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Economic Stimulus Package

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http://www.bloomberg.com/apps/news?pid=206...p;refer=economy

As the article states, exact details of the package have not been released yet. A part of the article I find amusing is the following quote:

"It's getting money to people who are likely to spend it,'' Leonard Burman, director of the Washington-based Tax Policy Center, said of the Bush plan. "It might do a little good for the economy.''

I call it "getting money to people whose money it actually is." What a novel idea it is that if people keep the fruits of their labor, it might do ""a little good for the economy." The stock market thus far today does not approve of this. Dow and S&P are down about 0.75% so far and dropping, after being down nearly 3% yesterday. It knows that this plan will be paid for by deficit and not by spending cuts.

Edited by adrock3215
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The stock market thus far today does not approve of this.

Because the markets know that this is not enough of a tax break to make a difference. (Too little, too late, Washington morons!) It's like taking a teeny, tiny, baby step to the life raft when the boat's already half sunk.

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Wall Street Journal with a good op-ed out today rebutting any "package" as Keynesian in nature:

We're All Keynesians Now

But the $250 or $500 one-time rebate check they may now receive has to come from somewhere. The feds will pay for it either by taxing or borrowing from someone else, and those people will have that much less to spend or invest themselves. We are thus supposed to believe it is "stimulating" to take money from one pocket and hand it to another....The poor will spend those payments on something, but the amount they thus "inject" into the economy will be offset by whatever the government has to tax or borrow to fund the transfers. No wonder stocks sold off yesterday after Mr. Bernanke endorsed this 1970s' economic show.
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Not sure. I mean to say we will have more inflation which I think means the value of the dollar will deflate?

Basically. Usually though people would say "have to devalue the dollar" to avoid the confusion between "deflating" the value of a dollar (due to inflation) and deflating the currency (which would mean causing there to be fewer and fewer dollars). A semantic pitfall.

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In English, what Bush said today is as follows:

The Federal Government takes your money and spends it on various things. This year we had planned to take in about $300 million less than we spend. We will borrow that money and the next generation can figure out how to pay that debt.

Right now, people are hurting, so the Federal government is going to borrow an extra $150 million and send everyone a check. We'll let the next generation figure out how to pay that extra debt. We've already run up a debt of about $9,000 billion, so another $150 billion won't be noticed.

It is amazing that both political parties, and the Fed chairman, are quite solidly behind this type of scheme.

It does seem that the most difficult issue that confronts human beings is how not to focus on short term "fixes" (or all shapes and sizes) while evading a long term consequences. I suppose this is a uniquely human issue, animals never really face it.

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Deal struck to send checks to taxpayers

Congressional leaders and Bush administration officials have reached a bipartisan deal on an economic stimulus package that would send $600 to more than $1,200 to most taxpayers in an effort to keep the economy from falling into recession.

Most single taxpayers would get $600 and most two-wage households would get at least $1,200. The deal includes an additional amount of $300 per child. A total of 116 million taxpayers will receive checks of some size.

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  • 2 weeks later...
In English, what Bush said today is as follows:

It is amazing that both political parties, and the Fed chairman, are quite solidly behind this type of scheme.

It does seem that the most difficult issue that confronts human beings is how not to focus on short term "fixes" (or all shapes and sizes) while evading a long term consequences. I suppose this is a uniquely human issue, animals never really face it.

I'm sure when the checks come in the mail, all the politicians will repeatedly tell their constituents, "hey, isn't that check great?! yep, I helped get you that check!" So it's not that amazing that they would all be behind it; they're more interested in reelection than fixing anything in the long-run. It's sort of like how every president takes up Israeli-Palestinian peace talks in their last year of office.

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You don't get one if you are single and make over $75,000 (or married, over $150,000). So (as if it isn't obvious anyway) it's another redistribution scheme; redistributing future income to the poor and lower-middle class today.

If it came attached to a matching spending cut, I might actually be for it. Though I'd want the money only to go to taxpayers.

What do you want to bet that the check will be considered taxable income? Or worse yet added directly to your tax bill for 2008 (i.e., treated as a loan from the government against your taxes)?

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I'm glad to see that despite the politicians' best laid plans, the American people plan to save their rebate money and/or use it to pay down debt. Apparently only about 1 in 5 plan to go out and spend the rebate.

A CCH CompleteTax survey of 2,020 U.S. adults commissioned by CCH and conducted by Harris Interactive found that 47 percent plan to use the rebate money to pay down debt. Another 32 percent intend to use the rebate to save money, and 21 percent plan to spend the rebate.

http://www.webcpa.com/article.cfm?ARTICLEID=26717

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I'm glad to see that despite the politicians' best laid plans, the American people plan to save their rebate money and/or use it to pay down debt. Apparently only about 1 in 5 plan to go out and spend the rebate.

A CCH CompleteTax survey of 2,020 U.S. adults commissioned by CCH and conducted by Harris Interactive found that 47 percent plan to use the rebate money to pay down debt. Another 32 percent intend to use the rebate to save money, and 21 percent plan to spend the rebate.

http://www.webcpa.com/article.cfm?ARTICLEID=26717

Sadly because the rebate checks were purchased with debt they aren't actually paying it down. They are simply delaying it further into the future when they will have to pay it through taxes.

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Sadly because the rebate checks were purchased with debt they aren't actually paying it down. They are simply delaying it further into the future when they will have to pay it through taxes.

No, they won't have to pay it, some other taxpayers will. Many of the recipients of these checks don't pay income tax; certainly those who pay lots of income tax will be paying the debt in the future and won't be getting a check now commensurate with the debt they will have to pay off for the checks sent to everyone else. In point of fact they won't be getting a check at all since it only goes to people making $75,000 a year ($150,000 for married) or less.

Being one of those people with a gun to his head, having the money stolen from him, I suppose I'd rather see the money go to paying off debt than buying more toys. I'd much rather not have the gun to my head though.

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Everything the government owns and controls is taken from the private citizens of this country.

I think one law the government could implement that I would agree with is to force everyone to have that sentence tattooed onto their arms at birth. Only then will there be the slight possibility that the public will not forget this fact when they should remember it most. :D

Edited by brian0918
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I think one law the government could implement that I would agree with is to force everyone to have that sentence tattooed onto their arms at birth. Only then will there be the slight possibility that the public will not forget this fact when they should remember it most. :D

If that happened, they'd simply make sure no one learned to read.

Besides which people would tend to ignore it anyway, just like with other piece of scenery that doesn't change.

Now if it was radium ink on the insides of the eyelids, maybe..... :D

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