What is happening with this world? President -Elect Obama’s stimulus plan looks more like a Republican proposal than you would think he’d put out there. In many ways it looks more Republican than some of President Bush’s more spendy programs.
Of course, though, I’m an idiot, because when I wrote the title of this post I wasn’t thinking in the race terms so now it looks like I was making a racist pun. I wasn’t. I’m merely commenting on the fact that tax cuts were the last thing I expected to see from this particular President. I do notice that he’s keeping his Democratic street cred by not having deep cuts in the Estate and Capital Gains taxes. I mean, honestly. God forbid that anyone earn too much money. God especially forbid that anyone earn too much money and then die of all things. We can’t have that in America. Nosiree.
Oh well. I’m glad to see that we’re all on somewhat the same page in realising that an economy can’t grow without money to water it. I’m also glad to see that we understand that the money comes from the people and they should get first crack at spending it where they like.
I’d still really like to see some type of mortgage relief put into place. I know from personal experience that when one is jobless, the spectre of losing one’s home can kill hope. I’ve seen firsthand how the spectre of joblessness is dwarfed by the thought of all comforts being ripped away. It kills health and marriages. * I insist that if we want to have any meaningful economic recovery it must include some type of mortgage relief. The easiest and least interventionist is still the automatic stay that I mentioned months ago. Just as you can put your student loan payments on hold when you lose your job, you ought to be able to put your mortgage on hold. Doing so would remove about 75% of the stress of joblessness. It would make layoffs less catastrophic for communities and strengthen banks’ positions on their mortgage investments. With fewer defaults due to unemployment, mortgages again become a worthwhile place to put your money. The best part of this plan is that it doesn’t cause the government to go into further debt. All other aspects of the stimulus plan involve borrowing from the future to pay for the past. Seeing as how that’s what got everyone into this mess in the first place I can’t say I’m too thrilled about that idea.
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*Of course I was blessed enough to have a strong emergency fund and generous and helpful relatives. We kept our house and our marriage was actually made stronger by facing the adversity.
I completely agree, as an employee in the homebuilding industry I know that this mess started with the housing market and it will end with the housing market. Not just mortgage relief but a complete home building stimulus package. Tax cuts are not going to do it.
[...] Then I read this by Katherine Coble, who has been through this herself and she breaks down some of the feelings beautifully. I’d still really like to see some type of mortgage relief put into place. I know from personal experience that when one is jobless, the spectre of losing one’s home can kill hope. I’ve seen firsthand how the spectre of joblessness is dwarfed by the thought of all comforts being ripped away. It kills health and marriages. * I insist that if we want to have any meaningful economic recovery it must include some type of mortgage relief. The easiest and least interventionist is still the automatic stay that I mentioned months ago. Just as you can put your student loan payments on hold when you lose your job, you ought to be able to put your mortgage on hold. Doing so would remove about 75% of the stress of joblessness. It would make layoffs less catastrophic for communities and strengthen banks’ positions on their mortgage investments. With fewer defaults due to unemployment, mortgages again become a worthwhile place to put your money. The best part of this plan is that it doesn’t cause the government to go into further debt. [...]
fuck you bitch!
I pretty much agree with you about the mortgage stay thing, Kat. But I just don’t see how the recently proposed stimulus plan is going to put more people to work (I mean, if 30 million people pay down their credit card bills that will keep employment up in Delaware and South Dakota, but not anywhere else), which is why the tax cut/rebate did no good when Bush tried it — how will results when Obama tries it be different? Infrastructure projects fix our roads, fix our bridges, fix our school buildings, fix our coal ash holding ponds, and employ more people while doing so.
I have no idea why some schoolchild in Pennsylvania has a problem with me. At least, though, he or she is able to fully articulate his or her position.
But I just don’t see how the recently proposed stimulus plan is going to put more people to work
If I get a tax cut of $500 I’m buying a new stereo for my car. My sister will use hers to go on vacation. My brother will either use his to go on vacation or pay down a bill or buy some more stuff for his kids.
The point is that the money gets to organically seed in the market via multiple distributers, versus a forced lump distribution via government channels.
Yes, it may be impressive–in the short term–to say “we created five thousand new jobs” while some bridges get built. In the long term, however, once the bridges are built the jobs either go away or we have to pony up more dough to create makework jobs that will artificially inflate the employment stats. It’s a selfish proposition. Like Social Security–another artificial fund–the chickens will eventually come home to roost.
Of course this barely touches on the fundamental idealogical problems I have with the government acting as an employer and a wealth redistributor.
In the long term, however, once the bridges are built the jobs either go away or we have to pony up more dough to create makework jobs that will artificially inflate the employment stats.
Give everybody $500 and the same problem exists. Once the money is spent, consumer spending returns to normal. And corporations take a while to respond to increased demand (especially if they already know that the increased demand is temporary), so by the time they get around to seeing a trend that leads them to hire new people, the trend is already peaked and headed in the other direction. That’s even more true in harsher economic times, because people AREN’T going out and spending that money. They are saving it, or using it to pay down debt.
Rather than just cutting everyone a check, why not give people jobs instead? Sure they may only have that job for a year or two, but that’s a year or two where they will be making and spending money consistently (and in amounts far greater that $500). If we agree that introducing money into the economy creates new jobs, then by the time their work is finished they should have their choice of a new career, no?
The average household in this country has $10,000 in credit card debt, we are told. That’s why the last time this was tried, most people used the money to pay down credit card debt rather than to buy new things that got people to work. Why will it be different this time?
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