Where did people get the notion that the entire stimulus package

[hedgehog]

was going into building and repairing roads? First of all, there is only so much construction equipment out there. How many new people could be hired? Second, the stimulus went to keep people working, stopping the chain reaction of lay-offs, to keep state services going and to extend unemployment benefits until the economy picks up. I don't know if we need a second stimulus or not, but I like what I've seen so far.

[DJ13]

1. Dont know about roads, but I do know

That when things are worse than predicted (the admin expected 8.25% unemployed this year, were already at 9.5%) that you dont sit on the alloted stimulus money, you get it out ASAP.

[liberal N proud]

4. There are a lot of funds in out there already

Even with construction, it takes planning before you can ever put shovel to dirt. The construction projects that are already being funded were ready to go when the funds came.

Unemployment rate always lags any recovery. It is a big, big economic ship and turning around in a swift downstream current isn't going to happen in a few short months.

Put it this way, if the stimulus would have turned the economy around already, then the right would have right bitching about the debt.

Another factor, in an economic recovery, money needs to flow at a steady rate to "build" growth. If you dump it all on the market at once, it will all get absorbed into savings and other non stimulating holes. Japan quit funding their economic recovery early this decade and the economy slipped right back into recession.

[DJ13]

7. Plans need to be fluid

Waiting for "shovel NOT ready" construction is stupid when the rate of unemployed continues to balloon.

Yes I've heard all the excuses from both Congress and the administration, but the money needs to be put to work NOW......not next year just to try and help our party in the midterms.

[lapfog_1]

2. More than a third was in the form of tax cuts.

one of the worst "compromises" ever done.

The people in Washington are entirely clueless on economics.

[Diamonique]

5. Abso-fuckin-lutely!

I have yet to figure out how tax cuts can stimulate an economy.

[lindisfarne]

8. Some have figured out that some tax cuts do have a stimulus effect & are easy to implement quickly.

See
http://www.democraticunderground.com/discuss/duboard.php?az=show_topic&forum=132&topic_id=8522098
Robert Reich link, in particular, in #0, but see also links in #1.
Pay roll tax cuts can and should be one of many measures taken to stimulate an economy.

[lapfog_1]

11. In a normal recession...

Also, the big hammer used in the past was not tax cuts but reducing the prime rate.

However, neither is much good in a "deep recession" (or depression).

The reason is that people are cutting back on everything. A tax cut simply puts more money in their bank accounts to be saved for the "real rainy day" (the day that THEY lose their jobs). You might think that, AHA! those banks that have that saved money would now want to put it to work (i.e. lend it out)... but NO... they have been given hundreds of billions (if not trillions) in fed stimulus money already... with almost NO increase in lending, in fact, they are quickly upping their credit terms because 1) we have enacted some sort of minimum controls on credit card practices and b) Americans are actually paying off their debt. But it all points to the fact that the consumer is NOT spending, and won't spend our way out of a mild recession. Because this isn't a mild recession. You can throw all of the economic theory of the last 70 years right out the window. Robert Reich is a Free Trade proponent who is now in over his head, along with Robert Rubin, Larry Summers, Tim Geithner and the rest.

The tax cut was a useless appendage that cost us too much. We should have been RAISING the taxes on the very wealthy (anyone that makes over $250K) as a way spend that money on any number of government projects. I would start on a massive distributed green energy project... say rooftop solar on every home and business in America. But that's just me.

[lindisfarne]

15. Well, you pick & choose who you ignore. One thing I think most economists fail at is assessing

the psychological effects of many factors.

Economists' idea of what is "rational" behavior was completely unsupported by any human research. The idea that raising minimum wage was bad was also unsupported by any research (human or otherwise). When the relevant research was done, it was shown that the economists were clearly wrong.

As was shown in the link I provided in #8, the measures like payroll tax cuts, increases to medicare & social security, could get rolled out quickly & provide a rapid stimulus effect.

If you plan to ignore the research cited by Reich (and many others, if you've followed this issue), where's the research to back up your opinion? You need research that shows that under the conditions you've laid out, the multiplier effects shown by other research are no longer relevant.

=======
Dean Baker doesn't agree with you either. He thinks the payroll tax cuts & other quickly implemented measures have helped.
http://www.prospect.org/csnc/blogs/beat_the_press_archive?month=07&year=2009&base_name=stimulus_arithmetic

[joeglow3]

18. Key point to your post:

"But it all points to the fact that the consumer is NOT spending, and won't spend our way out of a mild recession. Because this isn't a mild recession. You can throw all of the economic theory of the last 70 years right out the window."

-This is EXACTLY the case. We, as a country, have been living at completely unsustainable levels on borrowed money. Until people learn they can get by without their 60 inch televisions, Iphones and fast food three times a day, we will continue to struggle. People NEED to get used to a lower standard of living (nothing LOW by any reasonable standards, however). Instead of getting the brand new house that cost 50% of your annual salary, get the existing home that still has a kitchen, bathrooms, bedrooms & a garage for half the price.

We are at a point in our country's history where we face a pivotal decision. One path gets us back to a point where we can live comfortably for a long long time and the other continues us down a path that leads to financial ruin.

[ipaint]

19. How low must those of us towards the bottom go?

I've been living in a recession since reagan. No 60" tv, no iphones, no fast food, no house, no health ins. etc for years now. I know the much pandered to middle class must reasonably adjust but just how low must the vast working class go. My next move will be the street. I'm not alone.

[joeglow3]

20. That is why I said "We, as a country"

Clearly some are living more responsibly than others.

That said, I am shocked at the number of people who talk about how diffiult they have it and they talk about using their computer, with cable internet access, at home. My wife and I are doing just fine, but there have been a couple time, when discussing cutting, 2 of the things at the top of our list were internet and cell phone. These 2 items cost over $1,000 a year and are far from necessities.

Note: This is not a commentary on you or any individual person.

I am equally shocked that my wife and I have 3 kids and live in a 40 year old, three bedroom house that is valued at about $130,000 and a co-worker of mine is married with no kids and had to build a $400,000 house.

Waste is greater at some levels than others, but is present everywhere. We, AS A SOCIETY, need to realize that MANY people across all income levels are living beyond their means and it is NOT sustainable.

[hedgehog]

21. Doing economic reasoning by anecdote is as faulty as doing science

that way. Some people think society is in trouble because people are over-buying luxury items on credit. A lot of people can point to someone they know who is doing exactly that. I suspect that the problem is that people have been using credit to cover the gap between necessities such as food, clothing, medical fees, college fees and housing and stagnant salaries. (I can well understand someone living in a boom area buying a house with no down payment because the payments are the same as their monthly rent.)

What we need is solid data on how people spent borrowed money. Given the number of bankruptcies associated with medical bills, I don't think the profligate spender is as common as some people think.

[ipaint]

23. Well perhaps you wouldn't be so shocked

at us poor folk with internet at home if you could open your mind to the fact some of us have part time jobs online and internet is a necessity not a luxury like it is for you. Most people I have read on this board who are working poor use the library. I am so sick of these kinds of high and mighty judgments of people who struggle to make ends meet each month.

Maybe you should save your shock and outrage for these folks instead of judging people who have nothing save for an old computer and $10.00 a week internet so they can spend more than the allotted 1 hour at the library job searching or educating themselves as to the next rip off scam their wealthy representatives in government have concocted to screw them yet again-

New climate strategy: track the world’s wealthiest

US researchers have proposed a new strategy to tackle the global climate dilemma: target the biggest polluters in a country, who also tend to be the wealthiest individuals.

Under the framework, a universal cap — rather than different caps for different countries — would be placed on carbon emissions and countries would then be tasked with getting individuals living beyond that cap to reduce their carbon footprint.

“Most of the world’s emissions come disproportionately from the wealthy citizens of the world, irrespective of their nationality,” said lead author Shoibal Chakravarty, a research scholar at the Princeton Environmental Institute.

“We estimate that in 2008, half of the world’s emissions came from just 700 million people,” he added, noting that many emissions owe to lifestyles that involve airplane flights, car use and the heating and cooling of large homes.

http://rawstory.com/08/news/2009/07/06/plan-floated-to/

[bbinacan]

9. Read this

It's all about the correct balance of tax rates.

Kennedy knew this.

http://www.heritage.org/research/taxes/bg1765.cfm

[lindisfarne]

14. You couldn't find a non-Heritage foundation link?n/t

[bbinacan]

24. No. I wanted a link

where Dr. Laffer is the author and not some interpretation. Why not get the words from the man himself? IMHO, you need to lose the knee-jerk reaction.

[PVnRT]

26. Winner

I still agree with Krugman that more should have been spent on infrastructure and scientific research.

[xchrom]

3. entire? -- perhaps you could provide a few links to corroborate

this 'entire' assertion?

and i do mean a few -- cause i haven't seen ONE that asserts the 'entire'.

[hedgehog]

16. I'm being ticked off by the local paper which keeps running articles

with this tine:

Stimulus spending so far in New York: More 'cushion' than hardhats

http://www.syracuse.com/news/index.ssf/2009/06/central_new_yorks_food_pantrie.html

Stimulus money plugs budget gaps while little goes to road construction in New York state

http://www.syracuse.com/news/index.ssf/2009/07/stimulus_money_plugs_budget_ga.html

[sandnsea]

6. Republicans throw the kitchen sink

and the left is there to catch it and throw it back.

[Oregone]

10. "First of all, there is only so much construction equipment out there."

Yeah, and doing so just might lead to more equipment being produced as it multiplies across the economy. This is a good thing, not a bad thing.

[hedgehog]

17. Seeding the money into the system slowly by first ordering

construction equipment might be too slow to be effective. I'm guessing that it takes 6-12 months on some of the equipment. Plus, unless the government buys it and leases it out, where is a private company going to come up with the cash to buy the equipment.

another consideration is whether we want to keep pouring money into road building or whether we want to step back and consider commuter rail, long range rail or other alternatives.

[pinb1212]

12. Stimulus needs to be the quickest way possible to pump

capital into the system. Infrastructer projects tend to be a sloooow way of doing that.

[Jennicut]

13. We may need a second stimulus but good luck getting that passed by Congress

At this point I wished Obama never passed the first one and people were screaming for it now after they realized we actually needed it.

[hedgehog]

22. It's amazing how many people fail to understand that unless

money is injected into the system now, everything will grind to a halt. What is this, an alternate universe where Keynes never lived?

[LWolf]

25. No, some of the stimulus package is going,

not to create jobs, but to blackmail states and school districts into adopting the Obama/Duncan privatization agenda for public education, while districts are RIFfing employees right and left.