[perihelion]

http://www.cnn.com/2008/POLITICS/01/24/economic.stimulus/index.html

U.S. taxpayers would get checks of several hundred dollars from the federal government under a plan to stimulate the economy, congressional and Bush administration officials said Thursday.  House Speaker Nancy Pelosi, Treasury Secretary Henry Paulson, right, and House Minority Leader John Boehner announce the package Thursday.

"Tens of millions Americans will have a check in the mail," House Speaker Nancy Pelosi, D-California, said at a Capitol Hill news conference. "It is there to strengthen the middle class, to create jobs and to turn this economy around."

House Minority Leader John Boehner, R-Ohio, said, "I'm looking for quick action in the House. I hope that the Senate will follow quickly so that we can put this money in the hands of middle-income Americans as soon as possible."

Speaking a few minutes later at the White House, President Bush said the package will "boost our economy and encourage job creation."
Sources on Capitol Hill and at the Treasury Department said the plan would send checks of $600 to individuals and $1,200 to couples who paid income tax and who filed jointly.  People who did not pay federal income taxes but who had earned income of more than $3,000 would get checks of $300 per individual or $600 per couple.  A Democratic aide and Republican aide said there will be an additional amount per child, which could be in the neighborhood of $300.

You've got to be kidding me.  This is their solution?

[Kazan]

most of the time that would work for stimulating the economy

but we're running huge federal budget deficits and in a war.. we're devaluating our currency too fast.. basically we're fscked

bush has trashed the economy and nothing can change that at this point - we just have to ride the downturn

[Shade]

I'm surprised it's even possible for the US economy to get in such trouble with the Dollar as low as it is. It should be export heaven, creating jobs and helping to right that huge trade deficit (Seriously. At this point it is actually cheaper for me to buy books from amazon.com than from amazon.co.uk, because the low dollar makes up for the extra cost of importing them into the EU). But apparently it is not turning out like that.

[Kazan]

all those jobs lost in bush's first term was the US manufacturing industry crashing

[edit]
$600/person or $1200/couple may push a noticable boost in the economy.. but you won't see the effects until the next president is in office

[perihelion]

$600/person or $1200/couple is peanuts.  They need to address problems in the way the economy works on a far more fundamental way than a temporary cash infusion.  The way things work right now gives the filthy-stinking-rich all the power in the world to gather more wealth to themselves and puts all kinds of roadblocks in the way of a poor person trying to pull himself up by his bootstraps.

Where are they planning to get this money from, anyway?  What is getting cut off at the knees to make this useless symbolic gesture?

[Rictor]

Great, $600. Meanwhile, the wars in Iraq and Afghanistan will cost every man, woman and child somewhere in the nieghborhood of $40,000 long term. Of course, the government should not have taxed that money to begin with, instead of the people having to rely on the whims of Congress to generously give back what is not theirs to begin with.

[Kazan]

save the anti-taxation garbage for freerepublic.com - let's stick to the topic at hand

[BrotherBryon]

This is one of the least effective strategies the government can do to try to boost the economy. Lowering the income tax of the lower and middle classes would be far more effective in the long run. Most people receiving this $600 refund tend to either save it or use it to pay bills. Increase the amount of money they take home every paycheck and you will see people spending more. But knowing the government, decreasing the income tax would up in a deadlock in congress as they argue about how to go about it. I guess the mass refund checks can be routed through congress a lot quicker.

[Kazan]

Most people receiving this $600 refund tend to either save it or use it to pay bills.

wrong - the targeted people on average have a marginal propensity to spend of around .95

Increase the amount of money they take home every paycheck and you will see people spending more.

that is also true

But knowing the government, decreasing the income tax would up in a deadlock in congress as they argue about how to go about it. I guess the mass refund checks can be routed through congress a lot quicker.

because it would have to involve a repeal of the cuts for the rich (Who have a high marginal propensity to save) as well as an increase on top of that.

[Kosh]

You've got to be kidding me.  This is their solution?

It isn't much different than the Bush tax cut, only smaller and aimed at middle class, people who could probably use that kind of money.

'm surprised it's even possible for the US economy to get in such trouble with the Dollar as low as it is.

Unfortunately it's more complicated than that. The american economy has several other things seriously wrong with it, in particular stagnant income (except if you are rich) and massive amounts of debt (comsumer and government). I think we've had this one coming for a long while.....

[Flipside]

The UK tried something similar once, when we ran out of money, we simply printed more. It works in the short term, but America is, quite literally, writing checks that it's economic status cannot cash. Much of the state of the UK is because Thatcher used privatisation to create 'fake' wealth nearly 20 years ago.

EDIT: Just wanted to add, I find myself wondering how much this is an attempt at fixing the problem in the long term and how much this is to do with the fact there is an election this year... Maybe I'm just paranoid....

[WMCoolmon]

I was thinking the same thing about election year. I was wondering if the Democrats were using control of the legislature to push through some "problem-solving" laws to subtly push people in the direction of certain candidate(s),

Still, as pointed out, it seems like a rather poor solution. I'd rather see something that fixes the problem in the long term, which appears to be getting worse as the deficit grows. The rich also seem to be getting richer and the poor seem to be getting poorer, and the people this tax cut is aimed at would probably classify as the 'poor' 50% of that statement.

If we really are that important to state welfare, we ought to get more of a $600 check before we get ignored again. This all just seems like wistful thinking by politicians who don't want to do anything serious out of fear.

[Kosh]

Just wanted to add, I find myself wondering how much this is an attempt at fixing the problem in the long term and how much this is to do with the fact there is an election this year... Maybe I'm just paranoid....

It's totally an "election year fix". What we are seeing is the result of 20+ years of economically irresponsible policies, which helped to foster a "short term profit at all cost" mentality. A system like that isn't sustainable. 

[Rictor]

save the anti-taxation garbage for freerepublic.com - let's stick to the topic at hand

..so you don't think that government spending has an impact on the economy? Even when it's to the tune of trillions of dollars? The dollar isn't in a historic rut because the stars have aligned - it was driven there by stupid policies.

[Kosh]

save the anti-taxation garbage for freerepublic.com - let's stick to the topic at hand

..so you don't think that government spending has an impact on the economy? Even when it's to the tune of trillions of dollars? The dollar isn't in a historic rut because the stars have aligned - it was driven there by stupid policies.

Government spending usually helps, since it gives people jobs and feeds money into the economy, that's why it's counted as part of a nations GDP. But in any case government spending isn't the culprit (although its debt certainly is), it's mostly poor behavior on Wall Street. Bad lending lending practices come to mind.......

[Rictor]

Its creates jobs at the expense of budget deficits and enormous public debt. That's essentially loaning money from the future to pay today's bills, which is fine if you plan on dying within the next 15 years. Spending and debt are one and the same.

[Kosh]

Its creates jobs at the expense of budget deficits and enormous public debt. That's essentially loaning money from the future to pay today's bills, which is fine if you plan on dying within the next 15 years. Spending and debt are one and the same.

No, it's not. Too much spending and not enough tax revenue leads to debt. We had a more or less balanced budget until "Reaganomics" (heavy military spending + massive tax cuts to rich people), suddenly the debt was quadrupled. Right now about a third of our budget is spent on the military, cut that in half and there would be no more deficit. 

[Rictor]

So we agree, because that's what I was saying. Although I'm a bit more pessimistic than you - the budget deficit is not the only leak that needs fixing. There's the debt to pay down (with glorious interest) as well as massive Social Security payments which are going to have to be made now that the Baby Boomers are getting old. Even if the military budget were halved or outright abolished (which is slightly less likely than the Moon exploding), that's still not enough money to cover obligation.

[Kazan]

save the anti-taxation garbage for freerepublic.com - let's stick to the topic at hand

..so you don't think that government spending has an impact on the economy? Even when it's to the tune of trillions of dollars? The dollar isn't in a historic rut because the stars have aligned - it was driven there by stupid policies.

way to totally misrepresent what i said - congratulation you get the manipulative-reply-of-the-day award

yes government spending has an impact on the economy - and that can be bad or good depending on the situation.

A trillion dollars if we're not running a fuqing republican-sized deficit is a great economic stimulus.

The Dollar is in a historic rut because A) huge current accounts [trade] deficit B) huge government budget deficit.

if you want to actually talk about something that would meaningfully affect the overall federal budget A) end the fuqing war B) cut permanant defense spending in half - we already spend 10x what the next seven highest spending countries do combined

[Kosh]

Even if the military budget were halved

Because of Enron-esque accounting practices, the actual budget of the military is much larger than is stated. Halving it would go a lot farther than you would give it credit for.