About another Stimulus Check solution. Sorry, I just don't get it!

[NRaleighLiberal]

I was listening to Randi Rhodes today and someone called in with a question that's been bugging me since I hear that the Obama stimulus plan will include another check distribution.

Am I a rock head? I just do not get how this could possibly fix anything or have any even remotely lasting positive effect. People can't pay mortgages, are loaded with credit card debt, are in deep holes. How can a check for 500 or 1000 - which is typically just a drop in the bucket - do anything positive? It is an insignificant amount when compared with the real problem. The last few check distributions, as far as I could tell, did nothing really positive.

So what am I missing? It's like giving a starving person a piece of candy......

[Merlot]

1. Agreed. And peoe who file a schedule C don't get the full amount

I didn't get any of the first stimulus, and half of the second.

And no, I'm not in a high income bracket.

Even then, I thought it was a stupid idea. It won't change anything in my life or the countrys.

[Donnachaidh]

2. It's like giving a starving person a piece of candy......

Yup. That's how the government has treated the working class for decades. And it seems like they want to continue the practice of *tossing coins at the beggars* as they drive by in their limos.

CHANGE anyone? :sarcasm:

:puke:

[WI_DEM]

3. I thought I read that Obama wasn't going to do another rebate.

[Cleita]

4. Well, I'm disappointed.

Apparently the DLC is going to be running the nation and frankly they are Republicans in donkey ears.

[Warpy]

5. Your analogy is exactly correct

While that piece of candy might spike the blood sugar for an hour or so, the crash afterward generally goes below what it was before you handed out the candy.

So it is with a temporary, tiny cash giveaway. People who spend it on something but the bills are just doing a rush of buying what they normally would have bought over the next several weeks. The weeks following the stimulus see a decrease in overall sales after a brief rush.

The starving man needs nutritious food and the economy needs the support of living wages. Without them, they're both going to die.

[WI_DEM]

6. It's not going to be a rebate check--read....

Under Obama's plan, the key tax provision would be $500-per-individual or $1,000-per-couple rebates for most taxpayers. Instead of mailed checks — the rebate method that the Bush administration used in a failed bid to spark the economy last year — the amount would be distributed by withholding less from paychecks over a period of months.

http://seattletimes.nwsource.com/html/politics/2008593863_stimulus06.html

Frankly I don't see how $25 or so (for a single person) withheld from each check is going to jump start the economy either.

[Johonny]

8. I don't think it's suppose to

Obama promised a middle class tax cut and that's what he plans to deliver. That it's being called a stimulus package just seems to be placing a campaign promise in a different colored box to attract potential congressional voters.

[Hannah Bell]

21. especially when it only applies to "taxpayers" & payroll deductions when the last year =

increasing unemployment.

so how do they get you the stimulus if you're out of work?

[Greyhound]

7. I think the idea is to leverage the ripple effect of currency in the hands of

people who will spend it. People buy stuff, which helps reduce the backlog of inventory, which lets the producers start making the stuff again creating orders for their suppliers and so forth...

The primary cause of our economic woes is too much money concentrated in too few hands and industries, so when things go wrong in that sector(s) there is no alternative to keep the machine going. America's largest industry has become the financial sector which makes nothing and employs relatively few, a very poor choice of baskets in which to store your eggs.

[TNOE]

9. Then you don't understand "poor"

You have no idea what $1,000 per family could do when people can't afford food, can't make their car insurance payment, can't make their car payment, and are behind on bills. It's like a gift from God when it happens. I know people now who are just praying for a stimulus check just to make it another day, week or month.

[NRaleighLiberal]

29. Yes, I do understand poor. Both of my daughters are "poor".

And we've discussed it - both of them realize that a stimulus is just instant gratification whose effect vanishes as soon as the money is gone. What my daughters want is good jobs with health care - jobs worthy of their intellect and talents and effort they put into their education - and led to run up of their debt in loans.

[TNOE]

31. Wrong.

Well of course when you get to "pick" your drathers, but there are people who are dead end, and they know that and all they are trying to do is be able to get to their TacoBell job in their beat up cars and not have to walk a 1/2 mile to catch the bus to go make minimum wage - whatever it takes so that they can hold on to their crappy little jobs. In their cases - it has nothing to do with "instant gratification", but rather, it is an absolute necessity to continue to exist "for now".

We're still talking 2 different worlds here - and apparently there is a world that you are unaware of.

[NRaleighLiberal]

32. We can argue about this, but don't underestimate my empathy just based on a few words in a post.

[TNOE]

33. Well, good

I'm glad to hear that. I swear, sometimes I am really beginning to wonder about DU - Jesus Christ - there are people out there who desperately need this - maybe not you or your daughters, but SOME people do. And then after this - there are some more people who need better paying jobs - or a job - and healthcare, and a home, and on and on and on. But do we have to stomp on someone else to get what "we" need?

Just say - HAPPY DAY - I'm so happy there are people who are going to really get the help they need - and now, I will wait and work for what I need.

[endarkenment]

10. The idea is to push a couple hundred billion dollars

into the economy quickly in the hopes that the economic activity that results will jumpstart some sort of recovery, or at least stall or slow down the slide until more long term infrastructure projects can start to have an impact. It's quick and easy. Just about anything else takes a lot of time to get going.

[leftchick]

11. you are not missing anything

have you seen his so called economic team? Shit, bankers all and many associated with the current mess. It is very fucked up.

mother Jones had an excellent aeticle on what he should do with ten suggestions to rescue this country. He has not chosen one. You can tell the dlc is calling the shots. :(


http://www.motherjones.com/toc/2009/01/index.html

[TNOE]

12. Yea, but Obama is the boss

and their job is to do what the boss wants done. Don't forget that. Obama is no dummy.

[leftchick]

14. I disagree

from the stimulus plan he has laid out, he is not listening to leading economists.

[TNOE]

17. I may not have read up on it

to the extent you have - but a tax cut for the middle class, investing in new infrasturcture, a new eletric grid, getting rid of waste - no pork in the stimulus package - so far, I'm impressed.

I'm not so sure about "leading economists" either - look at the supposedly brilliant minds that got us into this mess, but of course, that was by design.

[leftchick]

22. I wish the mojo article was online

I suspect it will be when it is off the news stands. That article on what he should do to cut waste and find the money to correct the situation was an eye opener and then a no brainer for me. The problem is it would take one brave politician willing to piss off the financial sector and the corporate welfare queens. No mention of any of that from he or his team.

:(

[TNOE]

24. Have Faith

Lil Missy - have faith. Its a whole new ballgame now - and I know there are the disbelievers and the disenchanted, but I believe we are going to get some real justice now. And I want to hold on to that belief, for as long as I possibly can.

This is not Bush - nor the Bush administration who was filled with criminals from the Reagan/Bush years (or McCain, then we would know for sure - we're screwed and its over). Obama is the Boss.

[Danascot]

34. This was a great article

lengthy but well worth learning about more than a dozen ways to improve the economy with almost no pain except for top earners.

If you haven't already, this should have it's own post.

edited to add link to article - http://www.motherjones.com/news/feature/2009/01/fiscal-therapy.html

[leftchick]

35. Thank You for the link

I posted it here....

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x4786107

:)

[Danascot]

36. Great, I kicked it

:)

[Mike 03]

13. You are not a rock head. You are right.

The hypothesis behind this is that so much of our economy, sadly, is consumer driven, and we need to be spending, rather than saving.

But of course, smart people save, and they pay off debts, and they pay their bills--as you've pointed out.

This is yet another in a daisy chain of pathetic band-aid solutions that will only prolong the horror of what has to happen in order for this crisis to deflate.

There is nothing wrong with your mind. Unlike a lot of folks in Washington D.C., you are thinking straight.

[hfojvt]

15. it is supposed to have a multiplier effect, for one

logically, if 5,000 people in this town get $500 that is $2.5 million dollars. A certain percentage of that money will be spent. Maybe I will buy one of those chess sets for $90. Maybe somebody else will buy a new chair. Even if only half of it is spent, that provides income of $1 million to other people who then go out and spend that income. The spending and purchasing might mean that the chair factory is still selling chairs and does not need to close. It means the restaurant does not have to cut hours.

Granted, it may not be as huge as a $50 million road project that creates construction jobs for a year or two, but it is something. It does little to help somebody who has lost a job, but the extra spending is supposed to have a positive ripple that keeps even more people from losing jobs.

[TNOE]

19. You are right

not to speak of car repair, new stove or refrigerator, etc., etc., etc.

People will buy what they need, at least the poor people will. The well-to-do will stick it in the bank. But then, the stimulus is really not meant for those people.

[Mike 03]

20. That is the concept, but the reality is that those businesses that benefit from

folks spending that money have debt themselves, and on and on. (Or worse, the businesses have completely dried up lines of credit and are striving to make payrolls and pay off suppliers.)

Now, in this current market, the supposed beneficiaries of the stimulus spending are no better off than the spenders. So the money doesn't trickle down to anyone. It will just be absorbed and de-liquidated.

Edit: correct spelling of "liquidated."

[hfojvt]

25. even if they have debt, it still trickles back

If I pay an extra $500 (or even the same $500 that I might have defaulted on if I hadn't gotten a stimulus check) that provides another $500 in income to my creditor. The creditor then spends it, or uses it to pay somebody else. Debt repayment keeps the economy going too. Because if person A defaults to person B, that person then MUST default to person C (or is more likely to) who defaults to person D (or company D since corporations are people too) If that ripple gets too big it can take down a company which then takes down a bunch of other companies (their suppliers and the people they owe money to)

[Mike 03]

16. You are wrong about one thing: Home Depot LOVED the last round of check distributions. NT

[MercutioATC]

18. I'm not complaining, but I didn't qualify for a check the last time around.

My income was above the limit.

That's fine. I'm glad to see that the people who really need the money are getting it...but if economic stimulus is the goal, I'm sure as hell going to put more of that stimulus check into new purchases and less into paying down debt than somebody making $25k/year.

It's a smal help to the people who get it, but I can understand why it's not really stimulating the economy.

[Mike 03]

23. Same here. I didn't qualify either. NT

[NRaleighLiberal]

26. I didn't qualify either. And I was laid off last year. An interesting position to be in.

[Kashka-Kat]

27. It's not a "tax cut," its a LOAN from China. Well, what's a few trillion more....

May be blasphemy around these parts, but I'm beginning to think that it might be a good idea to have the 2 parties gridlocked as they were during the Clinton years. The result was - no one could agree on anything except balancing the budget, which according to many, was responsible for the healthy economy (reduction of interest). The Democrats like to say Clinton did it, the repbublicans like to say they made Clinton do it... but the truth is, there was nothing else they could do, nothing else they could agree on

With any luck we could have the fed govt shut down again for a while as it was in the 90s.

[leftofthedial]

28. who needs a job, when Obama will do whatever the repukes want

and give me $500?

Woo hoo!

Just in time for my Jan 1 health insurance rate increase, or the next round of gas-price increases, or the re-doubling of the price of a loaf of bread...

Give me $500 and it's gone before I open the envelope.

I need a fucking job! One with a salary that actually lets me live. One with benefits. One that won't be shipped to fucking Bangladesh next month.

Sure, I'll take the $500, but don't blow smoke up my ass by calling it stimulus.

[NRaleighLiberal]

30. Exactly. Well, I guess I am not such a rock head, since many here seem to feel like I do about it.