A second "economic stimulus" ?

[samclem]

Or, the government establishes individual Social Security Augmentation Accounts for everyone to whom they plan to send a check. Instead of the check, everyone gets $600 worth of credits to use in selecting from a menu similar to the TSP funds. You can't take the money out until you are 65 or disabled. Those over 65 can spend the $$ now.

Just the rumor that this was afoot would cause the market to take off.

As a bonus, everyone here who has been wringing their hands over the present stock prices and promising to get out of the market as soon as it recovers can bail out as it climbs.

Benefits: Instantly increases the national savings rate, provides additional $ for business use (some of the money would go into bond funds), revives the equity markets (temporarily at least), would likely not increase consumer price inflation (since an additional chunk of $$ would not be chasing the existing pool of consumer goods). It would also establish the concept of private accounts within the framework of Social Security--which I guess is a major reason it could never happen.

It wouldn't do much to encourage consumer spending, but do we really need that? Unemployment is very low.

 

[audreyh1]

After a great laugh, DH points out that it sounds like if gay marriage were legal, his wife would divorce him immediately and marry a woman!

Audrey

 

[NW-Bound]

The rebate check does not affect my spending at all, same as for most people in this forum who practice LBYM. So, you can say that it becomes a savings.

But if you are going to spend it, what do you spend it on for it to be called a "stimulus"? Buy more electronic gadgets or any imported goods, you are stimulating some foreign economies more than our own.

As I said elsewhere, I worry about the price of crude oil more than the housing bubble. You've got to think of economic activities that do not spur further oil consumption.

Any suggestions, other than dinners+movies in neighborhood establishments?

 

[ziggy29]

But if you are going to spend it, what do you spend it on for it to be called a "stimulus"? Buy more electronic gadgets or any imported goods, you are stimulating some foreign economies more than our own.

Well said. I rarely agree with Jesse Jackson, but when he declared this a "gimmick" and more of a stimulus for China's economy than our own, I actually cheered him on. Because IMO, that's what it is.

I would submit that if "stimulus" was necessary, it would have been better to plow that $150 billion back into the U.S. economy through programs to restore infrastructure and help wean us from foreign oil.

 

[Dawg52]

What a pleasant thought!! I'd love double digit returns for a change and the way you phrase it as "going gangbusters" causes me to greedily contemplate returns possibly even exceeding 25%. I sure hope you are right! That would really pump up my ER nestegg during my last year of work.

However, I am not holding my breath for this to happen in 2009.

That would just get me back to even from last years all time high. But I will certainly take it!

 

[Khan]

The rebate check does not affect my spending at all, same as for most people in this forum who practice LBYM. So, you can say that it becomes a savings.

But if you are going to spend it, what do you spend it on for it to be called a "stimulus"? Buy more electronic gadgets or any imported goods, you are stimulating some foreign economies more than our own.

As I said elsewhere, I worry about the price of crude oil more than the housing bubble. You've got to think of economic activities that do not spur further oil consumption.

Any suggestions, other than dinners+movies in neighborhood establishments?

As someone else mentioned, I bought $1200 worth of Kroger gift cards (with a 10% bonus). Didn't even have to actually get a stimulus check to purchase such.

 

[ziggy29]

As someone else mentioned, I bought $1200 worth of Kroger gift cards (with a 10% bonus). Didn't even have to actually get a stimulus check to purchase such.

And some people were able to use credit cards giving 5% cash back on groceries to do it.

So in the end they received $1320 of store credit for $1140 after cash back.

If we had a grocery store near by, I would have probably done it. I'd just have to be careful how I spent it there, because when I was in Houston, I remember Kroger being more pricey overall than HEB. So I'd probably do most of my regular shopping for non-sale items at HEB and stock up on sale items at Kroger.

 

[NW-Bound]

As someone else mentioned, I bought $1200 worth of Kroger gift cards (with a 10% bonus). Didn't even have to actually get a stimulus check to purchase such.

The deal you described is good, and can't be beat.

However, my original rhetorical question was, how we could spend it as Uncle Sam wished, meaning to slurge on something we do not usually do, to create new jobs and keep Americans employed. After thinking about it, I thought of a few things, such as hiring someone to work on your house, do some landscaping, etc... Someone gets a job, and you get the fruit of his service. The money stays circulated in the US, and not gets transferred overseas to pay for imports.

Just an intellectual exercise in economics, to see how an "economic stimulus" would work out best for everybody. Or does it work at all?

 

[calmloki]

After a great laugh, DH points out that it sounds like if gay marriage were legal, his wife would divorce him immediately and marry a woman!

Audrey

You wouldn't really do that would you Audrey? Or maybe you would. I'm so confused!

 

[audreyh1]

You wouldn't really do that would you Audrey? Or maybe you would. I'm so confused!

Oops! Of course he was talking about Vitter's wife not me!!!

Audrey

 

[Notmuchlonger]

I could always use more stimulation..economic stimulation oh yaaa..ohhh

 

[CitricAcid]

I remember an economist (a Chicago School-branch of economist) talking about these stimulus plans with great disdain. We are running at a deficit, in other words, the 150 billion dollars or so sent out is not funded by some saving or from the coffers but artificially pumping up interest rates . If you look at the grand scheme of things, with a 12 trillion dollar a year economy or so, $150 billion dollars spread thin over the year is a very small blip, and usually comes after all the bureucracy and paperwork far after the "recession" has done its worst.

Again, when we talk about real estate crash vs. oil boom, we are fueling consumers to continue their choices in the same way that they were by cheap oil, and by pawning this stimulus off as the greatest fuel our economy could ever burn.

Here is an exercise in futility for me when talking with some friends who loved the idea of the economic stimulus: Ask them what the downsides are. Do it, you will be surprised how many people do not understand the negative effects of this. And, if they do not know, ask them if it is so good, then why didn't the government think about doing this every day of every year! It must be brilliant, it's free money.

 

[brewer12345]

I remember an economist (a Chicago School-branch of economist) talking about these stimulus plans with great disdain. We are running at a deficit, in other words, the 150 billion dollars or so sent out is not funded by some saving or from the coffers but from borrowing or artificially pumping up interest rates through the FOMC. If you look at the grand scheme of things, with a 12 trillion dollar a year economy or so, $150 billion dollars spread thin over the year is a very small blip, and usually comes after all the bureucracy and paperwork far after the "recession" has done its worst.

Again, when we talk about real estate crash vs. oil boom, we are fueling consumers to continue their choices in the same way that they were by cheap oil, and by pawning this stimulus off as the greatest fuel our economy could ever burn.

Here is an exercise in futility for me when talking with some friends who loved the idea of the economic stimulus: Ask them what the downsides are. Do it, you will be surprised how many people do not understand the negative effects of this. And, if they do not know, ask them if it is so good, then why didn't the government think about doing this every day of every year! It must be brilliant, it's free money.

Wow, what an amazing display of a lack of understanding of macroeconomics! Bravo!

 

[ladelfina]

Here is an exercise in futility for me when talking with some friends who loved the idea of the economic stimulus: Ask them what the downsides are. Do it, you will be surprised how many people do not understand the negative effects of this. And, if they do not know, ask them if it is so good, then why didn't the government think about doing this every day of every year! It must be brilliant, it's free money.

CA, you are dead on. It's trying to buy off the proles so they don't pay attention to the larger undermining going on. Just like in 2001:
BW Online | October 29, 2001 | Why Bush's Stimulus Package Will Leave the U.S. Weaker

For 'second stimulus' fun.. take a look at this video:

washingtonpost.com

love it when he says "that's my usual line.."

 

[Jarhead*]

Wow, what an amazing display of a lack of understanding of macroeconomics! Bravo!

Brew: Cut this young guy a little slack.

He's a l9 year old college student.

When I was l9, I was hoping my body would recover from wounds sustained as a Marine Grunt in Korea. (And wondering how I would support myself when my enlistment was up).

By contrast, this young man not only has his own future figured out, but is also capable of correcting world wide financial matters.

(Evolution)?

Is this a great country, or not.

 

[CitricAcid]

Brew: Cut this young guy a little slack.

He's a l9 year old college student.

When I was l9, I was hoping my body would recover from wounds sustained as a Marine Grunt in Korea. (And wondering how I would support myself when my enlistment was up).

By contrast, this young man not only has his own future figured out, but is also capable of correcting world wide financial matters.

(Evolution)?

Is this a great country, or not.

He is right, just give me one year as fuhrer of the world and these world-wide financial matters will be cured.

 

[Notmuchlonger]

Brew: Cut this young guy a little slack.

He's a l9 year old college student.

When I was l9, I was hoping my body would recover from wounds sustained as a Marine Grunt in Korea. (And wondering how I would support myself when my enlistment was up).

By contrast, this young man not only has his own future figured out, but is also capable of correcting world wide financial matters.

(Evolution)?

Is this a great country, or not.

Every generation imagines itself to be more intelligent than the one that went before it, and wiser than the one that comes after it.

George Orwell

 

[BunsGettingFirm]

Geez, why not just lower my tax by $600. That way I get the whole $600 minus the shipping and handling fee and minus the need to feel "gratitude" to the politicians for paying me with my own money.