tanking, that option isn't very attractive either. Our rebate will be used to pay bills, most of which (ie real estate taxes, cable, natural gas and electric, gasoline) are rising. And to top that off, the governor of New Jersey is proposing to immediately double and eventually quadruple the tolls on the state toll roads; his plan is that eventually it will cost $47 to drive the length of the NJ Turnpike. How about that!

Posted by: myrna on January 24, 2008 at 5:08 PM | PERMALINK

I think most people are going to use this money to pay off bills, and $600 doesn't put a dent in most people's bills. If it is being spent to pay last year's credit card bills or last decade's student loans, it's not being spent on stuff, so it's not really stimulating anything. It's just kabuki, but that is all this administration, and, hence, Washington, is good at.

I am still amazed such an incompetent, crooked, loathed President still wields such power, though. I really am.

Posted by: Joshua on January 24, 2008 at 5:08 PM | PERMALINK

getaclue, I've no idea who to attribute this to, but I ran across it earlier this week:
"Recession is when your neighbor loses his job. Depression is when you lose yours."

Dunno, I may actually use some of that meager rebate to exercise my Amendment 2 rights. Might be more useful in the long run than most consumer goods.

Am I foolish for wondering why there seems to have been zero discussion or other mention, in Congress or the media, of putting this money towards something useful, say, employing people in public infrastructure projects?

Anyone?

Posted by: kenga on January 24, 2008 at 5:08 PM | PERMALINK

By gold or platinum with it.

Or if you live in Texas, and start your car and its really loud, you may have to use it to buy a catalytic convertor that someone stole from under your vehicle.

Posted by: Ya Know.... on January 24, 2008 at 5:18 PM | PERMALINK

The wealthy will buy gold, Euros or invest this money in China. They already have all of the bananas they can eat. The poor will buy bananas with the money, helping the economies of some Central American nations. The 'package' will not stimulate the US economy, but it will contribute to our national debt.

This bipartisan plan should be a warning to us all that the Democrats have every intention of scheming with Republicans to increase our economic ills. That is the definition of bipartisan.

kenga, good point. This money should be spent on tangible public goods, which would create jobs and enrich us all. Instead a bit of it goes to Wal Mart and the rest to China.

Posted by: Brojo on January 24, 2008 at 5:28 PM | PERMALINK

Holy Cow, what a bunch of whiners, LOL!!

I'm using my $1800 (two kids) to further our escape from this country. It will come in handy paying the residency lawyer at just about the right time.

- C

Posted by: CB on January 24, 2008 at 5:46 PM | PERMALINK

My rebate is up for grabs. I'll either send it to Obama or Clinton. But I'm one of the lucky ones. I have neither a mortgage I've defaulted on (in which case, what good would $300 do?) nor a job I've recently lost due to downsizing (ditto) nor an uninsured medical condition that's eating up all of my discretionary income (ditto, and knock on wood).

Here in Minnesota, Jesse Ventura did the same thing a few years ago, and it did the same thing: Squat. It's pretty sad that our political establishment can't come up with any better ideas than "Jesse checks" (not that anyone but Jesse ever called them that).

Posted by: wally on January 24, 2008 at 7:17 PM | PERMALINK

Yeah, I heard that Drum shrugged and said, "Well, if that's the best they can do, well, OK...."

So I thought I'd nip by for the first time in many months and say that it reminded me of why I stopped bothering with Drum's site. Here's the deal: The Dems have betrayed their liberal and left allies AGAIN. And they're gonna keep doing it, up to and after their (virtually assured) '08 sweep. And they're gonna rely on idiotic pablum from drones like Drum to justify every sleazy step.

Christ, Drum, you give Davey Broder a hard-on. Or as close to one as he can manage.

Posted by: sglover on January 24, 2008 at 10:14 PM | PERMALINK

Think of the economic stimulus plan as a Surge. Like the Surge in Iraq it's there to try and quell the violence a bit, so other longer-term solutions can be put in place.

The problem with our economic woes is the biggest part of it is the Iraq war and Bush isn't going to stop that any time soon. But, the Dems are at least doing their job to try and give him time. Aside from impeachment and conviction this is the best that can be done just now.

Posted by: MarkH on January 24, 2008 at 10:22 PM | PERMALINK

Crap. Self-employed don't get any cash?

Posted by: Tilli (Mojave Desert) on January 25, 2008 at 4:51 AM | PERMALINK

The best thing would be if they could give us each a $5,000 loan that started out at 1% API and then reverted to 20% after a year.

I've lived in eastern Oregon and New York City, among other places. I can tell you someone making $70,000 in New York is absolutely not in the same place economically as someone making $70,000 in Bend or Prineville.

This is why the republicans are cool with it. It encompasses the great majority of their upper middle class rural base and excludes union workers in NYC.

Where is AARP on this?

Posted by: B on January 25, 2008 at 7:54 AM | PERMALINK

Since I make massive amounts of money, this rebate means nothing to me - as a matter of fact, I make so much that I won't even get a rebate. My last rebate, I sent directly to John Edwards, who wants to ruin my life as the rich important guy that I am. I just wanted to encourage him and then stomp on him.
Well, I'm off to play Polo and dine at " the club".
I hope my friends Winthrop and Percy are there to share a martini with and complain about the market - Ta-Ta

Posted by: rik @ work on January 25, 2008 at 9:56 AM | PERMALINK

The last stimulus Bill i was in favor of involved the oval office and a stained dress.

Posted by: absent observer on January 25, 2008 at 10:10 AM | PERMALINK

kenga,

Am I foolish for wondering why there seems to have been zero discussion or other mention, in Congress or the media, of putting this money towards something useful, say, employing people in public infrastructure projects?

Since you asked - I have heard that point brought up repeatedly, and the answer always is "To work the stimulus needs to happen NOW. Any infrastructure projects will take years to get out of the planning/certification stages."

You can believe that rationale or not, I'm just reporting what I hear.

I've been thinking a lot about the 'best for the economy' way to use the stimulus and the best I can think of is to buy locally grown food or hire a plumber or electrician. I don't need a plumber or electrician though. I will say one thing - WalMart gets NONE of it from me.

Posted by: Tripp on January 25, 2008 at 10:44 AM | PERMALINK

wally,

Here in Minnesota, Jesse Ventura did the same thing a few years ago, and it did the same thing: Squat.

In fairness the Jesse checks were not the same thing at all. They were a rebate of the tax SURPLUS that the state had collected. The point was to give the money back instead of putting it towards new budget items that the voters had not authorized. As you point out - rebates when the economy is good do squat. At that time economic growth comes from real growth in our productive output.

Right now we totally do NOT have a tax surplus. Quite the opposite. The economy is sliding because the American consumers are tapped out. Because of stagnant wages since the 70's we've sent our wives to work, we borrowed against our homes, and we borrowed against credit cards.

We've got nowhere left to go.

IMHO the real point of this 'stimulus' is to delay the recession until after the fall elections, but I will concede that a stimulus, if done right and at the right time, can help avoid a recession. I just think this recession is inevitable and this 'stimulus' is a little bandaid on a gaping wound.

Posted by: Tripp on January 25, 2008 at 10:53 AM | PERMALINK

When other nations have the problems the US has now, they are expected to raise interest rates, reduce consumption and increase their savings. This policy asks other nations to make the majority of their citizens' quality of life diminish so that their economies can recover from the terrible fiscal and monetary policies of their leadership. The IMF is happy to tell Thailand or Argentina or some third world nation to reduce the living standards of their populations in order to revive their economies. That is also what the US should be doing. Instead, through bipartisanship, the US is not raising interest rates or forcing a reduction in consumption, but encouraging a continuation of the same ruinous economic policies that created this economic mess we are presently in.

Posted by: Brojo on January 25, 2008 at 11:51 AM | PERMALINK

Brojo,

Good observation. Why do you think that is? Could it be an intentional, long-term campaign by some of the ultra-rich to turn the clock back to the days of the Robber Barons?

Nah that is just crazy talk.

Posted by: Tripp on January 25, 2008 at 12:50 PM | PERMALINK

IMHO the real point of this 'stimulus' is to delay the recession until after the fall elections, but I will concede that a stimulus, if done right and at the right time, can help avoid a recession. I just think this recession is inevitable and this 'stimulus' is a little bandaid on a gaping wound.-Tripp

Here's another scenario that would also prove your point: Let's say that the real contraction began in December (which is commonly thought), that will get averaged out for 4Q2007 and it will still be positive. 1Q2008 will likely be negative, BUT if 2Q2008 and 3Q2008 have positive growth of just 0.01% each then technically there has been no recession by election time. The aggressive up front rate cuts were done primarily for *psychological* reasons. Also, it is just enough piss on the towel to keep it from being wrung totally dry before the election.

Posted by: Doc at the Radar Station on January 25, 2008 at 4:12 PM | PERMALINK




 

 

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