the real problems with Obama's stimulus/economy/administration

Originally posted by zeeblebot
a wealthy person's house

http://www.zillow.com/homedetails/27040-Old-Trace-Ln-Los-Altos-CA-94022/19527446_zpid/

For Sale: $24,950,000
Estimated Monthly Payment $134,629

Property type: Single Family
Bedrooms: 6
Bathrooms: 6.5
Sqft: 14,855
Lot size: 137,649 sq ft / 3.16 acres
Year built: 1992

Description
Spectacular estate situa ...[text shortened]... ouse, tennis court, huge pool w/shallow lounge area, elevated spa and terrace w/fp. PA schools…

That's not wealthy. Only Warren Buffet and Bill Gates are wealthy. Everyone else is poor.

Given that the stimulus program was so poorly structured and so overtly politicized, how do we know that, say, $500 billion more would have made a difference even on Keynesian terms? The money for government spending has to come from somewhere, which means from the private economy. Our guess is that by ensuring even higher debt and implying higher taxes, a bigger spending stimulus would have done even more harm.

Stimulus godfather Mark Zandi and CBO have produced studies claiming that the stimulus saved millions of jobs and thus prevented an even deeper recession. But these are essentially plug-and-play economic models that multiply the amount of dollars spent by the assumed impact on jobs based on previous studies, and, voila, the jobless rate would have been higher without such spending. In the real world, the economy lost 2.51 million jobs.

Think of the finance system as being the circulatory system of the economy, and a vigorous flow of money is needed to keep everything running at full strength. But sometimes, a crisis occurs and consumers become afraid to buy things and businesses become afraid to invest in anything - so much of the economy's money ends up just sitting in the equivalent of mattresses. The consumers won't start spending again until businesses start investing to create jobs, but the investors won't start investing again until the consumers start spending. This staring contest can theoretically go on indefinitely.

The idea behind a stimulus is that the government borrows a bunch of that money that's been sitting in mattresses and spends it -- in hopes of generating a "multiplier effect" that will provide the spark that's needed to end the staring contest between consumers and investors and create a rapid recovery.

The problem is that if consumers and investors are extremely fearful, they might take most of the stimulus money and just add it to their mattress stash. In such cases, the "multiplier effect" might be rather small. So a stimulus might have to be very large to have the desired impact. But the mere size of a very large stimulus creates fears about the impact of running up huge deficits and this by itself might make the mattress even more enticing.

Originally posted by KazetNagorra
That's not wealthy. Only Warren Buffet and Bill Gates are wealthy. Everyone else is poor.

yeah, but no1m's peering out of his tiny, roach-infested flat. everyone else looks wealthy from there!

Originally posted by PsychoPawn
In most parts of the country you would have to be a financial idiot to not be able to live very comfortably at least on $250,000 per year.

"living very comfortably" is not the same as "wealthy".

Originally posted by zeeblebot
yeah, but no1m's peering out of his tiny, roach-infested flat. everyone else looks wealthy from there!

"those @)($#*&@# MORONS are parking in front of my window AGAIN!"

Originally posted by zeeblebot
"living very comfortably" is not the same as "wealthy".

I would say the same for $100,000. Doubling comfortable is pretty close to wealthy in my book at least. Of course it depends on your definition of wealthy.

I've got an idea.

It seems that there are a lot of people who favor giving rich people a big tax cut. But we also have to get the budget balanced and the conservatives have been very short on ideas for specific ways of actually cutting spending.

So until someone proposes specific spending cuts, we should give everyone making over $250,000-yr that big tax cut and raise everyone else's taxes by whatever amount is necessary to balance the budget. And all of those people who currently don't owe any taxes because their incomes are too low should have to pay a minimum income tax to ensure that all Americans are doing their part to balance the budget.

I was just watching the Presidential News Conference and Obama said that even the people with incomes higher that $250K would still get a tax break on that first $250K

Originally posted by Metal Brain
I was just watching the Presidential News Conference and Obama said that even the people with incomes higher that $250K would still get a tax break on that first $250K

Yes they would because the taxes are incremental.

Originally posted by Melanerpes
I've got an idea.

It seems that there are a lot of people who favor giving rich people a big tax cut. But we also have to get the budget balanced and the conservatives have been very short on ideas for specific ways of actually cutting spending.

So until someone proposes specific spending cuts, we should give everyone making over $250,000-yr that bi a minimum income tax to ensure that all Americans are doing their part to balance the budget.

it's too late. we've already mortgaged our future, ponying up stimulus money that's going into the pockets of various cronies lucky enough to be associated with someone in federal, state, or local government.

Originally posted by zeeblebot
it's too late. we've already mortgaged our future, ponying up stimulus money that's going into the pockets of various cronies lucky enough to be associated with someone in federal, state, or local government.

I'm sure if everyone is willing to dig down deep on behalf of their country and make some real sacrifices, we can find enough money to give the rich people a generous tax cut and still balance the budget.

i'm not saying it's the motive of everyone that doesn't want to drop the tax cuts, but for a lot of the people in that category the motive is not to kill the golden goose.

don't know if it was the WSJ article or another one, but saw somewhere that the $250K+ income category includes most small business owners.

borrowing future deficit funds to dump on fed/state/local govts for them to pay salaries to people who are hunkered down and saving appears not to be working. who'd a thunk?

maybe the businesses are actually planning for the future, and foresee what the economy's REALLY going to look like when those bills come in.

Originally posted by zeeblebot
i'm not saying it's the motive of everyone that doesn't want to drop the tax cuts, but for a lot of the people in that category the motive is not to kill the golden goose.

don't know if it was the WSJ article or another one, but saw somewhere that the $250K+ income category includes most small business owners.

borrowing future deficit funds to dump future, and foresee what the economy's REALLY going to look like when those bills come in.

BS.

Further, increasing tax revenues from the wealthier taxpayers to reduce deficits "is a much better use of that money. That is a 'values' statement," the official said, arguing that 97 percent of small businesses "aren't touched by this, and the 3 percent of them that are largely lawyers and lobbyists and financiers … the Republicans want to masquerade them as small businesses."

http://www.foxnews.com/politics/2010/09/08/wh-dismisses-reports-obama-announce-decision-tax-cuts/

Originally posted by zeeblebot
i'm not saying it's the motive of everyone that doesn't want to drop the tax cuts, but for a lot of the people in that category the motive is not to kill the golden goose.

don't know if it was the WSJ article or another one, but saw somewhere that the $250K+ income category includes most small business owners.

borrowing future deficit funds to dump ...[text shortened]... future, and foresee what the economy's REALLY going to look like when those bills come in.

Double BS.

One of the most common objections to letting the cuts expire for those in the highest tax brackets is that it would hurt small businesses. As Sen. Orrin Hatch (R-Utah) recently put it, allowing the cuts to lapse would amount to "a job-killing tax hike on small business during tough economic times."

This claim is misleading. If, as proposed, the Bush tax cuts are allowed to expire for the highest earners, the vast majority of small businesses will be unaffected. Less than 2 percent of tax returns reporting small-business income are filed by taxpayers in the top two income brackets -- individuals earning more than about $170,000 a year and families earning more than about $210,000 a year.

And just as most small businesses aren't owned by people in the top income brackets, most people in the top income brackets don't rely mainly on small-business income: According to the Tax Policy Center, such proceeds make up a majority of income for about 40 percent of households in the top income bracket and a third of households in the second-highest bracket. If the objective is to help small businesses, continuing the Bush tax cuts on high-income taxpayers isn't the way to go -- it would miss more than 98 percent of small-business owners and would primarily help people who don't make most of their money off those businesses.

http://www.washingtonpost.com/wp-dyn/content/article/2010/07/30/AR2010073002671.html

Originally posted by zeeblebot
i'm not saying it's the motive of everyone that doesn't want to drop the tax cuts, but for a lot of the people in that category the motive is not to kill the golden goose.

don't know if it was the WSJ article or another one, but saw somewhere that the $250K+ income category includes most small business owners.

borrowing future deficit funds to dump ...[text shortened]... future, and foresee what the economy's REALLY going to look like when those bills come in.

So we need to do everything possible to save those golden geese. Those who don't make enough money to qualify as golden geese are going to have to pony up!! That probably includes you.