Obama's plan for a government circle-stimulation

[JermCool]

In defense of CS22 (God help me), while things aren't going well right now, they have been much, much worse. 1934 and we're at the height of the Great Depression. Nearly 1/4 of our workforce is unemployed. We're not even at 8% yet. Bill Clinton had us here as well back in 1992. In 1982, it was above 10%. This isn't Great Depression: The Revenge yet.

Source for my numbers.

[StruckingFuggle]

By 1934, hadn't FDR's work programs really come into swing, or was that later? I remember reading just recently that unemployment numbers from back then count people who were working regularly for competitive wages as "unemployed" if they were employed through such means, skewing the numbers.

[adciv]

working regularly for competitive wages

Translation?

[collegestudent22]

At least Obama hasn't followed FDR's example on gold.

By 1934, hadn't FDR's work programs really come into swing, or was that later?

That was later, as the New Deal didn't really get going until after the 1934 Congressional elections, which gave Roosevelt an even larger majority in the House and Senate.

However, even at the height of WPA employment in 1938, unemployment was still 12.5% according to figures from Michael Darby.

Michael Darby, a distinguished economist who served in the Reagan and first Bush administrations, published an article in 1976 recalculating the unemployment rate excluding work relief. In 1939, he calculated, it was not 17 percent but 11.3 percent -- not wonderful by today's standards but half what it had been in 1932.

- Source

[JermCool]

Here's one for the history books:

We are spending more money than we have ever spent before and it does not work. I want to see this country prosperous. I want to see people get a job. We have never made good on our promises. I say after eight years of this administration we have just as much unemployment as when we started and an enormous debt to boot.

-Henry Morgenthau, Jr., Secretary of the Treasury, 1939 (Testimony to the House Ways and Means Committee)

[collegestudent22]

Where the money is going. Basically, $288B in tax relief (oddly enough, none of it will ACTUALLY go to people who need it....) and for EVERY other category, the category itself is MUCH too generalized or the category is unnecessary....

Biggest government interference in the market. There's a reason no one tried it before......

Also, the bill is here. Apparently, it is so big that to upload it they had to break it up into 5 (!) PDFs.

[ampersand]

Two things I find very interesting about the graphs: 1) that the five, ten, and twenty running averages seem to be running very close to each other at the most current end as well as with the current unemployment rate. That does not bold well, methinks. 2) Really, it took wholesale manufacturing of military weapons for a World War for the United States to eventually get out of the Great Depression. And that was after what, twelves years of FDR's attempts to stimulate the economy?

Many conservatives (the Glenn Becks, et. al.) point to 1920 for a more accurate depiction of where we are, where we were heading into recession, but because Wilson didn't decide to attempt to do something until it had already worked itself out on its about six months later, it proved that government intervention was not needed. Although I suspect liberals would argue that it just merely delayed the inevitable 1929 Great Depression where little was tried and more should have been done in hindsight.

Or, maybe it just shows that no matter how we try to regulate, prevent or stimulate an economy so that the recessions and/or depressions are few and far between, it will happen anyway, just with more force and weight than people will think. I'm not one to believe that either this could or could not be avoided, just that the ways the government has responded in this crisis, both during Bush's and now Obama's tenure is very, very, poor at this point. There will be another stimulus package, probably of the $600 billion variety so that it won't look as ginormous as the first version. And it'll probably be like the first one, so micromanaged to help individual congressional districts and states that it won't have much, if any impact at all, to help the economy on a macroscale. It's like putting bandages on a person suffering from an internal illness.

[collegestudent22]

Really, it took wholesale manufacturing of military weapons for a World War for the United States to eventually get out of the Great Depression. And that was after what, twelves years of FDR's attempts to stimulate the economy?

So we just need to ramp up military weapon production to preparation for total war levels? Awesome! [/sarcasm]

You know, the worst part is there already is a "government program" for those that lose their jobs. THE US MILITARY! Increase military funding with the caveat that it must go to personnel, and *bam* hundreds of thousands of jobs (or more) will be opened up. Seriously, $787 billion would account for THOUSANDS of high-level officers making $100,000 or so a year. How many more $30,000/year enlisted positions would it open? Perhaps all those positions could be in the Army Corp of Engineers and we could actually get working on rebuilding New Orleans THIS century.

[JermCool]

WTF?

* Tax Relief - includes $15 B for Infrastructure and Science, $61 B for Protecting the Vulnerable, $25 B for Education and Training and $22 B for Energy, so total funds are $126 B for Infrastructure and Science, $142 B for Protecting the Vulnerable, $78 B for Education and Training, and $65 B for Energy.

OK - so I'm looking at these bubbles. Why not just label them as they should be and say the tax cuts will be $165B? And seriously...$8B for other?! What the hell is other and why does it deserve $8,000,000,000?

BRB - off to change my name to "Other".

[Mae Dean]

I was a little irked by that, too - but it does say that more detail on where the money will be going is supposed to be coming, pending the various governmental districts allocating it. I too would like to know where "other" falls.

[JermCool]

We've got more information coming, but this government that promised a new level of transparency couldn't give us the details before signing this into law? Bit like closing the barn door after the horse has bolted.

I'm actually laughing. It's one of those pained laughs like when you twist your ankle doing what was supposed to be a totally epic stage-dive.

Not that I've ever done that.

[Martin Blank]

The more I learn about this plan, the less happy I am, except that the spending takes place over the next several years, going out towards ten years in some cases. Even in that case, I'm not happy, just less annoyed, because the debt isn't all going to smack down this year.

Some of the points that annoy me most:

• A tax credit of $8,000 for purchase of a new home -- for those making under $75,000 per year. I don't get to qualify for this because I make too much, which sucks because I'm probably going to be in the market for a new home in the next year or so. A significant portion of the people in the market for a new home in the near future, perhaps even a majority, will be making more than $75K per year.
• The most widely-applied tax cut is $400 per person or $800 per couple. This means an extra $13 per week on average. Now, I understand that for some people, that means paying the electric bill on time. But that's not stimulus. Most of that isn't going to go into buying a new car or doing home improvements. If you make more than $75K, you get less back.
• California may be in line to get billions to help close its financial gap. I really don't want this. I don't think that the spending spree the Legislature has gone on should be rewarded. The state should go bankrupt first.

There was an opportunity to turn this into a real stimulus bill. Open up the tax credits for purchases no matter how much the person made, or at least open it up to the bottom 90% of the population. Give banks a tax credit on principle write-downs for loan renegotiation. Provide more than a few billion for highway construction, especially since in California, highway construction costs about $100 million per mile per lane. Even providing preference for certain jobs to people who are on unemployment or taking other government assistance would be better than the expansion of welfare that's being offered.

I really don't know that this is going to do much. I suspect that most of the recovery will be from a couple of industries that manage to find some new niches and provide fragile-at-first but lasting foundations from which the rest of the economy will recover. That's how things have recovered in the last few decades, and it's likely how they'll recover this time if this is the best that politicians can come up with.

[Mae Dean]

Jarrod, why do I get the sneaking suspicion you read the bill in its entirety?

[Deacon]

Hehehe...I wouldn't be surprised

And, frustratingly enough, I agree wholeheartedly with Jarrod's take on things and wish I could vote for him. No joke.

It doesn't need to be big, it just needs to be big enough.

OH! OH! THAT'S WHAT SHE SAID! THAT'S WHAT SHE SAID!

I don't get to qualify for this because I make too much, which sucks because I'm probably going to be in the market for a new home in the next year or so. A significant portion of the people in the market for a new home in the near future, perhaps even a majority, will be making more than $75K per year.

Seriously, this is very frustrating, and I'm not even in the market for a home. And $75k buying a house in Santa Monica means something radically different than $75k buying a house in San Antonio. What about a provision that it only applies to homes purchased with standard fixed- or adjustable-rate mortgages, not the kind of crazy interest-only loans and other such things that helped put us here? Also, what about people like me who bought a home and THEN got sat on by the economy? I sure could do a helluvalot with $8 grand, even if it were limited to home and property improvements only and not allowed to be used to pay down the principal on the mortgage (which would mean $8k greater equity and $8k more in the bank's vaults itching to be lent...HELLOOOOO!). Sprinkler system, badass new high-insulation windows and solar screens to go on them and additional insulation in the attic (hey, those are all even "green" things to do!), replace a door or two, put in a new front door, extend the rear patio slab, replace aging fence, put up crown molding, extend the natural gas pipe to down behind the stove and then buy a replacement gas range/oven... All of those things go to reducing energy consumption, buying durable goods, and in all cases employing people. I get a nicer house with my money, the neighborhood overall is improved, and it's actually going toward SOMETHING PRODUCTIVE rather than a dead end freaking money pit. AND the government doesn't have to spend a dime, just refund me some of the massive amount of money I paid in taxes in the last 1.75 years as a homeowner. Though yes they may have to cut back on exorbitant expenditures, Nancy Fucking Pelosi might have to give up her private jet and fly first class like a normal rich person.

California may be in line to get billions to help close its financial gap. I really don't want this. I don't think that the spending spree the Legislature has gone on should be rewarded. The state should go bankrupt first.

I agree with this so much it hurts a little inside. I can't think about it for long because I seriously want to start punching people in the face, namely the legislators who got California so very far in the red and every loudmouth bitch who keeps arguing that they're entitled to the rest of the country's citizens paying their bills for them.

Short term on the left (since 1970), Long term on the right (since 1947)

Up to the end of 2008 we were below the short term average, just above the long term average and well within one standard deviation of the norm on both. January is currently listed as 7.6%. The data for the past few months is still being revised, they will not be 'set' for another month or so. The 5, 10 and 20 year are based on the current year, looking back. I could probably improve this by centering on the year. Will look at doing that later.

Short term numbers:

Code: Select all

Average	+1 STDEV	-1 STDEV
6.11	     7.47	    4.75

Long term numbers:

Code: Select all

Long Term	+1 STDEV	-1 STDEV
5.56	       7.03	    4.08

Bless you, sir, for you are awesome.

In the end, I think we know a number of things from all this:
1) This is not a stimulus package (which is a questionable concept in the first place), but rather a spending spree cut directly out of the DNC wish list and funded by debt and printing paper money and pretty much nothing else.
2) Integrity and campaign promises mean as little or really even less to Obama than to any other run-of-the-mill sleazebag politician. This is certainly not a surprise to me, as I had never drowned in the kool-aid as so many others did in what felt like something out of a Twilight Zone sketch, but it's disappointing nonetheless.
3) The fearmongering on the part of Obama and his accomplices in the media has gone way over the top and seems to be feeding on itself (in what honest to god looks like a very thinly veiled opportunistic power grab).
4) If the economy does eventually recover, it will be in spite of this bill, not because of it.
5) We desperately need a Liberty-minded 3rd party, kind of like Libertarians except without the crazy. Small government, fiscally conservative, socially libertarian: don't tell me I can't marry another dude, don't tell me I can't smoke, don't arrest me for having a joint or two on me, prove that there's a significant problem and that the government's the only (or at least best) way to solve it before you start trying to solve it with government.... Generally just leave me the hell alone unless I'm actively hurting somebody, and we'll all get along.

[Martin Blank]

Jarrod, why do I get the sneaking suspicion you read the bill in its entirety?

Not quite yet. That's this weekend.

I can't think about it for long because I seriously want to start punching people in the face, namely the legislators who got California so very far in the red and every loudmouth bitch who keeps arguing that they're entitled to the rest of the country's citizens paying their bills for them.

Kind of off-topic, but California Senate Republicans last night removed Minority Leader Dave Cogdill over his part in closed-door negotiations for a deal to help close the budget gap in part by adding $14 billion in new taxes to the state that is among the hardest hit by the current economy. The possibility that State Controller John Chiang will have to file bankruptcy in the next couple of months -- maybe sooner -- has gone up dramatically.