What's going to stimulate the economy (updated)

[ProSense]

The President just made proposals totaling $350 billion:

Obama to Ask Congress to Pass $100 Billion Research Tax Credit

Obama to Propose Tax Write-Off for Business


<...>

It would cost an estimated $200 billion in revenues, though the ultimate net loss would be $30 billion over 10 years, administration officials say, since businesses would eventually deduct the depreciated value of the equipment in any case.

<...>

Obama Comes Out Swinging


<...>

He’s on the right track by proposing $50 billion to improve our infrastructure.

<...>

Also, it's likely that most people don't remember that these programs are still in effect for the 2010 tax returns:

The Making Work Pay Tax Credit

First $2,400 of Unemployment Benefits Tax Free

Updated to add:

Here are two of the most ridiculous arguments against the proposed stimulus:

• It will not pass.
  
  
• It's too late anyway.

What's the solution: give up? If nothing is going to pass, are people making this argument ready to accept nothing? If it too late, then nothing will help.

[VMI Dem]

1. Rec.

[Lost4words]

2. TL/TL

[ProSense]

3. $350 billion is "TL/TL"?

Maybe the President should give up like some people obviously have.

[Lost4words]

6. you have a job dont you?

[doc03]

4. Insanity=Doing the same thing over and over again expecting

different results., A.E.

[ProSense]

5. Proposing stimulus

is insanity?


Edited for tact.

[Lost4words]

7. unlike you to hold back, we need solutions not stimuli!

you can prime a dry well all you want but it wont change the fact that a new well must be dug, you dig?

[doc03]

9. The last one didn't work that well. The infrastructure

work won't create jobs it will create temporary work a couple years from now. The tax credits for new equipment will encourage companies to spend money on equipment to eliminate jobs or move them elsewhere. Here is a novel idea give every American making under $106,000 a year a refund on their payroll tax. It puts money in people's pockets they buy things an it makes jobs.

[HiFructosePronSyrup]

10. The last stimulus didn't work well?

Are you fucking kidding?

[doc03]

13. The unemployment is higher now than when it stared and the

majority of the money is still sitting around unspent waiting on projects to be approved. We need jobs now not in 2012.

[HiFructosePronSyrup]

14. Unemployment would be at Depression era levels without it.

See, this is just the sort of bullshit that Rahm and Gibbs are talking about.

[doc03]

18. Rahm, Gibbs and Axlerod should be kicked out on their ass n/t

[HiFructosePronSyrup]

26. People who claim the stimulus didn't work...

are demonstrable liars.

[doc03]

32. You tell me when will we see a (job) from it?

[HiFructosePronSyrup]

34. You've been seeing jobs from for many months now.

You just won't admit to it, because it contradicts the narrative that you're trying to promote.

[doc03]

37. Stimulus doesn't make jobs it puts a few people to work

until the money is gone. Alright we give your state $1 billion today for infrastructure, when will the work get started?

[HiFructosePronSyrup]

38. When? About a year and a half ago.

http://www.oregon.gov/recovery/StimulusReporting/ARRA_Projects.shtml

Who, exactly, do you think you're fooling?

[doc03]

44. Come on you want to build a bridge how long does it take before

all the studies and everything before any work gets done? There is a company in this area that announced 3 years ago they were going to build an amusement park that will employ 1500 people. Over three years have gone by and they still haven't completed environmental studies and the Army Corps of Engineers are still dragging their feet, not one spade of dirt has been turned to date. The state has been going to build a connecter between two towns here since I was a teenager I'm 62 now..

[HiFructosePronSyrup]

45. So now you're complaining about protecting the environment?

Really grasping at straws now.

[doc03]

48. Just making a point you just don't go out and start

building a highway or bridge it takes years of engineering and there are environmental studies, it's just a fact. In today's world I doubt you could ever build another Hoover Dam. They built dozens of dams in this area during the depression era, today it would take a minimum 5 years before anything could be started let alone built.

[Jeff In Milwaukee]

59. I work for a non-profit organization

We have two people working on our staff who are funded directly by stimulus dollars. So that's two jobs.

[doc03]

21. Unemployment is at depression levels n/t

[ProSense]

24. No it isn't n/t

[doc03]

29. It is if you are unemployed! n/t

[ProSense]

36. So if you were unemployed in 1998, the countrry was experiencing depression-level unemployment? n/t

[Jeff In Milwaukee]

60. Have you ever considered posting somewhere else?

Your observations on the subject of economics are idiotic.

I don't even know where to begin addressing this patent nonsense - or if I should even bother to attempt it.

Just for starters....Oh fuck it. There's no point.

[paulk]

8. the research tax credit gets renewed every year anyway

bfd.

The write off for business is wrong headed - why would businesses invest in new equipment when no one is buying their products or services? It's the demand side that needs to be stimulated, not the supply side.

and $50 billion is nothing - it's spitting in the ocean and Obama and his team have to know that.

Tax credit only worthwhile if you're paying taxes - hard to do when you're unemployed - which is the real problem.

and unemployment benefits tax free - once again, bfd - what's that come to, a few hundred bucks at most?

[ProSense]

12. If it gets renewed every year anyway,

why are people acting like it's the worse thing that can happen?

[paulk]

41. strawman

you're not even trying anymore...

[ProSense]

51. There was no strawman

"you're not even trying anymore..."

Your responses are non responses. Do you think they prove you right?

[paulk]

56. I hope I'm not proven right, actually

but this plan seems more of the same - as Krugman so aptly put it -

Obama, once again, goes for the capillaries...

[ProSense]

17. Oh, and the BFD is not just passing it

but also making it permanent and establishing an infrastructure bank.

[zipplewrath]

11. Swinging?

Proposing a 50 billion dollar package, when a 500 billion is what is needed, is "coming out swinging"? Talk about "lowering the bar".

[ProSense]

15. Yeah, and that's from a progressive critic of the administration. n/t

[doc03]

16. When I woke up this morning and heard them re-playing Obama's

speech in Cleveland, I said if that is all he can come up with we are finished in November. The so called Stimulus has been totally discredited by the MSM.

[ProSense]

20. "The so called Stimulus has been totally discredited by the MSM."

Yeah, the MSM does a good job, and it's a good thing you rely on them for your opinions.

[doc03]

23. It doesn't matter what I rely on, look at the polls

the American people are convinced that's all that matters.

[ProSense]

25. Screw the polls.

They had McCain winning all the way up to October.

How are you going to vote?

[doc03]

28. You know it doesn't really matter, every time I get all

fired up cause we get a Democrat in office they don't deliver. The only thing that makes me vote for a Democrat anymore is I know the Republicans get what ever they want when they take office.

[Milo_Bloom]

19. Corporate friendly tax credits.

Oh Joy.

The fact that unemployment compensation is taxed AT ALL is backwards to begin with, so I am not sure I can celebrate them giving the first 2400 FREE OF TAXES as a huge victory.

[ProSense]

22. "The fact that unemployment compensation is taxed AT ALL"

The fact that it has been taxed all these years and you're complaining about it when some relief is proposed as part of the stimulus is interesting.

[Milo_Bloom]

27. Huge difference between COMPLAINING and NOT CELEBRATING

I see you are ignoring the fact that these are incredibly corporate friendly tax cuts.

[ProSense]

30. "The fact that unemployment compensation is taxed AT ALL "

is complaining.

[Milo_Bloom]

31. Which has nothing to do with Obama

Nor did I claim it was his fault.


Dear god, man, do you ever put thought into your responses?

[ProSense]

33. "Nor did I claim it was his fault."

So your response was a non sequitur? You just wanted to point out that the tax relief was insignificant because by no fault of Obama's unemployment benefits are taxed.

[Milo_Bloom]

58. Only a partial nonsequitur.

It was a comment on not really being worth celebrating as a huge legislative accomplishment and it being very sad that we have to count this as something amazing.

When someone offers to take off the brass knuckles before punching me, I tend to focus on the fact that I am still being punched.

[MadHound]

35. There are good, solid reasons to be against this,

Namely that tax cuts and tax credits are the weakest tool in the economic tool box if you want to stimulate the economy. This isn't opinion, this is fact, Econ 101. This is also a large part of the reason why the first stimulus hasn't done very much. Obama and the Dems, out of some misguided sense of bipartisanship, or simply unwilling to fight, loaded that first stimulus bill down with tax cuts of one sort or another. In fact that stimulus bill consisted of forty percent tax cuts. That's why it failed to stimulate much at all.

What is needed is a true, large scale jobs program. Not this piddly fifty billion, but something more on the order of ten times that, five hundred billion. Put people to work, like FDR did with the WPA. Give people jobs, they get paid, go out, spend that money, create demand in the private sector, and the private sector starts hiring again, and thus we reverse this cycle we're in.

But tax cuts, all that's going to do is transfer even more wealth up the socioeconomic ladder and allow the economy to continue to struggle.

But then again, it would require Obama to show leadership, cracking the whip on the party to get them all in line so that they can then fight, I mean really fight, not folding at the first sign of a faux filibuster.

[doc03]

39. We need jobs yesterday not two years from today building

a bridge. Take the 99ers out and give them work, it doesn't matter what, just give them work for a pay check. If they did that they could pay dozens of people $15.00 an hour for every one construction worker that gets work. All this was was a Labor Day payoff for support from the unions come November..

[ProSense]

42. "Take the 99ers out and give them work, it doesn't matter what, just give them work for a pay check"

Doing what: building a bridge?

Oh brother.

[MadHound]

46. No, doing what they're good at, whatever that may be

FDR set painters to painting, musicians to playing and anthropologists to saving ways of life that were dying in this country. No reason that the same can't be done now.

[doc03]

49. I agree give them some work for a fair pay. We could use

all the unemployed people in this area just cleaning up the downtown that looks like Baghdad after Shock and Awe.

[doc03]

47. You don't just build a bridge. They would be better off

cutting weeds, picking up trash, whatever, not waiting for an environmental study on a bridge project 5 years from now. That's what FDR did he had the CCC and WPA, they planted trees, built
stone walls along the highway, made parks. A couple of my uncles worked at a CCC camps and that's what they did. A laid off factory worker isn't going to get a job building a bridge. There needs to be jobs for the people that can't get work.

[ProSense]

50. Are you kidding?

Total expenditures on WPA projects through June 1941, totaled approximately $11.4 billion. Over $4 billion was spent on highway, road, and street projects; more than $1 billion on public buildings, including the iconic Dock Street Theatre in Charleston, the Griffith Observatory in Los Angeles, and the Timberline Lodge on Oregon's Mt. Hood;<8> more than $1 billion on publicly owned or operated utilities; and another $1 billion on welfare projects, including sewing projects for women, the distribution of surplus commodities and school lunch projects.<9> One construction project was the Merritt Parkway in Connecticut, the bridges of which were each designed as architecturally unique.<10>

Nancy Blair, state supervisor of the South Carolina WPA Library Project, inspecting a model of a bookmobile.One project of the WPA was funding state-level library service demonstration projects, which aimed to create new areas of library service to underserved populations and extend rural service.<11>

South Carolina had one of the larger state-wide library service demonstration project. At the end of the project in 1943, South Carolina had twelve publicly funded county libraries, one regional library, and a funded state library agency.<12>

link

[doc03]

52. They did long term projects like dams and highways, but

a good part of the spending was just what you may call make work projects that put people to work immediately, my uncles planted trees and worked building a stone wall along a mountain highway in WV. Back in those days you could start a project in short order. We have a bridge here that was built in 8 months back in 1842 without all the modern equipment we have today. A few year back it took them longer than that for a new steel deck and a paint job. How long did it take to build the Pentagon? a year? You couldn't build that building today in 5 years.

[ProSense]

53. "How long did it take to build the Pentagon? a year? "

You mean for the year it took to build it, no one was working until it appeared?

Infrastrtucture sepnding is one of the best stimulus for a reason.

[doc03]

54. Today it would take 4 years of study before it ever got started is

what I mean. Today it would probably take the f---g politicians 5 years to figure how many sides it should have. Oh and after that year there was no job created.

[ProSense]

40. "What is needed is a true, large scale jobs program."

"Not this piddly fifty billion, but something more on the order of ten times that, five hundred billion."

WPA: "Expenditures from 1936 to 1939 totaled nearly $7 billion...Total expenditures on WPA projects through June 1941, totaled approximately $11.4 billion.

The New Deal of the 1930s equaled no more than 2 percent of the nation's gross domestic product. The new legislation represents over 5 percent and is probably no more than an opening bid -- Obama and his congressional allies will next turn to the foreclosure crisis, the reform of financial markets and an overhaul of federal budget practices.

link

Still, $350 billion is not much less than $500 billion, and accordingly $50 billion isn't going to pass.

[MadHound]

43. Umm, 300 billion of that is in tax cuts and credits, not job creation.

Tax cuts and credits are the least effective method of stimulating the economy.

And frankly, and legislation proposed by the Democrats could pass, and should pass, but it means that Obama and the Dem leadership in Congress has actually got to lead their party, and the Dems in Congress have to grow a spine, stand up and fight.

But you're right, until they do that, nothing of consequence is going to happen.

[Jeff In Milwaukee]

61. I agree with you, but there are good, solid reasons to be for this

The first is that Obama can't conjure appropriations from thin air. "Showing Leadership" is all well and good, but as we've seen with offshore drilling and stem cell research, even an Executive Order isn't enough to get things done some times. And in this case, any massive jobs bill has to get through Congress. Quickly. The first is not likely and the second simply out of the question.

With regard to the tax cuts, there is some political theater going on here. Republicans are supposed to love tax cuts, but if they support this one, they'll be giving the Democrats some breathing space running up to November. If they oppose it, they'll look like obstructionists who don't want to create jobs.

It's not a perfect solution. What I'd like to see is that this passes (or doesn't) and helps the Democrats maintain their majorities, and then embark on a more ambitious public works program between 2010 and 2012.

As a historical sidenote: The WPA wasn't created until almost the end of Roosevelt's second year in office, and funding didn't start flowing until well into the third year. Doesn't really mean anything, but I thought it was interesting.

[ProSense]

63. There are reasons why other programs are better.

"It's not a perfect solution. What I'd like to see is that this passes (or doesn't) and helps the Democrats maintain their majorities, and then embark on a more ambitious public works program between 2010 and 2012."

There are people knocking the original stimulus, which was passed by the current Congress. The thing people have to come to grips with is that the President isn't proposing things just for the hell of it. What kind of political capital will he gain by failing to pass anything?

Krugman is saying these proposals can't pass, and some people agree.

Well, if that's the case. When and how will a larger package pass? There aren't currently 60 Democrats. It would have been great to gain a seat or two, but that is unlikely to happen.

You're right about leadership. It isn't clear to me what people think the President can do to force Republicans to vote for something. When presented with that fact, the response always seems to be that it will look bad for Republicans. Well, look at the state aid bill, which ended up being much less than the President proposed. By the time it passed, people were beginning to blame the Democrats for not getting it done.

[ProSense]

55. More on the President's R&D tax credit.

Ezra Klein

Update: An administration source e-mailed to say that Atkinson and I misunderstood the proposal in this interview. Here's a more accurate description:

The President is proposing to increase the R&E credit, simplify it and make it permanent. Specifically, he proposes to raise the alternative credit rate from 14 to 17 percent, shifting more businesses to the simplified credit and raising the average value by 20 percent -- which would be the largest expansion in the credit's history. This takes the 10-year cost from the $85 billion for making it permanent as proposed in the President's budget up to about $100 billion.

[MadHound]

57. One hundred billion that will be, for the most part, pissed away

We would be better served to put that one hundred billion into a jobs programs, the most efficient form of economic stimulus, rather than pissing it away on the weakest form of economic stimulus.

[ProSense]

62. Right.

When the stimulus reduced payroll taxes by about $40 per paycheck, people complained about how useless that was.

About $80 per month, and the claim was that most people wouldn't even notice and would forget about it. Well they got it, and did.

Now the clamor is for a payroll tax. While it is more stimulative (unemployment benefits are the most stimulative), a payroll tax would have about the same impact: provide a slight increase in take home pay and be easily forgotten.

Here is Robert Reich's suggestion:

Democrats should propose eliminating payroll taxes on the first $20,000 of income, and making up the revenue loss by applying payroll taxes to incomes above $250,000.

This would give the economy an immediate boost by adding to the paychecks of just about every working American. 80 percent of Americans pay more in payroll taxes than they do in income taxes. And because lower-income people would get most of the benefit, it's likely to be spent.

link

What's that about $100 to $125 per month? For how long? If it could pass, it wouldn't be long before someone claimed no one noticed and blamed the administration for not doing it right.

[MadHound]

64. Exactly, which is why putting that money towards a jobs creation program would be better

Thanks for making my point.