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    Uncle Sam Writes Us a Check: "Economic Stimulus" or Pandering?

    From the NYT:
    Tentative Deal Reached on Stimulus Plan

    By DAVID M. HERSZENHORN and DAVID STOUT

    WASHINGTON — House leaders and the White House on Thursday announced a tentative agreement on an economic stimulus package of roughly $150 billion that would pay stipends of $300 to $1,200 per household, and more for families with children, plus provide tax incentives for businesses to encourage spending.

    The accord was announced by Speaker Nancy Pelosi of California, Representative John A. Boehner of Ohio, the House Republican leader, and Treasury Secretary Henry M. Paulson Jr. at a Capitol news conference and hailed minutes afterward by President Bush as the fruit of “patience, determination and good will” in both parties.

    The president and the speaker both described the accord as embracing the basic precepts of their respective parties. Mr. Bush called it “a powerful and effective way to help taxpayers and businesses” by letting people keep and spend more of their own money.

    Ms. Pelosi said the package was aimed at the middle class “and to those who aspire to be in the middle class.” She described it as “timely, targeted and temporary — that was our standard.”

    In addition to the tax rebates, or stipends, Ms. Pelosi said the package would offer some quick relief for those homeowners in danger of losing their houses.

    Mr. Boehner called the package “simple, clean and neat.” Like Ms. Pelosi, he said none of the parties to the talks got everything they wanted. But in the end, he said, “This agreement is a big win for the American people.”

    President Bush said the agreement was also a victory for the kind of bipartisanship that some politicians and political analysts say is in short supply in Washington of late. And as he has many times, the president said the American economy is “structurally sound” despite rising energy prices and problems in the housing industry.

    Democrats released a summary estimating that the rebates would go to 117 million households. About two-thirds of the total package would go toward the rebates, with the remaining one-third going toward business tax breaks, like write-offs for equipment purchases.

    Both leaders pledged quick action in the House, and both pointedly urged similar alacrity by the Senate, whose members operate “with their very senatorial rules,” as Ms. Pelosi put it.

    “Speed is of the essence,” Mr. Paulson said.

    President Bush underscored that message, as he offered warm praise for the negotiators in both parties. He also took the opportunity to urge once again the extension of tax cuts that were approved by the Republican-controlled Congress early in the decade and are to expire within a few years.

    Senator Harry Reid of Nevada, the Democratic majority leader, said minutes after the announcement that he was pleased an agreement had been reached, and that he wanted a package ready for Mr. Bush by the time Congress recesses around President’s Day. But he said senators would “work to improve the House package” through the addition of unemployment benefits and other items.

    Late in the negotiations that preceded Thursday’s breakthrough, Ms. Pelosi agreed not to include two proposals that have broad support among Congressional Democrats: an extension of unemployment benefits and a temporary increase in food stamps.

    In exchange for those concessions, the Bush administration and House Republicans agreed that the stipend of at least $300 would be paid to all workers who earned at least $3,000 last year, even those who did not earn enough to pay taxes.

    As it was presented on Thursday afternoon, the package calls for workers who paid income taxes to receive $300 to $600, and couples to receive up to $1,200 — plus $300 more for each child. The stipend, which some lawmakers were calling a “tax rebate,” would be subject to income limits so that the wealthiest taxpayers would not receive it. Payments would go to individuals with adjusted gross incomes under $75,000 and couples with adjusted gross incomes under $150,000. (Late Thursday afternoon, the White House corrected an earlier statement that the $75,000 and $150,000 ceilings applied to taxable incomes.)Senators Reid and Mitch McConnell of Kentucky, the Republican minority leader, have yet to give their approval to the accord. But, while there may be some wrinkles to iron out between the House and Senate, there was nothing to suggest any disagreement so severe as to be a potential deal breaker.

    Republicans immediately cheered the deal as “tilted toward taxpayers” and avoiding “extraneous spending” on unemployment benefits, food stamps, or infrastructure projects, which some Democrats had said should be included in a stimulus package.

    But it was unclear how the package, without extended unemployment benefits or increased food stamps, would be received by Democrats in the Senate, including Senator Edward M. Kennedy of Massachusetts and Senator Charles E. Schumer of New York, who have said that those proposals offered the best prospects for quickly injecting added spending into the economy.

    Senator Max Baucus, the Montana Democrat who is chairman of the Finance Committee, reiterated his interest in extending unemployment benefits at a hearing on Thursday morning, where he said his committee would mark up a fiscal stimulus bill next week.

    “There are reports that a deal may be close on the House side,” Mr. Baucus said. “The Senate will want to speak, as well.”

    That announcement of potential action by the Finance Committee could jar Democratic leaders who have been striving for a carefully coordinated effort on the economy. Earlier this week, Mr. Reid announced that the House would take the lead in developing the stimulus package and would conduct the immediate negotiations with the White House and Congressional Republicans.

    Noting that tax rebates were one potentially cost-effective method to spur new spending, Mr. Baucus said: “Another example would be expanding unemployment insurance benefits. In recent recessions, Congress has extended the number of weeks that unemployed workers could receive benefits. We could do that again. We could provide a further extension for recipients in high unemployment states. And we could also temporarily increase the dollar amount of benefits to help unemployed workers to pay their bills.”

    “Unfortunately, under current law, fewer than 4 in 10 unemployed workers receive unemployment insurance benefits,” Mr. Baucus continued. “To address this problem, we could extend eligibility. For example, we could extend benefits to part-time workers.”

    Mr. Schumer, at the same committee hearing, also lamented Ms. Pelosi’s concession on unemployment benefits, but said he hoped that cooperation on a quick stimulus plan would continue. “While I may not agree with every element of the package — such as the decision to leave out extended unemployment benefits, which economists say would give us the greatest bang for the buck — there are some very positive developments around the tax rebate for families,” he said. “I encourage everyone to keep working in a bipartisan way.”

    Ms. Pelosi met three times on Wednesday with Treasury Secretary Paulson and Mr. Boehner, who have served as chief architects of the plan in a rare show of bipartisanship.

    On her way into a meeting Wednesday evening, Ms. Pelosi signaled that a deal might be close when she said there had been “tremendous” progress during the day.

    Democratic leaders said that to speed the economic rescue package they would mostly bypass the usual committee process. Lawmakers said that they hoped the plan could be approved by mid-February and that it would be sufficient to soften an economic downturn and forestall a recession.

    “One of the principal tenets of the administration and of ourselves is we have got to do this fast,” Representative Steny H. Hoyer of Maryland, the majority leader, said Wednesday. “To go through the regular process and have hearings and have mark-ups and subcommittee mark-ups, obviously we would be to some degree twiddling our thumbs while the economy burns.”

    The progress toward a stimulus plan came as the Congressional Budget Office revised its economic projections to give a gloomier assessment of the economy, including a widening budget deficit and the first decline in corporate tax revenue since 2003.

    The grimmer outlook prompted Senator Kent Conrad of North Dakota, chairman of the Budget Committee, to declare that a short-term stimulus package was insufficient.

    “In addition to developing a bipartisan stimulus package,” Mr. Conrad said, “we also must work together to tackle the long-term fiscal challenges we face with the coming retirement of the baby boom generation. The American people rightly expect that we will come together to address these two significant challenges.”

    House conservatives raised alarms about the emerging economic legislation, saying they feared it would focus too much on tax rebates and not enough on tax incentives to encourage businesses to create jobs.

    They said any package should include provisions that would reduce the corporate tax rate, adjust capital gains for inflation and lower the capital gains rate for corporations.

    “Giving temporary tax rebate checks to families, as important as that is, is not the same as economic growth,” said Representative Jeb Hensarling of Texas, chairman of the Republican Study Committee. “If you’re going to have an economic stimulus package, it ought to contain some economic stimulus.”


    Steven Lee Myers contributed reporting.

    [Earlier versions of this article referred incorrectly in some instances to the rebates, or stipends, to be paid to workers and households. The White House said Thursday afternoon that the rebates would be available to those with at least $3,000 in earned income and would amount to $300 to $600 per person and $600 to $1,200 per couple, depending on earnings. Everyone eligible would receive an additional $300 per child, so that, for instance, a couple with two children could get up to $1,800 in tax relief.]
    Not sold on this idea. Between this and the recent interest rate cut--one even higher than the one during the economic downturn following 9/11--I'm smelling election year panic.

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    Last edited by Grendel; 01-25-2008 at 03:10 PM.


    Patriot, n. One to whom the interests of a part seem superior to the interests of the whole. The dupe of statesmen and the tool of conquerers. ---Ambrose Bierce

  2. #2
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    Nothing like printing more money, making the dollar worth even less, to fix an already fucked up economy... bunch of goddamn dingdongs running things in DC. This is like trying to fix a sucking chest wound with a bandaid.

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    Last edited by WarBeast; 01-25-2008 at 03:52 PM.


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  3. #3
    anti-social worker
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    Quote Originally Posted by WarBeast View Post
    Nothing like printing more money, making the dollar worth even less, to fix an already fucked up economy... bunch of goddamn dingdongs running things in DC. This is like trying to fix a sucking chest wound with a bandaid.
    And a band-aid 5-6 months down the road, at that.

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  4. #4
    Good luck out there
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    The money could better spent elsewhere. Political pandering without much subtlety.

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    so every retard in America can go blow it on dumb shit. when (if) we get these checks, $500 is going into the bank and $100 is going towards food/house hold/clothes.

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    zzzzz

  6. #6
    I paid $20 for what?
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    I'm going to take this and paraphrase:
    The stipend, which some lawmakers were calling a “tax rebate,” would be subject to income limits so that the wealthiest taxpayers would not receive it.
    In a victory for wishful thinking and the total annihilation of logic, the people who most earned a rebate were excluded from having one. Non-workers under the age of 18 are most eligible.

    It looks to me like my family will probably have about $1800 coming. I'm actually kind of pissed off about this. I did not work for it, did not earn it, and do not want to have this money stolen from someone else to be given to me.

    However, it occurs to me that either opening a savings account or buying stocks from some large business will -- at least momentarily -- put some of the money back where it belongs. I will need to speak with my wife about doing just that.

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  7. #7
    anti-social worker
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    Quote Originally Posted by Luris Blear View Post
    I'm going to take this and paraphrase:In a victory for wishful thinking and the total annihilation of logic, the people who most earned a rebate were excluded from having one. Non-workers under the age of 18 are most eligible.
    There's logic, just not *that* logic. This isn't about a reward of some kind, it's about getting people spending.

    The rationale is that the spending habits of upper-tier earners--your "most deserving"--will not be affected by the stimulus checks. The individuals of lower income levels, however, will--allegedly--turn that money right back into circulation with their "stimulated" purchasing power.

    Unfortunately, this doesn't account for the debt many people are carrying, and a lot of this is likely to end up paying off monies that have already been spent, not new purchases.

    Further, as it happens, evidence seems to indicate that the measures most likely to result in the stated goal of economic stimulus are those that were bartered away by Nancy Pelosi: those affecting unemployment insurance and food stamps:
    he two respected institutions that have rated stimulus options in recent days — the Congressional Budget Office and Moody’s Economy.com — both give their two highest ratings for effectiveness as stimulus to the two measures that were dropped.

    * Of all tax and spending stimulus options that CBO examined, the only two that it found would have a large “bang-for-the-buck” as effective stimulus and act fast to boost the economy are the unemployment insurance and food stamp provisions. Both could start injecting more consumer purchasing power into the economy within one to two months. The planned tax rebate checks, in contrast, are not likely to be sent out until June.

    * Economy.com found that for each dollar spent on extended UI benefits, $1.64 in increased economic activity would be generated. For each dollar in increased food stamp benefits, $1.73 in new economic activity would be generated. No other options rated as high.

    * In contrast, Economy.com found that for each dollar in “accelerated depreciation” — the main business tax cut in the package — only 27 cents of increased economic activity would be generated. CBO and a Federal Reserve study in 2006 found that the business tax cuts adopted in the last recession, which closely resemble those in the current package, had only modest stimulative effects. Despite this evidence, the package apparently contains at least $50 billion in business tax cuts while excluding unemployment insurance — the single measure most focused on the people hardest hit by the downturn — and food stamps.

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  8. #8
    uhm's only hospital corpsman
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    i think they have forgot the main reason why people are not spending with half the population in poverty and rising gas and food prices i wonder why we can't spend money? hmmmm? hell i've got a plan this year to save tons of money...I don't want to spend a dime...however,.this extra money we get will go towards my uniforms a new pair of running shoes which i need because my feet are f*cked up according to the doctor, and the rest will most likely go into savings unless we NEED it for soemthing else.

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    in the name of god impure souls of the living dead shall be banished into eternal damnation amen

  9. #9
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    Quote Originally Posted by Luris Blear View Post
    I'm going to take this and paraphrase:In a victory for wishful thinking and the total annihilation of logic, the people who most earned a rebate were excluded from having one. Non-workers under the age of 18 are most eligible.
    When I read this, I am reminded of what Warren Buffet said about taxation.. he said that his people could easily work the system to where he legally never has to pay a penny in tax, and that he is one of the few in his position that doesn't do that...


    ...whether that is true or not is purely up to conjecture, but it is worth considering when throwing out tax rebates and who is more worthy of them, I would think.

    It looks to me like my family will probably have about $1800 coming. I'm actually kind of pissed off about this. I did not work for it, did not earn it, and do not want to have this money stolen from someone else to be given to me.
    You could look at it like that, and I am in complete understanding of that viewpoint, but I am more of the idea that IRS is theft-incarnate... it is an unconstitutional money grabbing machine that steals from us all. One could look at the rebate as money stolen from you being given back.

    having said that, I want to be clear that, as stated before, I do not support this rebate... I think it is just going to further devalue a dollar that is already weaker than it damn well should be.

    I want to see the federal government sized down from its current bloated state and IRS eradicated... I wonder how many people that are currently on government assistance would need that assistance if IRS wasn't taking a chunk out of their bottom line every week.

    And don't get me started on what the taxes are paying for... paying off the interest on loans to the government from the Fed... it's all a bunch of heinous shit.

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  10. #10
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    Quote Originally Posted by WarBeast View Post
    having said that, I want to be clear that, as stated before, I do not support this rebate... I think it is just going to further devalue a dollar that is already weaker than it damn well should be.
    Protest the only way you can: bust their (already misguided) "everyone will go out and buy a plasma tv" dreams, and pay off bills and other debts--money that's already spent.

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  11. #11
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    Quote Originally Posted by Grendel View Post
    Protest the only way you can: bust their (already misguided) "everyone will go out and buy a plasma tv" dreams, and pay off bills and other debts--money that's already spent.
    And THAT is EXACTLY what the wife and I plan to do... The entire thing is gonna knock out one of our credit cards, and then we're gonna cut the damn thing up.
    My goal is to eliminate credit cards from our household as much as possible.

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    I paid $20 for what?
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    I hate to begin a line of thinking that pisses people off, but doesn't this country generally spend more money on food stamps than our people use anyway? This may be some distorted partisan right wing ranting but I'm only trying to present the what if.

    IF our country generally overprints food stamps then why spend more on those, either? They won't even help the hungry except to tax future employers out of providing more jobs/wages.

    I do mean to present this as an "if" statement. I also mean to consider, entirely, that this is a completely stupid, pointless, and destructive bout of electioneering in the long term.

    Yeah, I have one credit card, plus a mortgage and a car payment. By my math, the credit card will be knocked back to 0 in about 31 days. That's without having to sacrifice my apparent American right to a big screen television or 5.1 Surround Sound system.

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    Last edited by Luris Blear; 02-03-2008 at 06:37 PM.
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    So...we're going to borrow all this money from CHINA.....then us dumb asses are going to receive this check....then blow it all on stuff....MADE IN CHINA....This is retarded.

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    Quote Originally Posted by Luris Blear View Post
    IF our country generally overprints food stamps then why spend more on those, either?
    Because that's not how the system works. It's not like there are vouchers sitting in a drawer, somewhere.

    When stories mention "food stamps" (actually, most states use debit-like EBT cards) going unused, they're referring to the fact that people who are eligible aren't enrolled, whether because of lack of knowledge, red tape, or the stigma of receiving benefits. The CBO study shows that expanding benefits for whatever individuals are actually availing themselves of them stimulates increased economic activity.

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    uhm's only hospital corpsman
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    i recently read that the United Nations is using our tax paying money form this country to help IRAN research natural gas usage...WTF????

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    Want to stimulate the economy? Here's an idea:

    END THE WAR.

    All that money being spent overseas will be spent within our own borders, and if not, for items that can be sold within our borders. That's how you stimulate the economy - you keep the money in-house.

    If they cut these checks, we're in serious trouble.

    I'll never forget the major push by people here (at UHM) in favor of the Bush Administration in '00 and '04. Hate to say it, but I was one of the few who can now say, "Told you so!"

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    I paid $20 for what?
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    Alternately, we could have done one of two other things:

    Our leaders could have decided we were fighting this war to win a war before spending three years just fighting.

    Bush could have put our tanks and troops back on the Navy carriers and told Chirac/Kofi that they could protect Iraq's neighbors if the sanctions were working so well.

    Meh. That second point. Self-destruction for a quick buck looks like the purpose of any world Government these days.

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    Quote Originally Posted by toxicangel19 View Post
    i recently read that the United Nations is using our tax paying money form this country to help IRAN research natural gas usage...WTF????
    Hardly a "WTF?"

    Iran has one of the largest natural gas reserves in the world, second in size only to Russia's. Given ever-increasing global energy needs, it shouldn't be surprising, at all, that the UN is funding work (yes, using monies collected from its member nations' dues) to facilitate the use of these resources.

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