Produce a reliable income stream, not a short-term stimulus

posted at 10:44 am on November 25, 2008 by Ed Morrissey

The problem with having a short attention span is the assumption that everyone else must have one, too.  That’s the kind of thinking that goes into short-term stimulus plans, and the reason they fail.  As John Taylor, former Undersecretary of the Treasury, explains in his Wall Street Journal op-ed, the best stimulus comes from a reliable reduction in tax rates that allow for planning, not impulse shopping:

The argument in favor of these temporary rebate payments was that they would increase consumption, stimulate aggregate demand, and thereby get the economy growing again. What were the results? The chart nearby reveals the answer.

The upper line shows disposable personal income through September. Disposable personal income is what households have left after paying taxes and receiving transfers from the government. The big blip is due to the rebate payments in May through July.

The lower line shows personal consumption expenditures by households. Observe that consumption shows no noticeable increase at the time of the rebate. Hence, by this simple measure, the rebate did little or nothing to stimulate consumption, overall aggregate demand, or the economy.

These results may seem surprising, but they are not. They correspond very closely to what basic economic theory tells us. According to the permanent-income theory of Milton Friedman, or the life-cycle theory of Franco Modigliani, temporary increases in income will not lead to significant increases in consumption. However, if increases are longer-term, as in the case of permanent tax cut, then consumption is increased, and by a significant amount.

Common sense?  Only to those who have to actually plan and live on budgets.  A $600 rebate check — which consists of nothing more than a one-time return of our own money — will not allow taxpayers to buy a new car or even a new appliance, because we can’t rely on that revenue stream.  We know that the check is a one-off, and we treat it like found money.  Most will pay bills, and some will put the money aside for security.  Even those who spend it won’t spend enough in consumption to make a difference in a large-scale economy such as ours — not with a one-time rebate.

In order to encourage consumption and thereby strengthen the economy, people need to know exactly where they stand month to month.  They need to know that any extra revenue will be reliable and plannable, not drop out of the sky once with no guarantee of return.  The car they couldn’t afford before that rebate will still be unafforable afterwards, and the investments they want to make will still be outside their reach.

Advocates point to the success of the 2001 tax rebates, but Taylor points out that they had another quality absent from this last round: permanence.  The 2001 rebates intended to apply the first round of Bush tax cuts as a retroactive measure, refunding the difference.  It allowed taxpayers to see how much more of their own money they would get to keep, and to plan new spending based on those consistent, reliable numbers.  Not only did the 2008 stimulus lack that, but most people expect their taxes to go up, not down, in the midst of this financial crisis.

The economic collapse we are experiencing is far too great to get stopped by a temporary gesture like a one-time tax rebate.  The only way to rebuild confidence and restart consumer spending is to restructure tax rates to encourage that by reducing the confiscation of their earnings in a predictable and plannable manner.  Unfortunately, the incoming Obama administration appears as fond of gimmickry as the Bush administration and the Democratic Congress has been over the last year.


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Unfortunately, the incoming Obama administration appears as fond of gimmickry as the Bush administration and the Democratic Congress has been over the last year.

Buy some gold.

JiangxiDad on November 25, 2008 at 10:47 AM

Who could possibly think that confiscating money from producers next year and giving it to non-producers today would have a permanent impact on the economy.

Liberals, that’s who.

notagool on November 25, 2008 at 10:54 AM

Well how much of a reduction in taxes would be necessary to provide the sort of benefit they speak of?

Sure any old reduction allows planning of that extra income, but what good is it if a family making $150,000 saves $200 a year or something. They can plan that all the way to their retirement and wind up with a whopping couple grand.

If anything, its the consumption economy as the be all end all engine of the economy that needs some time under the microscope. Can such an economy stimulate the unending growth necessary to make it work long term? Can a “lost decade” like Japan’s actually be GOOD for the individual here, sparking a rush to pay off debt and increase savings? (very few japanese even have credit cards at this point)

Cutting taxes/interest rates to spur consumption has a nasty unintended consequence of overheating the debt loads of both individuals and corporations. Im not saying some rethought equation can’t still make tax cuts work long term…but knowing the consequences of our actions (which include more than dems encouraging bad home loans…sorry) is this really the best we can come up with?

ernesto on November 25, 2008 at 10:56 AM

Again, we don’t need to be focusing on consumer spending or confidence. We need to focus on production. We need to get manufacturing back and we’ll do it through slashing spending, slashing taxes and slashing regulation.

The British Empire was the foremost industrial power and they ruled the world. In 1895 the US became the #1 industrial power and they had a go at being superpower. Now that China has the biggest industrial might, they will be the next superpower and so the cycle will continue.

lodge on November 25, 2008 at 10:56 AM

Gubbermint make work always ends at the same place, the unemployment line. Just ask FDR how.

Reject Obamunism in all it’s forms.

tarpon on November 25, 2008 at 10:56 AM

Who could possibly think that confiscating money from producers next year and giving it to non-producers today would have a permanent impact on the economy.

great idea for a book

/sarc

JiangxiDad on November 25, 2008 at 10:57 AM

Unfortunately, the incoming Obama administration appears as fond of gimmickry as the Bush administration and the Democratic Congress has been over the last year.
Buy some gold.

JiangxiDad on November 25, 2008 at 10:47 AM

Buy a good bow and lots of arrows…..

Rovin on November 25, 2008 at 10:58 AM

We need to get manufacturing back and we’ll do it through slashing spending, slashing taxes and slashing regulation.

I think we could, but we won’t.

As for China, they’ll have another day in the sun, but the die is cast for them too. Even the Tibetan Buddhists can tweak the giant’s nose now with little fear. In the very seeds of their success are also planted the seeds of their destruction. And so the cycle will continue.

JiangxiDad on November 25, 2008 at 11:00 AM

Buy a good bow and lots of arrows…..

Rovin on November 25, 2008 at 10:58 AM

Aren’t wooden arrows subsidized now?

Tacitus_SGL on November 25, 2008 at 11:01 AM

Buy a good bow and lots of arrows…..

Rovin on November 25, 2008 at 10:58 AM

Yes, that and some other forms of insurance are a good idea.

I have heard several times, although am not sure if it is true, that Swiss citizens must own a gun and be trained in the use of firearms. If it’s not true, it should be.

JiangxiDad on November 25, 2008 at 11:03 AM

This whole bailout thing sure smells fishey to me. The way I see it, the government wanted an “ownership society” for many ghetto dwellers, so they forced Fannie and Freddie to support foolish loans.

Also, they encouraged working people to buy as big a house as could be acquired, leaving the buyer thinking the value would only go up, and assured the buyer he could use his new found bubble equity as colateral for even more loans.

That kind of mentality is how the government handled finances, so why not indiveduals. Leverage, leverage, leverage.

So the stupid plan to fix the stupid problem is to soak the taxpayers. Whuda thought.

It’s not nice to fool “Mother Market”.

saiga on November 25, 2008 at 11:04 AM

give a man a fish, he eats for today…you know the rest.

This is a power move by Democrats, like Caesar throwing a hundred days of gladiator games. You only need to glance-not even analyze-the “impact” of last years stimulus checks to see it won’t work.

hippie_chucker on November 25, 2008 at 11:04 AM

I spent my last check on beer and cigarettes. Can’t wait for my next check. I’ll probably add lottery tickets to my shopping list.

Mr_Magoo on November 25, 2008 at 11:05 AM

“In the very seeds of their success are also planted the seeds of their destruction”

Wise words.

Pride goeth before the fall.

Never has anyone been so positioned for a fall as the fool Obamy. Pray the country is not ruined first.

notagool on November 25, 2008 at 11:05 AM

That data is wrong because it only looks at U.S. consumption. I spent my rebate in Costa Rica.

If get another one this year? Peru, baby!

Kasper Hauser on November 25, 2008 at 11:07 AM

I’ve said this before; a stimulus check is a wellfare check.

If you don’t need the money, the donate it directly to a worthy congressional challenger who will fight against this massive govt spending. Make it known exactly where the money you are donating came from and what you expect the person to do if they reach office. YouTube videos would be good also.

BadgerHawk on November 25, 2008 at 11:07 AM

We need to get manufacturing back and we’ll do it through slashing spending, slashing taxes and slashing regulation.

Wait what? I fail to see how these things lead to a manufacturing base magically appearing. Slash regulation and taxes all you want…the standard of living is still high enough here to keep the most low wage lowest common demoninator massive economy of scale manufacturing out of the united states. Corporate taxes can stand to be alot lower…but at what point do we realize that all regulation is not bad regulation…that some regulation keeps markets competitive by preventing monopolies…or keeps our kids safe by taking lead out of paint (now if they’d only do that for solder…)…or keeps our internet free forever (net neutrality)…

its just silly to think that everything you’ve been harping on for years (and implementing i might add) will magically solve every ill as it arrives.

ernesto on November 25, 2008 at 11:07 AM

ernesto on November 25, 2008 at 10:56 AM

Lost decades are not good. Every time I’m back in Japan (like last week), I notice it’s just like it was when I lived there 15 years ago, just decayed and covered with more grafitti.

DarkCurrent on November 25, 2008 at 11:07 AM

Common sense? Only to those who have to actually plan and live on budgets.

Well, that eliminates the government!

Mr_Magoo on November 25, 2008 at 11:07 AM

The best taxes to remove

Are the regulatory ones:

The agins: – against drilling, against nuclear, etc

The shalts: – CAFE, FASB 157, etc

The myways: -on social security, on medical care, etc

The cost of removing these is essentially zero; the benefits enormous.

Paul Murphy on November 25, 2008 at 11:07 AM

DarkCurrent on November 25, 2008 at 11:07 AM

It beats creating new crises from every bailout…every little experiment in goading the golden goose to lay another goddamn egg. Thats what we’re doing here, begging our uberconsumer god to please please give us what we used to have back. PLEASE give us our mcmansions and our store credit cards with 20 percent APR…

that way is a dead end. ill take the lost decade over a depression caused by our unwillingess to realize the era of uberconsumption on the back of cheap cheap debt is over.

ernesto on November 25, 2008 at 11:10 AM

I bought an iPhone with my 600 dollars, 3 iPhones later and an extended warranty later, Apple refuses to service their shoddy piece of equipment

James on November 25, 2008 at 11:10 AM

US consumption is all we care about.

bloghooligan on November 25, 2008 at 11:11 AM

Paul Murphy on November 25, 2008 at 11:07 AM

The cost of removing social security taxes is zero? i must be missing something.

ernesto on November 25, 2008 at 11:11 AM

Hey, I’d be happy to take back some of my own money right now. Yes, last time we got money back, I paid off debt, but with it being this close to Christmas, I would spend it.

They churn out Billions to banks on a dime. How soon could they return some of my own money to me?

Oink on November 25, 2008 at 11:12 AM

ernesto on November 25, 2008 at 11:07 AM

While you are right, not all regulation is bad, for a long time now we have been INCREASING regulation, spending, and taxes, not the other way around. For instance, Sarbanes-Oxley might be the biggest burden on public corporations in the history of corporations. It is a waste of time, money, and human resources and far outweighs the benefit.

Yes, decreasing corporate taxes, regulation (such as SOX), and spending will help everybody, including the lowest working class.

ConservativeLawStudent on November 25, 2008 at 11:13 AM

We know that the check is a one-off, and we treat it like found money. Most will pay bills, and some will put the money aside for security. Even those who spend it won’t spend enough in consumption to make a difference in a large-scale economy such as ours — not with a one-time rebate.—————-Cap’n Crunch Ed

My crystal ball tells me that a vast proportion of that money will be spent on things that used to be considered luxury items. If a large percentage of said stimulus money is spent at Wal-Mart, why not call it a jobs program for China?

Individuals and the U.S. Government need to learn not to spend money that they do not have.

hillbillyjim on November 25, 2008 at 11:13 AM

I’d like to know how many people had their rebate checks never even delivered to them, because the government automatically applied those amounts to taxes that people were paying.

So nice of the government to demonstrate once again that even though some might like to use that money on something else, they clearly know better than you.

MadisonConservative on November 25, 2008 at 11:14 AM

Anyone else getting the feeling that Atlas is about to Shrug?

Long Live the Producers…Let the Looters take care of themselves….

BiasedGirl on November 25, 2008 at 11:15 AM

ernesto on November 25, 2008 at 11:07 AM

Manufacturing jobs pay less than service sector and government make-work jobs, sure. But these service sector jobs can’t last. Japan manufactures a lot of stuff and they have a high standard of living.

In the 1950s we manufactured a lot and had a high standard of living. This idea that manufacturing goods can only be done by kids at slave wages is nonsense.

lodge on November 25, 2008 at 11:17 AM

[lodge on November 25, 2008 at 10:56 AM]

Agreed. People will spend if they believe they also have a reliable income.

Dusty on November 25, 2008 at 11:18 AM

ernesto on November 25, 2008 at 11:10 AM

I’ll take a mcmansion over the typical Japanese living space any day. Have you spent much time in Japan?

That said, I think we seem to agree that consumption should not be based on over-leveraged credit. My point is only that Japan is not a model for recovery.

DarkCurrent on November 25, 2008 at 11:19 AM

I think that many people are finding out how much money they “piss” away. (Ed said that word in front of MOM! on last week’s EMS)

I’m faced with a layoff (which will give me more time for my blog) and have already cut MY expenses, but they in turn hurt others in the service industry (lawn maintenance and housekeeping). I’m re-evaluating my utilities, watching water consumption, electrical use and the necessity of a home phone. Total estimated savings: $4,000 per year If I don’t get downsized, that will be like getting a 7% raise.

There IS money out there and we have it.

originalpechanga on November 25, 2008 at 11:20 AM

ConservativeLawStudent on November 25, 2008 at 11:13 AM

Indeed, SOX is a serious waste of paper, brainpower, and money. An upper management friend of mine tried sitting me down and explaining it to me one night, over a huge bowl of herbage. Lets just say, given our “open minds” we still couldnt understand why anyone would go about things in such a way.

Honestly, one of the easiest ways for republicans to a) do the right thing and b) do it in a broadly bipartisan way is to push for a 10% cut in the corporate tax rate. Charlie Rangel himself has gone on record advocating such a move…it would be a great way to temper early nerves and animosity…build working relationships with democrat leaders on appropriations…and show the american people you arent the sour grapes spoilers the dems were.

ernesto on November 25, 2008 at 11:20 AM

We need to get manufacturing back and we’ll do it through slashing spending, slashing taxes and slashing regulation.

Globalization is here to stay. Companies benefit by building in other countries through lower tax rates and good will with foreign govts. Lower tax rates here would help but not necessarily return big manufacturing. Promoting small business manufacturing is a good idea though through govt incentives.

Unions don’t help here. They are no longer necessary in most states with the transparency that exists through technology and worker integrity. They served their purpose during the first 60 years of the century but are only a drain now due to greedy and power hungry union execs.

Union retirement benefits were set up when people lived to bt 65 if they were lucky. Heard a retired auto worker on talk radio the other day sat he gets over 3 grand a month plus his SSI plus medical benefits. Another guy called in and he worked for the auto industry 26 years and has been collecting since age 55. He’s 87 and still collecting.

Mr_Magoo on November 25, 2008 at 11:20 AM

DarkCurrent on November 25, 2008 at 11:19 AM

Im not saying it is either…but it is often thrown around as a model of how these crises pan out. And given the other models that have been thrown around (depression, hyperinflation, collapse, etc) ill take a lost decade any day. Thats not to say there isnt a way out of all this that works well…but that doesnt mean that all we have to do is cut taxes and regulation and everything goes away either.

ernesto on November 25, 2008 at 11:23 AM

Anyone else getting the feeling that Atlas is about to Shrug?

Long Live the Producers…Let the Looters take care of themselves….

BiasedGirl on November 25, 2008 at 11:15 AM

True, some of us know the end of this story. But somehow that only makes it worse.

JiangxiDad on November 25, 2008 at 11:24 AM

MadisonConservative on November 25, 2008 at 11:14 AM

I got my last stimulus check and tossed it straight at the mortgage.

BadgerHawk on November 25, 2008 at 11:25 AM

Who could possibly think that confiscating money from producers next year and giving it to non-producers today would have a permanent impact on the economy.

Liberals, that’s who.

And President Bush. Oh, wait….

angelat0763 on November 25, 2008 at 11:26 AM

You know that first stimulus check….

It’s still in the bank. I never spent it.

Does that make me a bad person?

Kini on November 25, 2008 at 11:28 AM

Kini on November 25, 2008 at 11:28 AM

It makes you a rational actor. Rational actors don’t spend needlessly. You didnt need to spend, so you saved. The fact that saving could be considered a dirty word in this economy speaks volumes…

ernesto on November 25, 2008 at 11:30 AM

a vast proportion of that money will be spent on things that used to be considered luxury items. If a large percentage of said stimulus money is spent at Wal-Mart, why not call it a jobs program for China?

Excellent deduction. How about a “Made In America” store and the rebate has to be spent there…

Mr_Magoo on November 25, 2008 at 11:30 AM

ernesto on November 25, 2008 at 11:23 AM

Tax cuts and rational deregulation can only help, especially in a culture as innovative and prone to consumption as the US.

I’m open to a better idea if you’ve got one.

DarkCurrent on November 25, 2008 at 11:31 AM

How about a “Made In America” store and the rebate has to be spent there…

dirty nativist.

JiangxiDad on November 25, 2008 at 11:32 AM

Unions don’t help here. They are no longer necessary in most states with the transparency that exists through technology and worker integrity. They served their purpose during the first 60 years of the century but are only a drain now due to greedy and power hungry union execs.

Yahtzee.

Whether you are a Democrat, Republican, or otherwise, please let your congressmen know that you do not support card check. This could be a game-changer, and not for the good of the Republic. The basic mechanism enshrined in card check is anathema to everything we hold dear.

hillbillyjim on November 25, 2008 at 11:35 AM

Banking industry conspiracy?

Banking lobbyists “convince” legislators to allow credit card and auto loan interest to be deducted on personal income taxes.

Consumer builds up massive amounts or personal debt figuring at least it’s deductible.

Legislators remove deductions.

Consumers hosed (again). Banks live of finance charges while consumers can never pay off credit cards and have to finance autos for 6, 7, + years to afford autos.

Mr_Magoo on November 25, 2008 at 11:36 AM

You know that first stimulus check….

It’s still in the bank. I never spent it.

Does that make me a bad person?

Kini on November 25, 2008 at 11:28 AM

That makes you a self-preservationist. You bastard.

That also makes you wise.

hillbillyjim on November 25, 2008 at 11:37 AM

Mr_Magoo on November 25, 2008 at 11:30 AM

Why not go a step further and simply ban foreign trade?

DarkCurrent on November 25, 2008 at 11:37 AM

I didn’t get a #@!*&^$*@! rebate last time and I probably won’t get one if the feds try it again.

That being said, I do my part to keep the economy going by gobbling up ammunition and tac accessories on a weekly basis.

I think Bushmaster™ has me on their Gold Club list right about now.

Bishop on November 25, 2008 at 11:39 AM

DarkCurrent on November 25, 2008 at 11:31 AM

I wish i did. For now though, id be glad to work out the differences between rational and irrational deregulation…seeing as so many republicans fail to see the difference.

ernesto on November 25, 2008 at 11:41 AM

Don’t they learn from West Wing?

CHARLIE
It’s not. Why did you call it a rebate?

LEO
So people would spend it. If they thought it was an advance, they might save it.

CHARLIE
It was an advance.

LEO
Did you spend it?

CHARLIE
I paid my VISA bill.

LEO
We would have preferred it if you ate in a restaurant or traveled.

Phoenician on November 25, 2008 at 11:43 AM

I’m in favor of eliminating huge chunks of our federal government in exchange for lower taxes. No tax cuts, just a reduction in the burden on us imposed by the State.

I’d start in the Dept. of Ed, and work my way out.

Here’s a fun graph of our future….

http://en.wikipedia.org/wiki/Image:Debt_to_GDP_Forecast_Chart.png

Hey, I can dream, right?

hippie_chucker on November 25, 2008 at 11:49 AM

The liberal political elites have always worshiped the European Union and its Brussels politburo. That’s what they want for the U.S.

They no longer even GLANCE at the Constitution. They put in judges who no longer even GLANCE at the Constitution. They elect a President who called the Constitution FLAWED.

They want to be at the top of the power heap, preaching to us peons. Riding their $32,000/hour flying machines and 10-ton limos, while telling the rest of us to ride bicycles and tin-can mini-cars (again, like Europeans).

The problem is: EUROPE IS A COMPLETE CLUSTER. They are DYING, while the immigrants/isslamists take over through population growth.

Their healthcare is rationed and the elites, of course, fly off for their own care instead of waiting in line.

People: we need an American Revolution II. If we do it soon, it can be non-violent. If we wait? No promises.

Let’s roll.

ex-Democrat on November 25, 2008 at 11:50 AM

Why not go a step further and simply ban foreign trade?

DarkCurrent on November 25, 2008 at 11:37 AM

Now that would be silly. I think the original “deduction” from hillbillyjim (which I thought was kind of funny) was that what the gov’t thinks is a US stimulus results in a China stimulus because most items, even those that used to be considered luxury items like TVs, are now made in China.

Of course, that’s somewhat of a generalization because even items bought from China in WalMart produce jobs for people here.

Mr_Magoo on November 25, 2008 at 11:50 AM

Before the recent troubles, China was likely to get old before they can get rich. A lost decade hurts Chinas prospects for economic dominance. It is too late to undo their one-child policy.

Right_of_Attila on November 25, 2008 at 11:53 AM

Mr_Magoo on November 25, 2008 at 11:50 AM

Those items are made in China because that’s where they can be produced at lowest cost to consumers. They used to be considered luxury items precisely because they were produced in the US or other highly developed countries.

Should US consumers pay much higher prices just so the money circulates only with the borders? I say no. In addition to helping American consumers, the current system also pulls China deeper into capitalism.

DarkCurrent on November 25, 2008 at 12:06 PM

Everyone loves free money. The problem with these worthless rebates and the half baked tax reductions is THESE THINGS ONLY WORK AND HELP OUT AMERICA IF YOU CUT OUR OUT OF CONTROL SPENDING AT THE SAME TIME!!.

People love saying, “Hey all they are doing is giving us our hard earned money back!” Newsflash people. NO THEY AREN’T! When the FED has to take another loan to give us that rebate check, it shows our “hard earned money” was spent long ago.

The only way proven in recent history to cut spending was a line item veto. That’s why more now than ever, we need to give it back to the president.

BigRichardSmall on November 25, 2008 at 12:11 PM

By my math, $700B, divided by the 304 Million people in the US, comes out to around $2,300 for every man woman and child in the US.

If they’re giving out checks, they should just give them straight to us, and not spend it on gov’t projects, half of which will never happen, and more than half the money for ends up in bureaucrats’ pockets.

But we don’t need another stimulus. We just need the government to get out of the way. Stop taking our money, and you don’t HAVE to give it back.

hawksruleva on November 25, 2008 at 12:16 PM

Before the recent troubles, China was likely to get old before they can get rich. A lost decade hurts Chinas prospects for economic dominance. It is too late to undo their one-child policy.

Right_of_Attila on November 25, 2008 at 11:53 AM

Correct. China’s already a lot older than it is rich, and that will only accelerate in years and decades to come.

I remember when I lived in Japan 20 years ago the common view was that Japan was going to dominate the 21st century. Now it looks like they’ll be needing robots to change the old folk’s diapers by 2040. (I think this may be part of the Japanese facination with robots)

DarkCurrent on November 25, 2008 at 12:16 PM

Of course, that’s somewhat of a generalization because even items bought from China in WalMart produce jobs for people here.

Of course. Mostly low-paying jobs, but jobs nonetheless. Clerks, stockers, truck-drivers, warehouse workers–all necessary and productive jobs, but….

There must be a better way to stimulate the economy besides skimming the goo off of China’s gravy.

hillbillyjim on November 25, 2008 at 12:19 PM

One of the 2 things I agree with Mort Kondracke on. We need to change the mark to market rules.

hawksruleva on November 25, 2008 at 12:23 PM

hillbillyjim on November 25, 2008 at 12:19 PM

Hillbilly, having seen the gravy I can tell you the goo’s better eating.

DarkCurrent on November 25, 2008 at 12:28 PM

Should US consumers pay much higher prices just so the money circulates only with the borders?

DarkCurrent on November 25, 2008 at 12:06 PM

Of course not. But you must also ask, should the government be in the business of redistributing wealth with the likely outcome a boon for Chinese manufacturing and a tenuous IV infusion for low-skill American jobs?

What happens to these positions when the stimulus money runs its course?

hillbillyjim on November 25, 2008 at 12:28 PM

I agree about doing away with Sarbanes/Oxley and mark-to-markets rules. I also wish there were more discussion of ideas like that of Dennis Prager: Allow tax-free withdrawals from retirement accounts IF the funds are used to buy up at-risk real estate.

TedInATL on November 25, 2008 at 12:29 PM

We need to change the mark to market rules.

That’s just rearranging the deck chairs on the titanic. You can’t fix an economy with a rule change

lodge on November 25, 2008 at 12:31 PM

Hillbilly, having seen the gravy I can tell you the goo’s better eating.

DarkCurrent on November 25, 2008 at 12:28 PM

I’d much rather have my own gravy.

hillbillyjim on November 25, 2008 at 12:32 PM

Lou Dobbs was the guest this morning Imus and Lou were discussing Larry Summers…CHANGE? Who is the smartest guys in the room now?

http://imustimes.wordpress.com/2008/11/25/imus-fat-larry-summers/

Dr Evil on November 25, 2008 at 12:36 PM

Of course not. But you must also ask, should the government be in the business of redistributing wealth with the likely outcome a boon for Chinese manufacturing and a tenuous IV infusion for low-skill American jobs?

What happens to these positions when the stimulus money runs its course?

hillbillyjim on November 25, 2008 at 12:28 PM

No, the government should NOT be involved in redistribtion of wealth. Tax cuts, particularly capital gains and for the highest earners are the way to promote real, sustainted stimulus. I think we agree on both the tax and trade points.

DarkCurrent on November 25, 2008 at 12:37 PM

I think we agree on both the tax and trade points.

DarkCurrent on November 25, 2008 at 12:37 PM

Yes. I would venture to speculate that we also agree on the need to restrain, then reverse, the growth of Big Brother the federal government. Therein lies real progress.

hillbillyjim on November 25, 2008 at 12:41 PM

hillbillyjim on November 25, 2008 at 12:41 PM

Indeed. As an example, my spelling in the above post reflects the quality of a government education. We don’t need more of that.

DarkCurrent on November 25, 2008 at 12:47 PM

Why not go a step further and simply ban foreign trade?

DarkCurrent on November 25, 2008 at 11:37 AM

Such logic. That would be real good for our Country. The Libs know this though. They won’t go for that. How would they get their payoffs? Great idea and I have said that too! Wonder how much pork they will start taking when the Dictator takes office? I would like to know so I can keep on their greedy asses! I have been flooding them lately with a bunch of complaints. I won’t stop now.

sheebe on November 25, 2008 at 12:53 PM

sheebe on November 25, 2008 at 12:53 PM

I think my sarcastic comment was misunderstood, or I’m not following your logic.

DarkCurrent on November 25, 2008 at 1:01 PM

I still think this is pretty simple. In order to compete for jobs on the world stage, while maintaining our relatively higher income, we have to have a lower tax and regulation burden for corporations. There is no snazzy magical way to fix our economy. There is only reducing costs to business.
Part of this is, of course, reducing the financial burden of government through cutting inefficient, unnecessary, and unconstitutional government programs. Unfortunately, regardless of reason, or law, we are moving in the other direction, and I see no signs that there is a turn about on the horizon.

aelhues on November 25, 2008 at 1:09 PM

aelhues on November 25, 2008 at 1:09 PM

Aelhues 2012!

DarkCurrent on November 25, 2008 at 1:26 PM

In the natural order of things, down-sizing is a predictable occurrence that corrects an imbalanced situation.

Peer into the Looking Glass and you see our bloated government doing the exact opposite.

hillbillyjim on November 25, 2008 at 1:38 PM

Hah!!Thanks DarkCurrent, but I doubt I’d vote for myself….I’m not qualified.

On another note, anyone wonder why we don’t have some of the really cool cars that are fun to drive, and get great gas mileage like the Ford Mondeo? Stupid regulation, that’s why. And no, I’m not saying that all regulation is bad, but we should err on the side of less, not more.

aelhues on November 25, 2008 at 1:38 PM

I didn’t get a stimulus check last time & bambi for sure will never give me one because my husband & i work, save & invest. we’re the ones he wants to screw.

kelley in virginia on November 25, 2008 at 1:56 PM

There is a big problem with equating consumption to economic health. If we are borrowing money to buy consumer goods, then we are reducing the resources that go into increasing our production.
Marginal tax rate cuts can help a lot, especially if you are high up the Laugher curve. But that is only part of what really needs to be done, which is to motivate people to produce more. Get rid of the minimum wage, let union dominated businesses die, and stop paying people not to work.
It can’t be all bliss. If there is no pain, there will be no improvement.

Count to 10 on November 25, 2008 at 3:07 PM

You know that first stimulus check….

It’s still in the bank. I never spent it.

Does that make me a bad person?

Kini on November 25, 2008 at 11:28 AM

That’s where mine went.

Dasher on November 25, 2008 at 3:19 PM

Obama plans on extending and tweaking tax credits. He calls his plan a series of tax cuts, but that’s the politician talking. Most of the tax credits in the code become phased out for married couples making over $150,000. Broad based tax reform is needed. I am alarmed at the politics of economics; as Rs and Ds fight over income taxes, our elected officials continue to levy higher taxes on our basic needs. More and more, I’m feeling like Thomas Sowell, who said, “Does anyone else feel like you’re at a restaurant and can’t get anyone’s attention?”

budorob on November 26, 2008 at 9:13 AM