UPDATE 1-Obama: stimulus plan can add, save up to 4 mln jobs

[Auburn85 438]

http://uk.reuters.com/article/oilRpt/idUKN...lBrandChannel=0

By Deborah Charles

WASHINGTON, Jan 10 (Reuters) - President-elect Barack Obama said on Saturday an analysis of his stimulus proposals shows that up to 4 million U.S. jobs could be saved or created by 2010, nearly 90 percent of them in the private sector.

Obama had previously said his estimated $800 billion plan to lift the country out of a yearlong recession would create or save 3 million jobs, but the new analysis showed that number would range between 3 million and 4 million.

"The jobs we create will be in businesses large and small across a wide range of industries," Obama said on his weekly radio and Internet address. "And they'll be the kind of jobs that don't just put people to work in the short term, but position our economy to lead the world in the long-term."

The analysis was submitted by the head of Obama's council of economic advisers, Christina Romer, and Vice President-elect Joe Biden's chief economic adviser, Jared Bernstein.

It came just after official figures showed U.S. employers slashed more than half a million jobs from their payrolls in December, pushing the unemployment rate to 7.2 percent and bringing the number of jobs lost last year to 2.6 million -- the most since 1945.

Obama said his plan would create nearly 500,000 jobs by investing in clean energy, by committing to double the production of alternative energy in the next three years and by improving the energy efficiency of 2 million American homes.

"These made-in-America jobs building solar panels and wind turbines, developing fuel-efficient cars and new energy technologies pay well, and they can't be outsourced," he said.

Obama's top aides visited Capitol Hill on Friday to allay lawmakers' concerns about his proposal, which would combine tax cuts, aid to states and public works projects. He has faced opposition from both Republican and Democratic lawmakers over the plan because of its high cost and proposed tax cuts.

REPAIRING INFRASTRUCTURE

Obama said the report showed the recovery plan -- which analysts have estimated will cost $800 billion -- will also put nearly 400,000 people back to work repairing infrastructure like crumbling roads, bridges and school and laying down miles of broadband lines.

"Finally, we won't just create jobs, we'll also provide help for those who've lost theirs, and for states and families who've been hardest-hit by this recession," he said.

"That means bipartisan extensions of unemployment insurance and health care coverage; a $1,000 tax cut for 95 percent of working families; and assistance to help states avoid harmful budget cuts in essential services like police, fire, education and health care."

Obama has not put a price tag on his American Recovery and Reinvestment Plan but in the report his advisers said they were using a figure of "just slightly over the $775 billion currently under discussion."

Mitch McConnell, the Republican minority leader in the U.S. Senate, said he wanted to make sure that the massive proposal actually creates jobs.

"We want to make sure it's not just a trillion-dollar spending bill, but something that actually can reach the goal that he has suggested," McConnell said.

Though Obama did not mention it in the radio address, the report suggested that tax cuts, especially temporary ones, and fiscal relief to the states are likely to create fewer jobs than direct increases in government purchases. (Editing by Doina Chiacu)

since nearly 90% will be private sector, that means the other 10% ish will be government sector?

quick math: 10% of 4 million =400,000 new government jobs. It does say create/save a total of 4 million. So maybe it creates 2 million and saves 2 million. 10% of 2 million is 200,000 new government jobs. Since it says nearly 90% of the jobs created will be private sector. The figure will be more than 10%. Perhaps 11,12,13%?

[RunInRed 19,609]

10% = public sector (Cops, Fire Fighters, Teachers, etc.)

[au2004ece 30]

Obama's statement that he will create OR SAVE 4 million jobs is a riciulous statement. How do you measure how many jobs you save? Couldn't it be said that a president is saving every employed person's job by preventing the entire country from being destroyed? So, he has set himself up to be able to achieve his "goal" if the entire country isn't destroyed.

Is there nobody else that sees through this style of speaking?

[RunInRed 19,609]

I believe he asked his economic advisors to come up with such data based on implementing or not implementing the proposed stimulus. The "saved" number is the additional job loss expected if a stimulus is not passed

[au2004ece 30]

The "saved" number is the additional job loss expected if a stimulus is not passe

There is no way to measure that amount. So, he is just talking out of his ass when he says he wants to create OR SAVE 4 million jobs. There is no way to fail, so he isn't achieve anything by meeting that fake objective.

The stimulus, as crafted now, will allow for more jobs in the short run (through infrastructure projects), but will cause jobs to be lost in the long run (through increased taxation and higher interest rates due to an unmanageable government debt.

[RunInRed 19,609]

Tell it to his economic team. Or do you know more than this group?

[TigerHeat 9]

Tell it to his economic team. Or do you know more than this group?

Ooohhh, the Emperor's Benevolent Leader's new clothes are BEAUTIFUL! Where can I get a suit tailored like that? I love the fabric!!!

[au2004ece 30]

Tell it to his economic team. Or do you know more than this group?

They don't care about economics. They only care about politics, which they are very good at.

Every economist knows this crap will hurt in the long run because of increased debt, inflation, and stunted growth due to the need for higher taxes; but the politicians are going to do what the public demands (do something) even if it is wrong. The stimulus serves that purpose because then the politicians can say, "see, we did ALL THIS", and not enough people in this country know the difference between good economic policy and bad to blame those that did the wrong thing. 5-10 years from now, few will believe the truth that things are worse because of this "stimulus" than they would have been without it.

Bush in this last year has been doing and Obama plans to do everything the opposite of what would actually help the most. The American public learned the wrong lessons from these problems (de-regulation is bad even though too much regulation was part of the cause of the financial crisis, tax cuts for everybody are bad even though across-the-board tax cuts spurred growth in the 80's and the early part of this decade while the rebate plans failed everytime), so the politicians are doing the wrong things to solve the problems.

[TigerHeat 9]

Tell it to his economic team. Or do you know more than this group?

They don't care about economics. They only care about politics, which they are very good at.

Every economist knows this crap will hurt in the long run because of increased debt, inflation, and stunted growth due to the need for higher taxes; but the politicians are going to do what the public demands (do something) even if it is wrong. The stimulus serves that purpose because then the politicians can say, "see, we did ALL THIS", and not enough people in this country know the difference between good economic policy and bad to blame those that did the wrong thing. 5-10 years from now, few will believe the truth that things are worse because of this "stimulus" than they would have been without it.

Bush in this last year has been doing and Obama plans to do everything the opposite of what would actually help the most. The American public learned the wrong lessons from these problems (de-regulation is bad even though too much regulation was part of the cause of the financial crisis, tax cuts for everybody are bad even though across-the-board tax cuts spurred growth in the 80's and the early part of this decade while the rebate plans failed everytime), so the politicians are doing the wrong things to solve the problems.

Why do you hate black people, gay people, Hispanics, women and the poor? Hater.

Fearless Leader will save 141 million jobs in spite of mean-spirited hatemongers like you.

Just shut up and pay your taxes. He'll let you know when he needs more.

[RunInRed 19,609]

Shall we tell Obama that Larry Summers, Paul Volcker, Tim Geithner, Peter Orzag, Christina Romer and his other non-positioned advisors like Warren Buffett that they've got it all wrong? Since you are right and they are wrong and because you seem to have all the answers, why don't you provide the transition team with your contact information so you can come in and save the economic day for the country.

[au2004ece 30]

Shall we tell Obama that Larry Summers, Paul Volcker, Tim Geithner, Peter Orzag, Christina Romer and his other non-positioned advisors like Warren Buffett that they've got it all wrong? Since you are right and they are wrong and because you seem to have all the answers, why don't you provide the transition team with your contact information so you can come in and save the economic day for the country.

You make no argument to refute what I say, so I am going to assume that you agree with me but somehow trust that these people you name have the country's best interest at heart (instead of only wanting to soften blame for themselves) and will do the wrong thing the correct way.

Untie that blindfold and you will see that all these politicians are simply trying to ensure their own survival. Doing whats best will not make people happy because it will cause short-term pain. These guys are choosing short-term boosts and long-term pain because they will only be judged in the short-term.

[RunInRed 19,609]

There was no argument to refute - you simply blasted the actions so far -- I'm assuming the first $350B of TARP and the current stimulus proposal that is on the table (even though it is still a work in progress). I simply think to dismiss all of these well respected opinions without even laying out a solution of your own is a tad much.

So lay out your proposals and I will agree or disagree as appropriate.

[au2004ece 30]

Doing nothing is better than what is being proposed, but to illustrate what I am talking about, here is what I would do:

1. Cut Spending to lower the annual deficit. This will allow for lower taxes in the future. When people and corporations expect lower taxes they tend to be more open to expanding instead of protecting the current status quo. This would cause short-term pain, but long-term prosperity. This is the opposite of the current plan (short-term boost and long-term pain). Did you read the article in the "Trillion dollar spending is the road to ruin" thread?

2. Lower taxes for middle income Americans in a way that is permanent. Do not simply give out 2 years worth of a tax cut over 1 quarter. That is not a real tax cut and is only a series of a few tax rebates sent through employers. If tax cuts are permanent, then people can plan to invest/save/spend the extra money in a meaningful way.

3. Do not give tax cuts to people that do not pay any net taxes. This is blatantly unfair and not really a tax cut. It is welfare.

4. Extend the tax cuts passed in 2001. Do not repeal them. This will allow for more money for investing in this time where prices are lower than before.

5. Infrastructure: we do need road repair, new roads, etc. This is one of the few things that the federal government should provide. But we should only build the roads that we need, not roads that would just be built to give somebody a job.

6. Stop all bailouts.

7. Quit acting like government is a solution to each person's problems. When government is omnipresent, people think they can rely on it to solve all of their problems. So, government spends more and more money to try to solve these problems. But, each person is the only person that can solve their own problems. If government weren't alway there to take the blame or to act like they are going to give people something for free, then people would get up and go to work on fixing their own lives. Instead, they can just wait until the government sends them their money or does this stimulus or does the next stimulus or bails out this company or gives them free healthcare or makes people be nice to them or tells them that the rich people are going to pay for everything.

[RunInRed 19,609]

Doing nothing is better than what is being proposed, but to illustrate what I am talking about, here is what I would do:

Disagree. I don't understand this chant by some at all. You can't even imagine the blood on Wall St. and subsequent pain felt on main street if this had of happened. Simply put, credit markets would have completely locked up, major banks would have failed, and there would have been a run on all banks. This event alone would have ignited fire storms in every other single industry across the globe. Unemployment and many other key indicators would have dropped to levels not seen since the '30s. We still have challenging times now and I don't necessarily agree with exactly how, to whom, and the conditions (or lack thereof) associated with the first $350B but to have done nothing is unfathomable to me.

1. Cut Spending to lower the annual deficit. This will allow for lower taxes in the future. When people and corporations expect lower taxes they tend to be more open to expanding instead of protecting the current status quo. This would cause short-term pain, but long-term prosperity. This is the opposite of the current plan (short-term boost and long-term pain). Did you read the article in the "Trillion dollar spending is the road to ruin" thread?

Agree that the Fed needs to tighten it's belt. And I'm looking forward to the results of the "line item budget review" that Obama promised. However, I would not support an across the board "spending moratorium" that some want. If you don't want to kill a patient on life support, you don't pull the oxygen and blood tubes. Further, you need some thing to "jump start" him back to good health.

2. Lower taxes for middle income Americans in a way that is permanent. Do not simply give out 2 years worth of a tax cut over 1 quarter. That is not a real tax cut and is only a series of a few tax rebates sent through employers. If tax cuts are permanent, then people can plan to invest/save/spend the extra money in a meaningful way.

Agree. Obama advocated for tax cuts for 95% for middle income Americans and all early indications are this promise will be fulfilled in his stimulate act where early reports say these tax cuts make up a large chunk of the overall package. Disagree on your permanent comment. The Federal government always needs the flexibility to adapt to conditions on the ground. What if America was invaded and we had to fund a War? -- this is an extreme example but the point stands. Further, any "permanent tax cuts" could always be changed anyways. That is how our legislative process and democracy is setup. So while "permanent" might be some courtesy signal to some, it's impractical and would have no real meaning.

3. Do not give tax cuts to people that do not pay any net taxes. This is blatantly unfair and not really a tax cut. It is welfare.

Agreed. I have no problem with this.

4. Extend the tax cuts passed in 2001. Do not repeal them. This will allow for more money for investing in this time where prices are lower than before.

Do you want to extend them or make them permanent? Would this be in addition to the tax cuts you advocated for the middle class above? I guess the bottom line is what do you think the Fed rate for middle class earners should be? Or what tax structure overall are you advocating for? Some unclear signals in your post.

5. Infrastructure: we do need road repair, new roads, etc. This is one of the few things that the federal government should provide. But we should only build the roads that we need, not roads that would just be built to give somebody a job.

Agreed. Obama spoke passionately about this during the campaign and early indicators state these non-sexy projects will be a big part of his stimulus package.

6. Stop all bailouts.

Agree and disagree (see above). Hopefully, "bailout" will prove to be the wrong word. I'm cautiously optimistic that as with Mexico, Chrysler and others, the government will be repaid these "loans" in time and actually make money on their investments.

7. Quit acting like government is a solution to each person's problems. When government is omnipresent, people think they can rely on it to solve all of their problems. So, government spends more and more money to try to solve these problems. But, each person is the only person that can solve their own problems. If government weren't alway there to take the blame or to act like they are going to give people something for free, then people would get up and go to work on fixing their own lives. Instead, they can just wait until the government sends them their money or does this stimulus or does the next stimulus or bails out this company or gives them free healthcare or makes people be nice to them or tells them that the rich people are going to pay for everything.

Agree - I'm a big fan of self reliance. However, I've said it before and I'll say it again, there are certain things that the private sector either can't or won't do and thus, Government should have an appropriate role. I do not subscribe to the notion that Government is always bad and that any thing they do should be considered a "hand out."

[Auburn85 438]

http://news.yahoo.com/s/ap/20090113/ap_on_...uLgor3hsHuyFz4D

Obama Increase likely for low-income elderly

WASHINGTON – More than 7 million poor people who are elderly, blind or disabled and receive cash benefits averaging $477 a month could get an extra monthly payment as part of President-elect Barack Obama's $800 billion economic recovery plan.

Democratic congressional aides said the idea of an extra Supplemental Security Income payment is gaining traction on Capitol Hill as lawmakers and staff aides hold daily meetings to work out details of the upcoming stimulus bill. The aides spoke on condition of anonymity to discuss the closed-door negotiations.

Democratic lawmakers hope to have an economic stimulus bill ready for Obama's signature by mid-February, although officials indicated Monday night that numerous provisions are unsettled.

Several said the emerging legislation likely will provide at least $70 billion over the next two years to help states meet the demand for Medicaid, which provides health care for low income people, and another $25 billion more to help individuals who cannot afford to pay for private, post-employment health benefits.

An estimated $35 billion is tentatively ticketed for additional unemployment benefits.

The tax provisions remain in flux, with Obama's call for a break for companies that create new jobs described by Democratic officials as all but dead. Several Democrats prefer to use the funds to make sure upper middle class families are not ensnared by the alternative minimum tax.

Democrats are more favorably inclined toward Obama's proposal for a tax break for lower-paid individuals and couples, of up to $500 and $1,000.

The officials who described the provisions did so on condition of anonymity, saying they were not authorized to discuss the details.

The idea of a one-time, additional SSI payment this year would cost about $4 billion, which would go to more than 7 million poor people enrolled in the program. Most of them are disabled, though about 2 million poor seniors would also benefit.

The relatively low cost of the idea seems to help its chances, though it's not a sure bet to be included in the final economic recovery package, which will blend tax cuts for individuals and businesses with huge spending initiatives such as aid to state governments, an increase in local school aid, and infrastructure projects such as road and bridge construction and repair.

"It's in the package as of now," said an aide to a top House leader.

b]The idea meets one of Obama's key criterion for the stimulus bill, which is to speed money into the hands of people who are likely to spend it. One criticism of last year's $600-1,200 tax rebate checks to individuals and couples was that many people simply saved the money or paid down debt instead of injecting it into the economy through spending. Even with their monthly checks, SSI recipients remain in poverty, and they're more likely to spend the money quickly.[/b]

"These people are extremely poor," said Bob Greenstein, founder of the liberal Center on Budget and Policy Priorities. "I certainly think, and I think the Obama people have thought that this is a very sound stimulus idea. It would have one of the highest bangs for the buck."

Obama transition spokesman Nick Shapiro would not confirm that Obama supports the idea. The transition has been tightlipped about many elements of the economic recovery package as it is being negotiated.

Supplemental Security Income delivers payments of up to $637 per month to individuals and $956 to couples. About one-fourth of recipients are 65 or older.

hell, why don't they just send us government mandated gift cards instead.

[autigeremt 7,537]

I have a valid question. How many of these infrastructure jobs can be maintained over a 4-6 year period? Construction jobs are not "career" structured, and when the work is done, well....it's done. It makes me wonder if there's more to this than meets the eye. 4-6 years would put Obama either in his second term with another recession to hand over, or a peak at the end of his first term prior to a slowdown during his second term.

Either way, infrastructure jobs do not come with a career tag. These jobs are for contractors and hard labor, which have UNION written all over it up north.

[Auburn85 438]

here's paul krugman's take

http://www.nytimes.com/2009/01/12/opinion/...tml?ref=opinion

Last week President-elect Barack Obama was asked to respond to critics who say that his stimulus plan won’t do enough to help the economy. Mr. Obama answered that he wants to hear ideas about “how to spend money efficiently and effectively to jump-start the economy.”

O.K., I’ll bite — although as I’ll explain shortly, the “jump-start” metaphor is part of the problem.

First, Mr. Obama should scrap his proposal for $150 billion in business tax cuts, which would do little to help the economy. Ideally he’d scrap the proposed $150 billion payroll tax cut as well, though I’m aware that it was a campaign promise.

Money not squandered on ineffective tax cuts could be used to provide further relief to Americans in distress — enhanced unemployment benefits, expanded Medicaid and more. And why not get an early start on the insurance subsidies — probably running at $100 billion or more per year — that will be essential if we’re going to achieve universal health care?

Mainly, though, Mr. Obama needs to make his plan bigger. To see why, consider a new report from his own economic team.

On Saturday, Christina Romer, the future head of the Council of Economic Advisers, and Jared Bernstein, who will be the vice president’s chief economist, released estimates of what the Obama economic plan would accomplish. Their report is reasonable and intellectually honest, which is a welcome change from the fuzzy math of the last eight years.

But the report also makes it clear that the plan falls well short of what the economy needs.

According to Ms. Romer and Mr. Bernstein, the Obama plan would have its maximum impact in the fourth quarter of 2010. Without the plan, they project, the unemployment rate in that quarter would be a disastrous 8.8 percent. Yet even with the plan, unemployment would be 7 percent — roughly as high as it is now.

After 2010, the report says, the effects of the economic plan would rapidly fade away. The job of promoting full recovery would, however, remain undone: the unemployment rate would still be a painful 6.3 percent in the last quarter of 2011.

Now, economic forecasting is an inexact science, to say the least, and things could turn out better than the report predicts. But they could also turn out worse. The report itself acknowledges that “some private forecasters anticipate unemployment rates as high as 11 percent in the absence of action.” And I’m with Lawrence Summers, another member of the Obama economic team, who recently declared, “In this crisis, doing too little poses a greater threat than doing too much.” Unfortunately, that principle isn’t reflected in the current plan.

So how can Mr. Obama do more? By including a lot more public investment in his plan — which will be possible if he takes a longer view.

The Romer-Bernstein report acknowledges that “a dollar of infrastructure spending is more effective in creating jobs than a dollar of tax cuts.” It argues, however, that “there is a limit on how much government investment can be carried out efficiently in a short time frame.” But why does the time frame have to be short?

As far as I can tell, Mr. Obama’s planners have focused on investment projects that will deliver their main jobs boost over the next two years. But since unemployment is likely to remain high well beyond that two-year window, the plan should also include longer-term investment projects.

And bear in mind that even a project that delivers its main punch in, say, 2011 can provide significant economic support in earlier years. If Mr. Obama drops the “jump-start” metaphor, if he accepts the reality that we need a multi-year program rather than a short burst of activity, he can create a lot more jobs through government investment, even in the near term.

Still, shouldn’t Mr. Obama wait for proof that a bigger, longer-term plan is needed? No. Right now the investment portion of the Obama plan is limited by a shortage of “shovel ready” projects, projects ready to go on short notice. A lot more investment can be under way by late 2010 or 2011 if Mr. Obama gives the go-ahead now — but if he waits too long before deciding, that window of opportunity will be gone.

One more thing: even with the Obama plan, the Romer-Bernstein report predicts an average unemployment rate of 7.3 percent over the next three years. That’s a scary number, big enough to pose a real risk that the U.S. economy will get stuck in a Japan-type deflationary trap.

So my advice to the Obama team is to scrap the business tax cuts, and, more important, to deal with the threat of doing too little by doing more. And the way to do more is to stop talking about jump-starts and look more broadly at the possibilities for government investment.

krugman is very wise. he's won a nobel prize. he predicted some of the current economic turmoil years ago. he's a big advocate for government intervention though.

he's the peter schiff of the left.

[TigerHeat 9]

here's paul krugman's take

http://www.nytimes.com/2009/01/12/opinion/...tml?ref=opinion

Last week President-elect Barack Obama was asked to respond to critics who say that his stimulus plan won’t do enough to help the economy. Mr. Obama answered that he wants to hear ideas about “how to spend money efficiently and effectively to jump-start the economy.”

O.K., I’ll bite — although as I’ll explain shortly, the “jump-start” metaphor is part of the problem.

First, Mr. Obama should scrap his proposal for $150 billion in business tax cuts, which would do little to help the economy. Ideally he’d scrap the proposed $150 billion payroll tax cut as well, though I’m aware that it was a campaign promise.

Money not squandered on ineffective tax cuts could be used to provide further relief to Americans in distress — enhanced unemployment benefits, expanded Medicaid and more. And why not get an early start on the insurance subsidies — probably running at $100 billion or more per year — that will be essential if we’re going to achieve universal health care?

Mainly, though, Mr. Obama needs to make his plan bigger. To see why, consider a new report from his own economic team.

On Saturday, Christina Romer, the future head of the Council of Economic Advisers, and Jared Bernstein, who will be the vice president’s chief economist, released estimates of what the Obama economic plan would accomplish. Their report is reasonable and intellectually honest, which is a welcome change from the fuzzy math of the last eight years.

But the report also makes it clear that the plan falls well short of what the economy needs.

According to Ms. Romer and Mr. Bernstein, the Obama plan would have its maximum impact in the fourth quarter of 2010. Without the plan, they project, the unemployment rate in that quarter would be a disastrous 8.8 percent. Yet even with the plan, unemployment would be 7 percent — roughly as high as it is now.

After 2010, the report says, the effects of the economic plan would rapidly fade away. The job of promoting full recovery would, however, remain undone: the unemployment rate would still be a painful 6.3 percent in the last quarter of 2011.

Now, economic forecasting is an inexact science, to say the least, and things could turn out better than the report predicts. But they could also turn out worse. The report itself acknowledges that “some private forecasters anticipate unemployment rates as high as 11 percent in the absence of action.” And I’m with Lawrence Summers, another member of the Obama economic team, who recently declared, “In this crisis, doing too little poses a greater threat than doing too much.” Unfortunately, that principle isn’t reflected in the current plan.

So how can Mr. Obama do more? By including a lot more public investment in his plan — which will be possible if he takes a longer view.

The Romer-Bernstein report acknowledges that “a dollar of infrastructure spending is more effective in creating jobs than a dollar of tax cuts.” It argues, however, that “there is a limit on how much government investment can be carried out efficiently in a short time frame.” But why does the time frame have to be short?

As far as I can tell, Mr. Obama’s planners have focused on investment projects that will deliver their main jobs boost over the next two years. But since unemployment is likely to remain high well beyond that two-year window, the plan should also include longer-term investment projects.

And bear in mind that even a project that delivers its main punch in, say, 2011 can provide significant economic support in earlier years. If Mr. Obama drops the “jump-start” metaphor, if he accepts the reality that we need a multi-year program rather than a short burst of activity, he can create a lot more jobs through government investment, even in the near term.

Still, shouldn’t Mr. Obama wait for proof that a bigger, longer-term plan is needed? No. Right now the investment portion of the Obama plan is limited by a shortage of “shovel ready” projects, projects ready to go on short notice. A lot more investment can be under way by late 2010 or 2011 if Mr. Obama gives the go-ahead now — but if he waits too long before deciding, that window of opportunity will be gone.

One more thing: even with the Obama plan, the Romer-Bernstein report predicts an average unemployment rate of 7.3 percent over the next three years. That’s a scary number, big enough to pose a real risk that the U.S. economy will get stuck in a Japan-type deflationary trap.

So my advice to the Obama team is to scrap the business tax cuts, and, more important, to deal with the threat of doing too little by doing more. And the way to do more is to stop talking about jump-starts and look more broadly at the possibilities for government investment.

krugman is very wise. he's won a nobel prize. he predicted some of the current economic turmoil years ago. he's a big advocate for government intervention though.

he's the peter schiff of the left.

I disagree. Jimmah Carter won a Nobel prize, too. Nostradamus also predicted economic turmoil. So did my cousin's ouija board.

Krugman is a blithering idiot masquerading as a genius. He is Mr. Critical Theory, and ironically, a Jewish European-style socialist. He was also an Enron guy.

Most economists talk down the economy when things are good. You can't miss. You just claim your timetable was off due to XYZ occurring. Krugman uses his reputation to damage political opponents of his heroes.

[au2004ece 30]

Doing nothing is better than what is being proposed, but to illustrate what I am talking about, here is what I would do:

Disagree. I don't understand this chant by some at all. You can't even imagine the blood on Wall St. and subsequent pain felt on main street if this had of happened. Simply put, credit markets would have completely locked up, major banks would have failed, and there would have been a run on all banks. This event alone would have ignited fire storms in every other single industry across the globe. Unemployment and many other key indicators would have dropped to levels not seen since the '30s. We still have challenging times now and I don't necessarily agree with exactly how, to whom, and the conditions (or lack thereof) associated with the first $350B but to have done nothing is unfathomable to me.

The bank bailout was sold in the manner that you describe. However, would all that have really happened? We were told for weeks that if nothing is done by tomorrow, everything was going to fail. Then, it took them two weeks to pass and sign the legislation with no entire system failure. Then, they didn't even spend the entire amount of money. The money they did spend was not spent the way we were told it was going to be spent. The bailout was proposed to be used for the government to buy the "toxic" assets from banks. Instead the bailout was used to buy stock in the banks. The banks still own the "toxic" assets that we so desperately needed to rid them of.

The auto bailout was also a useless waste of money. Those companies should have been allowed to go bankrupt and be broken into smaller, more manageable units. This would cause short-term pain, but long-term security for the remnants of these companies. The government is choosing short-term boosts, at the expense of long-term pain.

The "stimulus" proposed is the same thing. Short-term boosts, long-term pain because of the unintended consequences it will create.

1. Cut Spending to lower the annual deficit. This will allow for lower taxes in the future. When people and corporations expect lower taxes they tend to be more open to expanding instead of protecting the current status quo. This would cause short-term pain, but long-term prosperity. This is the opposite of the current plan (short-term boost and long-term pain). Did you read the article in the "Trillion dollar spending is the road to ruin" thread?

Agree that the Fed needs to tighten it's belt. And I'm looking forward to the results of the "line item budget review" that Obama promised. However, I would not support an across the board "spending moratorium" that some want. If you don't want to kill a patient on life support, you don't pull the oxygen and blood tubes. Further, you need some thing to "jump start" him back to good health.

If you want a patient to recover quicker, you quick pumping them full of morphine that in itself can injure and kill them. Yes, they will feel some short-term pain, but the long-term will be better. Less spending now equals a better future than reckless spending now.

2. Lower taxes for middle income Americans in a way that is permanent. Do not simply give out 2 years worth of a tax cut over 1 quarter. That is not a real tax cut and is only a series of a few tax rebates sent through employers. If tax cuts are permanent, then people can plan to invest/save/spend the extra money in a meaningful way.

Agree. Obama advocated for tax cuts for 95% for middle income Americans and all early indications are this promise will be fulfilled in his stimulate act where early reports say these tax cuts make up a large chunk of the overall package. Disagree on your permanent comment. The Federal government always needs the flexibility to adapt to conditions on the ground. What if America was invaded and we had to fund a War? -- this is an extreme example but the point stands. Further, any "permanent tax cuts" could always be changed anyways. That is how our legislative process and democracy is setup. So while "permanent" might be some courtesy signal to some, it's impractical and would have no real meaning.

What I mean by permanent is that the lower rates should be set in the tax code, until they are changed by Congress at a later date. The "tax cuts" proposed by Obama are set to be for only two years (09, 10). Also, the lessening of the taxes will be paid out over the 1st quarter or 1st half of 2009. This is just a series of rebate checks and not really a tax cut. Rebates don't work to spur growth. Permanent tax cuts do because people can plan their lives around the new rates that are expected to be in place for many years.

3. Do not give tax cuts to people that do not pay any net taxes. This is blatantly unfair and not really a tax cut. It is welfare.

Agreed. I have no problem with this.

Obama's "stimulus" proposal will do just this. You can't give tax cuts to 95% of America without giving people rebates on taxes they never paid because about 40% of Americans don't have any income tax.

[au2004ece 30]

4. Extend the tax cuts passed in 2001. Do not repeal them. This will allow for more money for investing in this time where prices are lower than before.

Do you want to extend them or make them permanent? Would this be in addition to the tax cuts you advocated for the middle class above? I guess the bottom line is what do you think the Fed rate for middle class earners should be? Or what tax structure overall are you advocating for? Some unclear signals in your post.

Make them permanent, meaning don't give them an expiration date. Yes, the tax cuts for middle income people should be in addition to the current rates provided by these tax cuts.

5. Infrastructure: we do need road repair, new roads, etc. This is one of the few things that the federal government should provide. But we should only build the roads that we need, not roads that would just be built to give somebody a job.

Agreed. Obama spoke passionately about this during the campaign and early indicators state these non-sexy projects will be a big part of his stimulus package.

I'll believe it when I see it.

6. Stop all bailouts.

Agree and disagree (see above). Hopefully, "bailout" will prove to be the wrong word. I'm cautiously optimistic that as with Mexico, Chrysler and others, the government will be repaid these "loans" in time and actually make money on their investments.

The role of government does not include giving loans to failing companies. If this were a profitable venture, then somebody in the private sector would have provided them loans many years ago.

7. Quit acting like government is a solution to each person's problems. When government is omnipresent, people think they can rely on it to solve all of their problems. So, government spends more and more money to try to solve these problems. But, each person is the only person that can solve their own problems. If government weren't alway there to take the blame or to act like they are going to give people something for free, then people would get up and go to work on fixing their own lives. Instead, they can just wait until the government sends them their money or does this stimulus or does the next stimulus or bails out this company or gives them free healthcare or makes people be nice to them or tells them that the rich people are going to pay for everything.

Agree - I'm a big fan of self reliance. However, I've said it before and I'll say it again, there are certain things that the private sector either can't or won't do and thus, Government should have an appropriate role. I do not subscribe to the notion that Government is always bad and that any thing they do should be considered a "hand out."

As long as many politicians promise to solve every problem, people will not be self-reliant. Government is not always bad. But, there are a limited number of things that government should do for us. The national government is even more limited because most government functions are to be provided by the state and local governments as provided by the constitution. That way, each small area gets to decide how it is governed instead of having a one size fits all policy eminate from one location. We have lost the ability to control our local lives because of the increasing power of the national government to tax and regulate over us.

As an example, if the people of Montgomery want to provide all of their citizens with free government healthcare, then they should be allowed to provide this using their local government. If the people of Auburn do not, they should not be forced to. Wouldn't this work much better?

[Tigermike 4,240]

I have a valid question. How many of these infrastructure jobs can be maintained over a 4-6 year period? Construction jobs are not "career" structured, and when the work is done, well....it's done. It makes me wonder if there's more to this than meets the eye. 4-6 years would put Obama either in his second term with another recession to hand over, or a peak at the end of his first term prior to a slowdown during his second term.

Either way, infrastructure jobs do not come with a career tag. These jobs are for contractors and hard labor, which have UNION written all over it up north.

Add to that the lag time in those infrastructure jobs being approved and appropriated by the politicians, then the engineering time, the time spent in court taking care of the suits by leftist environmental groups before the work ever starts.

What is the lag time in congress giving the OK and start of construction?

[TigerHeat 9]

I have a valid question. How many of these infrastructure jobs can be maintained over a 4-6 year period? Construction jobs are not "career" structured, and when the work is done, well....it's done. It makes me wonder if there's more to this than meets the eye. 4-6 years would put Obama either in his second term with another recession to hand over, or a peak at the end of his first term prior to a slowdown during his second term.

Either way, infrastructure jobs do not come with a career tag. These jobs are for contractors and hard labor, which have UNION written all over it up north.

Add to that the lag time in those infrastructure jobs being approved and appropriated by the politicians, then the engineering time, the time spent in court taking care of the suits by leftist environmental groups before the work ever starts.

What is the lag time in congress giving the OK and start of construction?

Depends on whether the project will keep illegal aliens out of our country.

[autigeremt 7,537]

I have a valid question. How many of these infrastructure jobs can be maintained over a 4-6 year period? Construction jobs are not "career" structured, and when the work is done, well....it's done. It makes me wonder if there's more to this than meets the eye. 4-6 years would put Obama either in his second term with another recession to hand over, or a peak at the end of his first term prior to a slowdown during his second term.

Either way, infrastructure jobs do not come with a career tag. These jobs are for contractors and hard labor, which have UNION written all over it up north.

Add to that the lag time in those infrastructure jobs being approved and appropriated by the politicians, then the engineering time, the time spent in court taking care of the suits by leftist environmental groups before the work ever starts.

What is the lag time in congress giving the OK and start of construction?

Our Lee County Commision last night was given a "Memo" from the state that was quoted this AM by Judge English. He basically said that Washington wants all pre-engineered, yet not started projects/proposals to be sent up for review, as there will be a lot of money coming down from Washington very soon. Bridge construction, road paving, road creation, water/sewer projects, etc. He also stated "Quick turn around projects" with less than 120 day completion.

SHORT TERM! It looks like a series of short term projects.

[TigerHeat 9]

I have a valid question. How many of these infrastructure jobs can be maintained over a 4-6 year period? Construction jobs are not "career" structured, and when the work is done, well....it's done. It makes me wonder if there's more to this than meets the eye. 4-6 years would put Obama either in his second term with another recession to hand over, or a peak at the end of his first term prior to a slowdown during his second term.

Either way, infrastructure jobs do not come with a career tag. These jobs are for contractors and hard labor, which have UNION written all over it up north.

Add to that the lag time in those infrastructure jobs being approved and appropriated by the politicians, then the engineering time, the time spent in court taking care of the suits by leftist environmental groups before the work ever starts.

What is the lag time in congress giving the OK and start of construction?

Our Lee County Commision last night was given a "Memo" from the state that was quoted this AM by Judge English. He basically said that Washington wants all pre-engineered, yet not started projects/proposals to be sent up for review, as there will be a lot of money coming down from Washington very soon. Bridge construction, road paving, road creation, water/sewer projects, etc. He also stated "Quick turn around projects" with less than 120 day completion.

SHORT TERM! It looks like a series of short term projects.

None of those projects you listed are "quick turnaround". It takes four months to build a single family house. A government contactor would take a year.

[Strychnine 1,812]

Our Lee County Commision last night was given a "Memo" from the state that was quoted this AM by Judge English. He basically said that Washington wants all pre-engineered, yet not started projects/proposals to be sent up for review, as there will be a lot of money coming down from Washington very soon. Bridge construction, road paving, road creation, water/sewer projects, etc. He also stated "Quick turn around projects" with less than 120 day completion.

SHORT TERM! It looks like a series of short term projects.

Washington needs to be sending me some of that money so I can go to flight school.