Obama's Stimulus Plan

Solid Snake · 01-05-2009, 02:35 PM

http://www.msnbc.msn.com/id/28503322/

So Obama's stimulus plan appears to include a $300 billion tax cut.

I mean, really? One of the reasons I voted for Obama was I thought he wouldn't obsess over tax cuts like Bush did at a time when the federal government is just spending too much to afford tax cuts. These tax cuts include over $100 billion for businesses, $1000 tax breaks for couples and $500 for individuals.

I mean, hold up a second. First, in recessions, tax cuts tend to be fairly useless in terms of encouraging spending because most Americans get their tax cuts and immediately stuff it into their savings accounts. Very few Americans will receive tax cuts now and go "Great! Let's go buy that new flat-screen TV I wanted!" Of course the sheer fact that this is being compared to Bush's '08 measures has me in a bit of a funk. I wonder how hardcore Obama supporters are going to defend Obama using the same tactics that they decried with Bush a year earlier?

The bottom line is: I think this is a terrible idea. The government needs to jump-start the economy by reversing Bush's tax cuts, bulking up on its own access to funds necessary to handle its own debt, and begin massive federal programs in regards to upgrading our infrastructure and affording new alternative energy solutions that could create all the jobs and all the new sources of income we need. The last thing we need to do is pretend that more tax cuts to individuals and businesses is the solution. As Obama doubtlessly plans on increasing federal spending, where's the money he's going to spend going to come from?

Oy. Democrats, Republicans, there really isn't much a difference, is there?

Marelo · 01-05-2009, 02:42 PM

Just going to nitpick at one point of yours: Putting the money in a bank account is pretty much the same as spending it. The banks don't just put your money in a box and wait around for you to come pick it up again; they loan it out to people and make business investments with it.

Solid Snake · 01-05-2009, 02:47 PM

Quote:

Originally Posted by Runswithnopants

Just going to nitpick at one point of yours: Putting the money in a bank account is pretty much the same as spending it. The banks don't just put your money in a box and wait around for you to come pick it up again; they loan it out to people and make business investments with it.

http://www.elliottwave.com/freeupdat...ding-Hand.aspx
http://news.yahoo.com/s/ap/20081222/...ltdown_secrets

Everything I've read about the banking industry right now seems to suggest that banks are lending less and less money, even in light of the recent bailouts. So I'm not sure if putting our money in savings accounts is really stimulating the economy nearly as much as direct purchases from individual consumers would.

EDIT: One more for your perusal:
http://www.nytimes.com/2008/10/25/bu...gg&exprod=digg

Aanaren · 01-05-2009, 02:53 PM

Obama ran on a tax cut for people making under a certain amount (between $200,000 - $250,000 per year) while letting the Bush tax cuts expire for the "rich" who are making over that amount. I don't see a mention in the article that he's re-canted on the Bush cuts, so the higher tax revenue from those who had been receiving a tax break from the Bush economic plan should make up some of that. It doesn't seem much different from the plan he ran on, tax-wise.

Marelo · 01-05-2009, 02:53 PM

Well, other than that (well-quashed) point, I had nothing to add.

I really don't see why he is doing this... Though, I wonder if those tax cuts have any other restrictions on them, like income or dependents. It would make a lot more sense if it were only for the less strained tax brackets.

Edit: Ninja'd.

Solid Snake · 01-05-2009, 03:00 PM

Quote:

Originally Posted by Aanaren

Obama ran on a tax cut for people making under a certain amount (between $200,000 - $250,000 per year) while letting the Bush tax cuts expire for the "rich" who are making over that amount. I don't see a mention in the article that he's re-canted on the Bush cuts, so the higher tax revenue from those who had been receiving a tax break from the Bush economic plan should make up some of that. It doesn't seem much different from the plan he ran on, tax-wise.

I guess I always assumed Obama would be smart enough to realize that he's going to need to not cut taxes so the federal government of the United States of America can actually afford all the infinitely more important and very expensive alternative energy and infrastructure improvement and federal employment programs he's trying to jump start.

It's just a strange phenomenon for me because I learned way back in Macroeconomics 101 that tax cuts during recessions or depressions are bad ideas. I mean I'd love a free $500 but I really don't think the American people need tax credits as much as we need to reduce federal debt, create new jobs and promote alternative energy innovation. And we really can't afford to throw $300 billion down the drain right now, not after the federal government has chosen to spend billions bailing out the bank and auto industries, we need every penny to help prepare us for the challenges of the 21st Century, the most prevalent right now being ending our addiction to foreign oil.

Aanaren · 01-05-2009, 03:17 PM

Quote:

Originally Posted by Solid Snake

It's just a strange phenomenon for me because I learned way back in Macroeconomics 101 that tax cuts during recessions or depressions are bad ideas. I mean I'd love a free $500 but I really don't think the American people need tax credits as much as we need to reduce federal debt, create new jobs and promote alternative energy innovation.

True, but the average voter wants to hear about money in their pocket, not in the government's. Tax cuts are always popular regardless of if they're helpful or harmful. I agree with what you're saying, but just wanted to point out that it's not much different from what he ran on and spoke about during the debates.

Also, bear in mind that if we create jobs via infastructure and "green" industry that increases tax revenue and (hopefully) decreases spending on unemployment and other government benefit programs. Of course, that may not be the case, but one can assume that's part of the reasoning.

Gorefiend · 01-05-2009, 03:18 PM

I'm pretty sure that I saw the case for lowering taxes and increasing spending in times of recession to stimulate the economy in a book by Joseph Stiglitz. I definitely know he said NOT to raise taxes, and not to cut spending.

That said, while I get the point that all money is good money, will the balance sheet have higher, lower, or equal tax income for the government after the cuts and expired Bush cuts? Cause I can definitely see the argument that dropping taxes on the poor and lower ends of our middle class will be good, even if not from an economic perspective (and who's to say they won't be more willing to spend, being poorer and all?), certainly from a social, which may be Obama's ultimate goal in this.

Professor Smarmiarty · 01-05-2009, 03:33 PM

Governments have tried lowering taxes during recessions.
Some key times this happen include the Great Depression and the oil crisises of the 70s for worldwide events as well as local events. It has never worked really.

Solid Snake · 01-05-2009, 03:37 PM

Temporarily ignoring the small minority of Americans who are legitimately impoverished enough to really need the money, the vast majority of middle class Americans (even well below Obama's threshold of $200,000-250,000 incomes) can probably afford not to receive tax breaks for a while. America in general tends to consume too much, and in an economic crisis this legitimately massive and with the federal government's debt skyrocketing and with unemployment growing and with global warming looming on the horizon, I really think if Obama gave a great speech about Americans sacrificing a bit in consumption in order to benefit in the long-term, he'd have a much more positive effect on the long-term viability of the United States of America.

Tax cuts aren't the answer. We need the federal government to have the revenue available to make long-term systemic progression a reality.

And dear Lord I'm starting to sound like a kooky liberal. What the hell has happened to me lately?

01-05-2009, 02:35 PM	#1
Solid Snake Erotic Esquire Join Date: Nov 2003 Posts: 5,563	Obama's Stimulus Plan http://www.msnbc.msn.com/id/28503322/ So Obama's stimulus plan appears to include a $300 billion tax cut. I mean, really? One of the reasons I voted for Obama was I thought he wouldn't obsess over tax cuts like Bush did at a time when the federal government is just spending too much to afford tax cuts. These tax cuts include over $100 billion for businesses, $1000 tax breaks for couples and $500 for individuals. I mean, hold up a second. First, in recessions, tax cuts tend to be fairly useless in terms of encouraging spending because most Americans get their tax cuts and immediately stuff it into their savings accounts. Very few Americans will receive tax cuts now and go "Great! Let's go buy that new flat-screen TV I wanted!" Of course the sheer fact that this is being compared to Bush's '08 measures has me in a bit of a funk. I wonder how hardcore Obama supporters are going to defend Obama using the same tactics that they decried with Bush a year earlier? The bottom line is: I think this is a terrible idea. The government needs to jump-start the economy by reversing Bush's tax cuts, bulking up on its own access to funds necessary to handle its own debt, and begin massive federal programs in regards to upgrading our infrastructure and affording new alternative energy solutions that could create all the jobs and all the new sources of income we need. The last thing we need to do is pretend that more tax cuts to individuals and businesses is the solution. As Obama doubtlessly plans on increasing federal spending, where's the money he's going to spend going to come from? Oy. Democrats, Republicans, there really isn't much a difference, is there? __________________ *WARNING:* Snek's all up in this thread. Be prepared to read massive walls of text.

01-05-2009, 03:18 PM	#8
Gorefiend That Guy Join Date: Sep 2004 Location: The city that doesn't sleep Posts: 1,039	I'm pretty sure that I saw the case for lowering taxes and increasing spending in times of recession to stimulate the economy in a book by Joseph Stiglitz. I definitely know he said NOT to raise taxes, and not to cut spending. That said, while I get the point that all money is good money, will the balance sheet have higher, lower, or equal tax income for the government after the cuts and expired Bush cuts? Cause I can definitely see the argument that dropping taxes on the poor and lower ends of our middle class will be good, even if not from an economic perspective (and who's to say they won't be more willing to spend, being poorer and all?), certainly from a social, which may be Obama's ultimate goal in this. __________________ The world of truth has no certainty. The world of fact has no hope. "Environmental laws were not passed to protect our air and water... they were passed to get votes. Seasonal anti-smut campaigns are not conducted to rid our communities of moral rot... they are conducted to give an aura of saintliness to the office-seekers who demand them." - Frank Zappa, prelude to Joe's Garage Ever wonder THE TRUTH ABOUT BLACK HELICOPTERS? Last edited by Gorefiend; 01-05-2009 at 03:22 PM.

01-05-2009, 03:37 PM	#10
Solid Snake Erotic Esquire Join Date: Nov 2003 Posts: 5,563	Temporarily ignoring the small minority of Americans who are legitimately impoverished enough to really need the money, the vast majority of middle class Americans (even well below Obama's threshold of $200,000-250,000 incomes) can probably afford not to receive tax breaks for a while. America in general tends to consume too much, and in an economic crisis this legitimately massive and with the federal government's debt skyrocketing and with unemployment growing and with global warming looming on the horizon, I really think if Obama gave a great speech about Americans sacrificing a bit in consumption in order to benefit in the long-term, he'd have a much more positive effect on the long-term viability of the United States of America. Tax cuts aren't the answer. We need the federal government to have the revenue available to make long-term systemic progression a reality. And dear Lord I'm starting to sound like a kooky liberal. What the hell has happened to me lately? __________________ *WARNING:* Snek's all up in this thread. Be prepared to read massive walls of text.

01-05-2009, 02:42 PM	#2
Marelo Napoleon Impersonator Join Date: Dec 2007 Location: Kansas Posts: 816	Just going to nitpick at one point of yours: Putting the money in a bank account is pretty much the same as spending it. The banks don't just put your money in a box and wait around for you to come pick it up again; they loan it out to people and make business investments with it.

01-05-2009, 02:53 PM	#5
Marelo Napoleon Impersonator Join Date: Dec 2007 Location: Kansas Posts: 816	Well, other than that (well-quashed) point, I had nothing to add. I really don't see why he is doing this... Though, I wonder if those tax cuts have any other restrictions on them, like income or dependents. It would make a lot more sense if it were only for the less strained tax brackets. Edit: Ninja'd.

01-05-2009, 03:33 PM	#9
Professor Smarmiarty Sent to the cornfield Join Date: Mar 2007 Location: K-space Posts: 9,758	Governments have tried lowering taxes during recessions. Some key times this happen include the Great Depression and the oil crisises of the 70s for worldwide events as well as local events. It has never worked really.