Obama's new recovery plan

[Harbinger]

WASHINGTON – President Barack Obama outlined new multibillion-dollar stimulus and jobs proposals Tuesday, saying the nation must continue to "spend our way out of this recession" until more Americans are back at work.

Without giving a price tag, Obama proposed a package of new spending for highway, bridge and other infrastructure projects, deeper tax breaks for small businesses and tax incentives to encourage people to make their homes more energy efficient.

By PHILIP ELLIOTT, Associated Press Writer Philip Elliott, Associated Press Writer – 27 mins ago

Full Article:news.yahoo.com/s/ap/20091208/ap_on_bi_ge/us_obama_jobs

[SoulBiter]

Now the govt is going to spend the country out of a recession?

<sigh>

The president's announcement is further proof that TARP has morphed from an emergency injection of liquidity to thaw frozen credit markets into a $700 billion revolving slush fund to promote the Democrats' political, social and economic agenda," said Rep. Jeb Hensarling, R-Texas.

I agree with this statement. To the new Congresscritters on the Democrat side..."Welcome to the slush fund. Belly up to the bar!"

[High Lord Tolkien]

[Worm of Despite]

[sindatur]

They ahven't even spent half of what they've already taken, how can they need more? It's not like they're going to unreserve the unspent money, so they need to spend what they've already taken first, IMHO.

[Seven Words]

I think the idea to spend into recovery is more than a little dicey. However, the listed subjects of the spending (primarily, the bridges and similar infrastructure) is an area in DIRE need of attention. Road budgets are so inadequate that the City of Detroit has actually let some roads return to unpaved.

[Sheol]

What everybody is forgetting is that we as the people are not removed from the problem. When I read that it sounded to me as the royel we. WE need to spend our way out of the problem. If WE spend money that will get the economy back in shape. As mush as people don't like Obama you have to admit that he is not making this up. The economy only survives if people spend money.

[Harbinger]

What everybody is forgetting is that we as the people are not removed from the problem. When I read that it sounded to me as the royel we. WE need to spend our way out of the problem. If WE spend money that will get the economy back in shape. As mush as people don't like Obama you have to admit that he is not making this up. The economy only survives if people spend money.

If WE spend money that will get the economy back in shape.

Absolutely. But we are not the ones spending it in a free market.

As I've repeated Ad Nauseam throughout the tank, when you spend one dollar it becomes five dollars in the "economy." So yes, Obama is right. But tax breaks allow citizens to spend the money directly to businesses that will prosper and hopefully hire new employees. Government bailouts just reward failing companies and much of the money goes to pork.

If George Bush had given tax breaks the size of the first stimulus bill spread out over the last four years of his term, we probably wouldn't be in the shape we are in now. Same amount of money to the Government, but much more money pumped directly into our economy. Money that enters a free market in a fair way and rewards successful companies.

Typo Edit

[ParanoiA]

Well, remember what a recession is, and remember the nature of the business cycle. Spending money to save businesses that should fail is akin to protecting the sick Gazelle from a lion pack with healthy ones...WTF?

Bad investment needs to be purged from the market, and the only spending I've really seen is the blue collar party, democrats, bail out rich people that invested badly. And using fear to do it - a page from GWB's playbook.

This will create yet another bubble, that will burst later. Bad investment will never be rewarded. You can fool observers by manipulating the input and output of a given system - but you can't fool the system.

Credit is too easy and too available - it is an unnatural market condition that only exists because of unnatural rosey risk assessment due in part by the government safety net and fractional reserve banking.

But they'll continue to centrally regulate and never blame the regulator for poor performance - it's always a free market dynamic that took a mile when given an inch...

[Avatar]

Nice to see you around Sheol. Been a while.

Uh, not too sure where I stand on the idea. I thought a whole bunch of money from the last bailout still hadn't been spent?

I do think the goverment can stimulate the economy. I'm not sure giving banks and whatnot vast quatities of money is the best way of doing it.

Tax breaks may be one way. Another might be job creation, as in infrastructure projects...give more people money, (or let them work for it) and they'll spend it. Always thought it helped 'ol Roosevelt out.

If the size of American debt is, (as I suspect ) relatively meaningless, then growing it probably won't make that much difference.

But as I said...giving it to corporations is probably not going to help much.

--A

[Harbinger]

Av, the gov't can absolutely stimulate the economy. War is one example. But individuals rewarding successful companies is far more efficient than the gov't doling out millions to special interests.

[ParanoiA]

Av, the gov't can absolutely stimulate the economy. War is one example. But individuals rewarding successful companies is far more efficient than the gov't doling out millions to special interests.

And more accurate. Our market rewards those that satisfy individuals, and thus, us. If the government has to give someone money, then I have to ask why that someone didn't get it from me, freely. That would suggest a business is being rewarded for an inefficient and bad business model or product.

[Farsailer]

Sustainable private sector jobs are key to any real recovery. I don't think there's a lot of disagreement with that. But ... there's a big but, the source of those jobs is what's at stake here.

Jobs can't be public sector because the government cannot keep spending money on jobs ad infinitum. That money has to come from somewhere and taking more from a shrinking tax base is no way to regenerate that tax base for the long term. No, the emphasis has to be on expanding the private sector, thereby expanding the tax base, thereby allowing the government to more easily obtain the revenues necessary to keep the spending. Government money toward jobs is just wasted money, imo, due the pork inherent in the process.

So the question should be how do we help the private sector start hiring again? The thing to do would be to create an environment that makes it easy for them to add to their payrolls. Do they have that environment today? It's hard to say yes to that due to the uncertainty around financial regulation and credit markets, the uncertainty around health care, the uncertainty around executive compensation, the uncertainty around the new EPA greenhouse gas mandate, the uncertainty around cap and trade, etc. In this environment, it's hard to imagine that any business owners or executives want to stick their necks out.

In the meantime, welcome to the pork party. In which the Dems are determined to spend their way into the midterm elections...