Thread: Obama Stimulus package

Originally Posted by Bugs

not a single red team member voted to pass it

yes, the party of hoover seems determined to try and send the US down the same road they did back in '29-'32.

Stimulus package, indeed. Pray tell...where does the financial supporting body come from? What America really needs to stimulate is their character. How about being real and existing so.

Hmmm, forcing americans to spend money (via tax) is all it is. Great.

Here are a couple of interesting links:

First one CBO revised report:
http://www.cbo.gov/ftpdocs/99xx/doc9968/hr1.pdf

It seems that the CBO posted a report earlier that was far less favorable and some of the major news outlets (Washington Post, CNN, NBC) made reports based upon that earlier report. The report was then revised and is the above linke. The reason for the revision seems to be unclear. The libbies say the first posting was based upon a priliminary/ incomplete review, while some of the red team seem to think it was due to pressure from Obama and the crew.

This second link it the house bill:
http://www.rules.house.gov/111/LegText/111_hr1_text.pdf

Obama realizes now is his best chance for anything.
He's swinging for the fences. Get as much money as fast as I can to fund projects for my first two years. Everybody loves me! Forget all of thoise campaign promises of eliminating pork-barrel earmarks ... I'm the president goddamnit! Two hundred million for birth control and STD prevention as part of an economic stimulus program.

Mr President ..... please.

At any other time in his administration -- beyond the first few months, the lovefest will be over. The spotlights and speakers will be turned off. The litter will blow across empty lots and the porta-potties will be overflowing, stinking and in desperate need of attention.

All that will remain will be another slimy politician sitting in the Oval Office trying to figure out how he can best apply his 5-10% influence on Congress.

Maybe we Can't!

^ sounds like you described GW Bush presidency perfectly. The problem is that not all Presidents are total losers like Bush, see Clinton for example.

Thanks for playing, Tex.

How long before your affliction subsides, Sputter?

Soon enough you'll realize Obama is just window dressing. No better, no worse.

Originally Posted by Texpat

How long before your affliction subsides, Sputter?

Soon enough you'll realize Obama is just window dressing. No better, no worse.

unlike you, Tex, I am a better judge of character than you are. You supported and defended a fool like GW Bush, I saw him for the fraud that he was the first day he was in office.

Obama is the real deal. He will bring peace to the world, walk on water, and multiply bread on the hills of Palestine. You will be amazed.

The more I read the CBO report the more I want to puke – these are stimulus items?
$20 billion for food stamps over the next five years
$3.0 billion for grants to improve the criminal justice system
$1.0 billion to fund the National Oceanic and Atmospheric Administration
$4.5 billion to the Department of Defense
$1.1 billion to Homeland Security
$8.4 billion to the Clean Water and Drinking State Revolving Funds
$6.6 billion to various other Interior and Environment departments – Forest Services
$17.6 billion for Pell grants and other student aid programs
$29.1 billion for other education programs
$11.1 billion to HUD
$70+ billion State Fiscal Stabilization fund – administered by the Dept of Eduction
$134 billion for $500 (single)/$1000 (joint) tax credit in ’09 and’10 – that last tax credit check sure did wonders, lets do it again in ’09 and ’10?
$13 billion tax credits related to higher education
$50+ billion to expand the state/local tax-credit bond programs
$20 billion to extend tax credit for renewable energy production – may not be all bad, but a chunk of this is biofuel related that has impacts outside the renewable energy area.
$25 billion to increase earned income tax credits for taxpayers with three or more qualifying children
$40 billion Health Insurance for the unemployed
$87 billion to adjust Federal Medical Assistance Percentage and put more burden at the federal level

Out of a $800+ billion dollar package, I feel less than half of it should be considered as stimulus.

Frontloading no doubt – and using peoples fear of the current economic situation to shove it thru as well. Hundreds of billions of dollars in this package are nothing more than a frontrunner to his plan to nationalize healthcare and have little to nothing to do with stimulating the economy.

The package is chock full of stuff Obama said he wanted to do – expand spending on renewable/alternative energy, health care, and educational issues, but have little to do (as they are outlined in the package) with pumping up the economy in the short-term. As such I see much of the package as more about the Obama agenda, and not about doing what is best in the here and now, and thus at this stage in the game is fiscally irresponsible.

Bush was hardly fiscally responsible but that is no excuse to continue to not be so. I’m not saying we need to balance the budget, but if we are going to throw money around, we should at least try to throw it at things that will generate new jobs and get the economy rolling – now, not years from now.

I’m not saying we should not spend money on education, but much of what is in the package related to education should be part of the standard budget package – not part of a stimulus package - except things like the educational infrastructure. The educational infrastructure is a good example of something I like in the Obama stimulus plan. Money gets put to work, as do people, and it taps on the educational side of things. But expanding the Pell Grants IMHO is not a good way to spend stimulus money. I’ve got nothing against Pell Grants in general, and if we have money in the standard budget to expand the program – then go for it. But giving more people Pell Grants is not going to do squat for the economy in the short run, and that IMHO (the short run) is what the stimulus package should be about. The standard budget is where the focus needs to change to the long term.

Another example of a kind of win-win in the stimulus plan is the IT part of the health care spending. That does something Obama said he wanted to do (update the medical records system), while at the same time puts people to work, and as an added bonus should result in some long term benefits as it relates to that side of health care costs.

OK, so now here are some things I actually like about the plan:

$2.8 billion for broadband expansion, though I am not sure about the additional $2.8 billion related to grants to extend broadband internet services. Not sure why it needs to be called a grant, except that maybe it is just the expansion of an existing grant program.

$4.0 billion to develop rural communities and improve infrastructure
$6.5 billion for capital investments by certain federal power marketing administrations (I want to do a bit more looking into this before I am 100% behind it)
$4.5 billion to modernize the nations electricity grid
$4.5 billion for the Army Corps of Engineers (something else I want to look a bit more into)
$7.7 billion for construction and repair of federal building/facilities (would like to see some of this go to state/local governments as well)
$4.6 billion for employment training programs
$20.0 billion for the renovation of elementary and secondary schools
$6.0 billion for military construction and veterans affairs, for the construction of hospitals, barracks, and day care centers.
$1.0 billion for the VA to maintain/repair VA medical facilities and cemeteries
$30 billion for highway construction (basically doubles the budget for these guys)
$13.1 billion for other transportation programs under DOT (another one I would like to look into more details on)
$5.2 billion in grants to state/local for community development
$17+billion for health information technology

The only tax provision in the bill I am even remotely OK with is related to extending various business tax benefits thru the end of ’09, but I am not so sure I want to see this as part of the bill either – at least not at a cost of $90 billion. Although the CBO much of the cost will be offset by increased revenues in subsequent years leading to a total impact of only $13 billion by 2019 (did I just say ONLY and BILLION in the same sentence?).

bugs, did you express such outrage at the $700 billion that the bush administration pushed through last year? please provide a link to a post in which you go into such great detail as you have in your five posts on the first page of this thread. it should be easy considering that you're above partisanship, right?

Originally Posted by Bugs

OK, so now here are some things I actually like about the plan:
$2.8 billion for broadband expansion, though I am not sure about the additional

That's cool if he means to implement it out in Suphanburi! Sorry, but America has to suck it up like we've had to do in the past. Soft foks these days...

Thanks for the itemization, Bugs.

This "bailout" doesn't seem like a bailout. It smells bad.

Can you put up the link, Bugs?

Originally Posted by Milkman

Thanks for the itemization, Bugs.

This "bailout" doesn't seem like a bailout. It smells bad.

Heh...that's putting is mildly.
It reeks...men maak!

Yep, it's about timing:- and how quickly the Euro, pound $c and %A respond.... B
All very well, but it's all to do with timing isn't it

Jan 27 2009 I want everyone to relax. You are being bombarded with numerous facts and figures that look pretty bad, but the facts are being interpreted with emotion and hype and hysteria. The predictive value of mis-emotion is usually chaos. There will be no Great Depression. First, let’s review what happened in the last few years in simple terms: The Federal Reserve manipulated interest rates below the real market rate for over a decade, creating dislocations in the normal markets.

Low interest rates forced retirees and savers to abandon safe investments and buy into all sorts of higher risk investments, including the stock market. (As a grandmother of one of my employees said many years ago, “I can’t afford to live on 3% interest when I use to get 6%”…a sad but true story).

Easy money created speculation and an artificial business expansion as the good times rolled.

The dot.com bubble was the first sign of trouble from the recent easy money regime. The solution: more easy money to bail out Wall Street and avert further panic.

Commercial banks are allowed to become investment banks as Glass-Steagall is repealed. Commercial banks can now invest and speculate globally outside of their normal areas of expertise.

Real estate booms, as new and creative ways to lend money appeared. Lending became a no brainer as loan packages could be sold away to another institution covered by a new insurance scheme (Credit Default Swaps). Therefore credit worthiness of customers became less important. Lenders became undisciplined. Who cared if the loan defaulted if the loan was “insured?”

Other exotic derivatives were concocted by the investment banks and commercial banks to make more fees and profits. Tried and true centuries old banking policies 101 were thrown out the window

The government pressured financial institutions to lend money for homes to millions of borrowers who were not only unqualified but high credit risks.

The excessive and low interest rate loans for homes fueled an even more over-heated and extended housing boom and housing price inflation – creating a housing bubble.

The over-the-counter derivative market went beyond $300 trillion and no one cared. $400 trillion – no problem. $500 trillion – no big deal.

Wall Street and the establishment press and authorities did not pay attention to the hard money newsletter writers who were screaming bloody murder about derivatives: Schultz, Skousen, Dines, Wood, Daughty, Sinclair, Russell, Mauldin, Casey, Katz, Turk, Taylor, Adens, Coffins, Lundin, Morgan, Ruff, Roulston, Grandich, Nadler, Bonner, Day and others.

Complacency was everywhere. The Dow was over 14,000. Wall Street and Main Street thought the economy was “fine,” paper money was “working” and debt levels were high but no big deal, the Fed was in control. So far so good.

The banking industry usually gets hit hard when the economy gets hit hard. But this time the major commercial banks were also speculating along with the investment banks.

Huge losses from leveraging and speculating in stock and bond markets as well as derivatives start showing up at the largest commercial and investment banks in the U.S. and abroad.

A national nightmare now is confronting Washington.

Global stock markets collapse and credit markets seize up everywhere. Many foreign countries are as bad off as the U.S. The financial pyramid was brought on by easy money. We are now faced with global investment losses and economic numbers that are at dangerous levels, and foretell a drastic future. But the future will be the exact opposite to what Wall Street and Main Street think will happen. Why There Will be No Depression The Fed, U.S. Treasury and foreign central banks will print their way out of the problem. A bad solution to a bad problem.

The U.S. is in a recession. This is the natural reaction following the huge economic paper money binge that has taken place the last 15 years. The major banks, insurance companies and investment houses are in real trouble. The pain is too much and the government will print the money to bail these institutions out.

3 million people are losing their homes. They should never have bought the homes in the first place. These people will go back to being renters. The homes are still there, they have economic value.

Investment bankers that busted Lehman, Bear Stearns and Merrill and lost their jobs will form hedge funds and buy many of these homes for 30 cents on the dollar. Then they will sell them in a few years for 50 cents on the dollar to people and other funds. Some people will move into a home and get a good bargain. Funds that buy these 50 cents on the dollar homes will sell them in 2-3 years for 70 cents on the dollar. Life goes on.

Banks and investment houses that lost money on these homes are already being bailed out. The losses are being covered by the printing press or debt from Washington

Unemployment: This is bad. In the U.S. we are at 7.2% and going higher. We are not at 10.8% (’82 recession) or 9% (‘74-’75 recession) and may not even get to these levels. Sophisticated investors say, “Unemployment is being low-balled by the government, it’s much higher”. I agree. But check out Shadow Government Statistics’ website run by brilliant economist John Williams (who should be a White House Adviser). This shows that the “shadow or real” unemployment number could actually be 17%. Sounds like a disaster. But back in 1994, the “shadow” unemployment number was 15%. So what happened in 1994? GDP was up 6.2%. The S&P 500 the following year was up 34%. There was no Depression from this horrendous unemployment. Official U.S. unemployment hit an 8-year high in 1992 at 7.8%. The solution to this was a 14% increase in the money supply (M1) and the stock market went up 6%. Do not panic because of unemployment.

There are still 144 million people getting paychecks. This means the economy is not dead yet. They will either spend the money or save some of it. When they save it, sooner or later the banks will lend to someone to buy or build or invest in something.

The average wage earner in the U.S. makes $47,000 a year.

Good God says Richard - this makes America uncompetitive in manufacturing. No wonder the Balance of Payments on Current Account is at an all time high


Multiply this by a possible 12% official unemployment rate which would be considered a disaster in this country, and you have the following: 18 million people out of work. Using $47,000 per person, this would equal about $850 billion a year of lost income and GDP. That would be a huge hit to the economy.

But wait a minute. Unemployment insurance for a $47,000 worker is about $400 a week. That reduces the $850 billion considerably. Also, the Government will simply print more money to handle this. They could print half the amount of the possible lost GDP - $425 billion. Using Washington logic, this would effectively handle half the consequences of 18 million unemployed people. Then it would be like there were only 6% unemployed. Printing or borrowing $425 billion would not be difficult compared to what they are already doing.

The great recessions of 1974-5 and 1981-82 resulted in the following: GDP increasing on average 15% within 36 months, the stock market booming the following year, and unemployment going down dramatically the following two years. Why? Because they increased the money supply and “bailed out” everyone with paper money.

The 74-75 recession had an 85% (that is eighty five % and not a typo) decrease in the price of the average NYSE stock from the previous high in 1973 and the Dow was down 41%. In 1982, the Dow Jones dropped 34% from its previous high. Both these market wipe outs were handled by the money supply being increased by 12.6% in 18 months in 74-75 and 14% in the 81-82 period.

The money supply increases in 2009 and 2010 could reach 50%!

So far, with bailouts, guarantees, the stimulus packages, $2-3 trillion of new money is already a foregone conclusion. This will equal a 25-35% increase in the money supply. The U.S. government will print as much money as is needed. They have panicked and are now going overboard. It is obvious that whatever happened in the past is going to happen again.

This means that we are not going to have a Depression but a huge paper money induced boom. It will be artificial and inflationary. It is all in the works right now.

Finally, if we were going to have a so-called Depression, why is copper above $1.50? Copper for delivery in December of 2009 and 2010 is above $1.60! You have heard the expression Dr. Copper. It is because as this commodity goes – goes the industrial world. It has always been a great economic indicator. Copper prices would be at 60 cents if a Depression was coming. Copper above $1.50 is saying, despite all the horrendous layoffs and headlines, that there is a lot of life left in the global economic patient. The financial system will be temporarily “saved” by paper money but working people and savers will be eventually crushed by this currency depreciation. Capitalism and free enterprise will get another bad rap when inflation rips through the system. Honest capitalism and classic free enterprise does not include paper money….the cause of all modern day economic problems. What to Do Expect Inflation not a Depression. Expect a boom to start sooner than later. Know the past and respect logic, not headlines. Am I telling you all is OK? No. I am telling you things are as bad as you think. But the authorities are using this crisis to bail out the system with paper money and because of that, the economy will once again go into a so-called boom that will be very inflationary. If you think a Depression is coming you will have your assets in the wrong place at the wrong time. What Happens Next The economy stagnates for another 9-12 months then turns around. Unemployment goes down with the induced economic upturn. The stock market rallies but never gets above its old highs. Inflation comes back with a vengeance. Commodities resume their bull market and turn the deflationistas into inflation believers. Interest rates will go up with inflation and probably to much higher levels. The stock market will go down when interest rates start going up. Long term bonds will become the worst investment in the world. The dollar will go down but so will other currencies as many world governments print their way out of their economic woes as well. Gold will go to new highs. Housing and real estate will recover but higher interest rates will slow this sector down considerably in the future. The gold and silver mining stocks will become the best performing sector on Wall Street for many years. The price of oil will go up due to inflation and global production declines of 5-8% per year from most of the largest oil fields in the world. The U.S. “recovery” will help the world recover and almost all countries will have another artificial economic expansion from all the paper money they have printed as well. China and India will create more shortages of basic materials and commodities by the sheer size of the populations and their economic and industrial progress. The U.S. will have even more economic dislocations from all the new paper money and debt taken on by Washington. The country gets set up for the next horrible recession some time in about 3-4 years. A Depression is impossible in the old sense of the word. If one describes a depression as the loss of purchasing power of the wage earner (a correct definition), then we have been in one for the past 50 years since wages have not kept up with the cost of living. But since everyone is thinking breadlines and the 1930’s, I will stay with that picture for our definition. It is not going to happen. Also, remember that the $2-3 trillion bail out numbers you are reading about can easily be bumped up to $4-5 trillion. Why not? The reason for the increase is simple…..”We are heading into the Greatest Depression in history.” As long as this misguided concept gets press and the NY Times, the media and politicians buy into it, then the government has a green light to create as much money as is needed. Next week I will finally get to the promised article about deflation and inflation. For more articles on the economy, gold and mining stocks please visit our website at Kenneth J. Gerbino and Company - Home Page Ken J. Gerbino
26 January2009

G_ddamn, BG! I can't be arsed to read all that!

Fok! - let's just say America's future has just been well & truly fucked and be done with it! Billions for Planned Parenthood - millions for endowment for the Arts whatever the fok that is!

Originally Posted by Texpat

He's front-loading his tenure.

Money up front. Good deal, eh? A real departure from the problems that got us into this mess.

What a fucking snake.

hmmm.....so much for respecting the presidency.

Originally Posted by Texpat

Whoever the next president is, whether they're for or against waterboarding (jeez) -- I'll continue to respect the presidency. And whether I voted for that person or not, whether I agree with his stance, you won't find me berating my president daily.

so, today is jan 29th. and obama was sworn in last week.

but you're an 'independent', right?

Originally Posted by raycarey

bugs, did you express such outrage at the $700 billion that the bush administration pushed through last year? please provide a link to a post in which you go into such great detail as you have in your five posts on the first page of this thread. it should be easy considering that you're above partisanship, right?

Yea, RC that's pretty typical of what seems to be going on in issues in general right now. Deflect the issue and try to make it personal.

I don't care for the bail-out, and said so back then. The market needs it's pound of flesh and it will get it eventually. Banks should be allowed to fail. We are simply pissing good money after bad, not only on the wall street bail-out, but the "loan" that was OK'd for GM and CRYsler as well.

The markets need to be allowed to work, and people will suffer. I did not go into any great detail on the bail-out package because unfortunately there really was no detail to go into. Bush asked for a huge chunk of money will little to no strings attached, and the blue team congress gave him the go ahead. This was an issue at the start of Obama's term because Obama wanted the second $350 billion released, in much the same way the first $350 billion was released - with no oversight, and no strings attached. Bush and the boys pissed away the first $350 billion, and now Obama and his crew have thier chance to piss away the second $350 billion.

I don't have a problem with the idea of a stimulus package in general but what has been approved by the house is reach way too far to be considered a stimulus package, and IMHO much of the funding won't have short-term results.

Now we are facing an additional chunk over $800 billion that to me contains a whole lot more fiscal irresponsibility - at a time we can least afford it. At least when Bush took over we had some lea-way (thanks to Clinton and the red team congress) in that Bush had a surplus going in. Just because Bush pissed way the surplus and got us headed in the wrong direction is no reason to say it is OK for Obama to continue down the path of fiscal irresponsibility.

I feel the place to deal with long term issues is in the standard yearly budget. I feel the stimulus package should include only things that will have an impact in the short/mid-term.

Originally Posted by Milkman

Thanks for the itemization, Bugs.

This "bailout" doesn't seem like a bailout. It smells bad.

Can you put up the link, Bugs?

They are up there already - my list came about via reading the CBO report and making notes. There is a detailed break-down at the end of the CBO report.

CBO report:
http://www.cbo.gov/ftpdocs/99xx/doc9968/hr1.pdf

And I just finished reading (OK, I didn't read all of it, but I did read most of it), the House bill that was passed. There is indeed some good ideas/programs, but for my two bits there is not enough real stimulus.

House Bill:
http://www.rules.house.gov/111/LegText/111_hr1_text.pdf