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Author Topic: Spending Plans Fail - What Congress gives to some it takes away from others.  (Read 1992 times)
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WhiskeyGirl
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« on: November 14, 2008, 12:34:52 PM »

Why Spending Stimulus Plans Fail

What Congress gives to some it takes away from others.

Quote
Congressional Democrats are now demanding another economic stimulus package to "inject" as much as $300 billion into the economy. The package will fail -- just like last year's $333 billion in emergency spending and $150 billion in tax rebates failed. There's a simple reason why.

Government stimulus bills are based on the idea that feeding new money into the economy will increase demand, and thus production. But where does government get this money? Congress doesn't have its own stash. Every dollar it injects into the economy must first be taxed or borrowed out of the economy. No new spending power is created. It's merely redistributed from one group of people to another.

Of course, advocates of stimulus respond that redistributing money from "savers" to "spenders" will lead to additional spending. That assumes that savers store spare cash in their mattresses, thereby removing it from the economy. In reality, nearly all Americans either invest their savings (where it finances business investment) or deposit it in banks (which quickly lend it to others to spend). The money gets spent whether it is initially consumed or saved.

Quote
And, especially in this era, when "our crumbling infrastructure" seems to have become the new mantra, legislators and lobbyists tout a 2002 Department of Transportation (DOT) study that they believe proves that every $1 billion spent on highways adds 47,576 new jobs to the economy.

The problem is that the study doesn't actually make that claim. It stated that spending $1 billion on highways would require 47,576 workers (or more precisely, would require 26,524 workers, who then spend their income elsewhere, supporting an additional 21,052 workers). But before the government can spend $1 billion hiring road builders and purchasing asphalt, it must first tax or borrow $1 billion from other sectors of the economy, which then lose a similar number of jobs.

read the rest here -
http://online.wsj.com/article/SB122663413095027641.html

Why not just give everyone who pays taxes $1,000,000 to help stimulate the economy?  buy a new car?  Buy a house?  

Trickle-up theory at work?  Why continue with the "trickledown theory" that so many have spoken against?
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nonesuche
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« Reply #1 on: November 16, 2008, 12:10:04 PM »

Here goes Pelosi, she can't wait to shove this down the taxpayer's throats if she can.

GM is doing just what some of the banks did, create pandemonium. If any bailout is given to Detroit's automakers it should REQUIRE reorganization, renegotiation of union contracts, and clear product development on a fixed and firm timeline to become competitive with the imports.

http://money.cnn.com/2008/11/15/news/companies/automakers_bailout_congress.ap/index.htm?postversion=2008111521
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MuffyBee
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« Reply #2 on: November 16, 2008, 12:16:59 PM »

Here goes Pelosi, she can't wait to shove this down the taxpayer's throats if she can.

GM is doing just what some of the banks did, create pandemonium. If any bailout is given to Detroit's automakers it should REQUIRE reorganization, renegotiation of union contracts, and clear product development on a fixed and firm timeline to become competitive with the imports.

http://money.cnn.com/2008/11/15/news/companies/automakers_bailout_congress.ap/index.htm?postversion=2008111521

Yes, nonesuche!
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nonesuche
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« Reply #3 on: November 16, 2008, 12:27:38 PM »

Congress allowed many of our major airlines to go into Chapter 11, why were they any different than GM? Pelosi will tack on enough pork barrel to any bail-out for Detroit to effectively pay back for any and all favors done for her team (Obama) in this last election.
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WhiskeyGirl
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« Reply #4 on: November 16, 2008, 05:53:23 PM »

Congress allowed many of our major airlines to go into Chapter 11, why were they any different than GM? Pelosi will tack on enough pork barrel to any bail-out for Detroit to effectively pay back for any and all favors done for her team (Obama) in this last election.

Social Security, Medicare, and Medicare are still on track for a final train wreck.  No plans in Congress that I've seen to put them on sound footing.  However, Congress plans to bailout the UAW health care fund to ensure that it is sound until 2080.

Why not roll everyone in the same QUALITY health program?  Aren't all American's valuable to the Obama team?

Why not roll the program for UAW and the plan available to members of Congress and their families into the plan proposed by Obama for the rest of Americans? 

Why are some above the Obama health care plan for?  Why are some beyond the reaches of the Obama campaign promises?

Healthcare for some, and sh_t for the rest?

jmho
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It doesn't do any good to hate anyone,
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