"So I did the math. Say you get a paycheck every two weeks, so over a twelve month period that makes 24 paychecks...If you spread the $500 per person tax cut over 24 paychecks, that put $21 more in your pocket per paycheck. "
Not to quibble, but a check every two weeks for a 52 week year equals 26 paychecks - which means the amount per paycheck is even less...
John Aravosis
· 11 months ago
sorry I'm tired, will correct that now. And you're not quibbling, I appreciate the correction
thingwarbler
· 11 months ago
Why is it so hard for them to consider the option of a very targeted stimulus package that would ensure the money went to a) buy american, and b) buy something with long term value, not just an extra helping of ding dongs or a round of beer for the boys? Is this coming in addition to some sort of classic recession dodge where we spend money on infrastructure? Can we afford to willy-nilly give away a gazillion dollars twice? It would be really nice to hear something vaguely leader-like on this from the Obama team. Enough with the promises, "show us the money" -- but not just as a lame handout that'll push us further into bankruptcy.
red_dwarf
· 11 months ago
Another excellent point. Perhaps putting $800 billion in new jobs for infrastructure repair/replacement would go a lot further then assuring most of us get an extra $15 every 2 weeks.
Palli
· 11 months ago
I want a windfall capital gains tax for all the huge profits gained by the scams of the Iraq War, Katrina Recovery? How about a transittance tax for $ going to coporate tax haven accounts and fake corporate offices in other countries.
Shades
· 11 months ago
Someone brought up the idea of gift cards before, something along the line of the Food Stamp Program although it could be used anywhere credit cards are accepted. People will probably still use it to buy food but at least it would be used to buy stuff instead of pay off stuff. What I don't know is if it would cause a hardship for shops to modify their checkouts to accept the government card.
John Aravosis
· 11 months ago
A friend of mine had recommended gift cards as well, but there's no way to know that people aren't spending the same on their weekly groceries, but instead of paying cash, paying with the gift card, then using their cash to pay off their debt. Money is fungible, a gift card still frees up cash to go towards debt, savings, etc - unless the gift card is for something I normally wouldn't buy, a luxury good or something, then it might work.
melissap
· 11 months ago
As far as the fungibility of money goes - people are spending less and paying off debt. It is happening. A gift card that forces them to spend on non-essential items would work - not perfectly, but would force dollars where otherwise none would go. They would still be paying down debt as they are now - if possible, but now would add spending to that.
red_dwarf
· 11 months ago
Actually melissa your idea is excellent w.r.t. directing the flow of spending.
John Aravosis
· 11 months ago
Okay, though I still worry that if the gift card if for essential buys, like food, then people would just use the gift card instead of their cash
melissap
· 11 months ago
If they need food that badly - let them buy food.
Betsy
· 11 months ago
I'm of two minds about this: on the one hand, I tend to agree with everyone that this is not very much money. OTOH, I can remember being desperately dirt poor, and would have died for an extra couple of bucks in my paycheck.
Even now, just about every cent in my paycheck is accounted for by the time I get it.
Andrew
· 11 months ago
My solution for the crisis sort of fits with this approach, but in a socialist yet fabulous way has government oversight of how people spend the money. I propose a government-sponsored, compulsory "What Not To Wear"-style makeover for every person in America, with qualified stylists having approval over every piece of clothing purchased. That way we ensure that the money is really going to spending on harder-hit parts of the economy, but also that everyone looks and feels better - at the end of pretty much every WNTW episode the subjects say that they can't believe how good they look and how much better they feel. Wouldn't that then in turn make people want to go out more to be seen? And isn't that just what America needs right now?
sullivan
· 11 months ago
I got $600 the last time and saved it. If you really want to make a difference send me $3,000.
RicKKK Warren
· 11 months ago
Do you realize how many donuts $500 buys?
Want one?
melissap
· 11 months ago
On that point exactly, I sent the following letter to my congresswoman Marcy Kaptur:
I wrote previously regarding the foolishness of the 700 billion dollar bailout; a bailout you rightly opposed as well. What the economy requires is indeed a stimulus, but one with a better chance of working. I have alighted on an idea which I think may do just that.
If you recall, during WWII, the gov't issued ration coupons. I was thinking our gov't should issue a similar coupon - but more like actual money with an expiration date. The money coupons could only be used to purchase goods and services, and not used towards debt payments, or debt service.
Sadly, we do have an economy which is 70% consumer spending, and consumers, are simply no longer spending.
As an average Mom in Toledo, albeit, one who follows the economic news more closely than most, I can say that I find it insulting and outrageous, that American citizens are at once berated for their "national failure to save" and further chastised to spend and shop in order to keep the economy humming. I would ask that we at least acknowledge this double edged sword and it's sharp tip upon which we all balance at the moment.
An expiring money coupon, which would be redeemed by the federal gov't once used, would allow American citizens to accomplish the spending stimulus we so desperately need, while also continue to save and pay down the debts that are already crushing them at home.
Sincerely,
red_dwarf
· 11 months ago
melissa - too pragmatic and logical. You have to come up with a plan to distribute unmarked bills with no oversight to the wealtheist Americans. Who is this Axelrod nutcase I keep hearing about lately - every since Obama shafted the LGBT community I can't stand to look at his face. If this Axelrod nutcase is the best Obama has I think we're in real trouble. So far he's batting 0.000 in logic.
melissap
· 11 months ago
They are not unmarked bills - they are like the ration cards of WWII. They have to be spent on things - whatever we decide - and very quickly. That is what they intend to do with cash in the pocket - but it didn't work. We have all been chastised into saving more.
Red Dwarf - I would also add that the treatment of the LGBT disturbs me greatly. It's a blow to all of us, straight or gay who understand what the marginalization of one group means - it's sickening - but, while I don't excuse it, I am very focused on the economy right now. I hope we all survive to fight another day.
ron
· 11 months ago
how about this. everyone cancel their cable and get rid of their stupid phones that require a $30 a month data plan. that's around $100 or more a month in everyones pockets that they can spend on actual, tangible things that are useful instead of an ephemeral "service" thats a total ripoff.
Forty2
· 11 months ago
Naw, that makes too much sense. Cut back on my sense of entitlement? How dare you! Commie!
Asphyxia 8
· 11 months ago
Considering that those of us lucky enough to still have jobs (knock on wood) will probably only get a 1-2% raise, if anything at all, this is even more negligible than last year's stimulus. Sounds nice on paper, sure, but it won't do a thing to help offset our ever-increasing cost of living defecit. Le sigh.
melissap
· 11 months ago
The crazy thing is, with this system we have, is that the money supply cannot expand without debt. Sound nuts right? But banks create money from debt. It is sheer ignorance or hypocrisy to tell people to save while knowing what this will do to the system. It's a game of blame the little guy - from both sides - save more spend more. somehow we are responsible for knowing the balance to strike - what BS. Anyway, this is an excellent video - explaining how money is created - starting with how banks came into being. http://video.google.com/videoplay?docid=-905047...
Michael Ditto
· 11 months ago
John, I don't think you've ever lived paycheck to paycheck before. Let me tell you what happened to the rebate check for the neighbors on either side of me: It went to pay debt, but not by choice. Both owed back taxes--one from unemployment payments, the other had defaulted on student loans. So instead of receiving a $300 check they received a statement saying their checks had been seized. $19 less withholding however would go straight to groceries.
People who live paycheck to paycheck don't go to the store to buy what they want, they go to buy what they need to survive, and make cuts from there when times are tough. $19 a week would make a huge difference.
Dianne_in_DC
· 11 months ago
I got a check in 2008, which was reduced because I "made too much money." However, by the time I got the check I had been unemployed for 3 months, with 4 more to go. The money went to pay my mortgage. After being unemployed for 7 months, I no longer spend money without carefully considering it. I spent some money on Christmas presents. But I was planning on trading in my Honda CR-V for a Fit when I lost my job. That's not gonna happen until I get to feeling that I am not going to lose my job again. And that my family and friends are also secure. I think the best way to do that is the "New Deal" type projects that will bring employment back to the US.
melissap
· 11 months ago
The problem with the rebates checks is that while some might spend it on goods - most will pay off debt. That is what I did. Our collective saving is putting a lot of stress on a teetering economy. A limited gift card - or expiring coupon that must be spent would force everyone to spend at the same time. That is what they tried and failed to do the fist time. If indeed that would help - then they must be spent and not saved - so we must find a way to do that. I don't claim it would work as intending - i.e. rebooting the economy - but at least we would know this time if "the idea that we all start spending again" would work at all.
triple7s
· 11 months ago
If you want to really pump up the economy, spur manufacturing, then send every taxpayer a $500,000 rebate, and just watch the economy SOAR.
feckless
· 11 months ago
Every time I get a minor increase in pay I don't notice it because I spend it, and thats the plan.
Last time I made $325 a week was over 10 years ago, and I know that was a mighty Clinton dollar as opposed to this faux canadian money we have now, but $20 was alot then and alot of people will appreciate the $40 a month. If the cut is only structured to those making under $100k a year it might undo some of the harm or the social security rip off from the Reagan years.
This money will be spent on our mcdonalds economy, and yes the money could be spent more wisely to help state budgets that are being slashed for the most vulnerable, but unlike W's 2 "rebates" (aka cash advances on the public credit card) this one will go into purchases.
hartinSF
· 11 months ago
we're skrewed. so much for small change you can compare to bush.
Older_Wiser
· 11 months ago
OK, one major flaw I noticed immediately, being on SS (will finally go over $1K in Jan thanks to 5.8% increase) and that is, people like me, with no earned income, people unemployed, on welfare, etc., in other words, those on a fixed income, their only income, will get nothing, and in most cases, are the ones who desperately need it. Maybe someone with a good income can afford to save it, and see it as a piddling amount, but I don't.
The $300 I finally got went to groceries, car repair and items for the house I needed, so yes, I spent mine on necessities, and that money went straight back into the economy. I have no debt, so none of it went there.
Most people I know spent the money because gas was high, groceries are high, daycare is high, etc., etc. People who live from paycheck to paycheck (and there are plenty of them) will actually spend the money for things they're cutting back on, or if it's debt, that's a good thing for them, too.
But do I think it will do any good? No. Only a return of plentiful jobs will cure our ills.
I don't know one person who makes enough money to save it, not in this economy.
Even if I were working (and I've been looking for 3 yrs), $19 would more than fill up the Saturn's gas tank these days and let me buy more groceries.
John Aravosis
· 11 months ago
You wrote:
Most people I know spent the money because gas was high, groceries are high, daycare is high, etc., etc. People who live from paycheck to paycheck (and there are plenty of them) will actually spend the money for things they're cutting back on, or if it's debt, that's a good thing for them, too.
I write:
But in order to be effective, the money has to be spent on something you wouldn't already have bough anyway, even without the money. Meaning, you'd have to buy MORE gas than before you got the check, you'd have to buy MORE groceries than before, etc. It's not enough to say you spent the check on groceries , unless you spent $300 MORE on groceries (or groceries and gays, etc. combined). The real question is, in your overall annual budget, you got another $300 - did you spend more that year because of having received the $300?
EmGD
· 11 months ago
You know what's funny? Every time you have one of these bailouts, you see some story 3 months later about how the porn industry reported a 20% jump in sales during the tax rebate time period.
We go through this every time, we hit some economic hardship and then hand out tax cuts and rebates with the mantra "for God's sake don't invest or save or pay off debt with this money, blow it on some stupid shit you don't need." Then we wonder why American's are in so much debt.
I would use, no need, the money to pay the taxes that will be due on my unemployment checks..... Ironic, isn't it.
AdmNaismith
· 11 months ago
Keep it. Make my roads smooth again and my bridges safe.
notoriousq
· 11 months ago
We didnt even get ours. The IRS dredged up a student loan that was supposed to have been forgiven because my husband is disabled, reinstituted it, defaulted on it without bothering to notify us and are now garnishing his disability check. So if theres another one of these checks going out ti won't matter it'll be going to a forgiven student loan
Bush_Bites
· 11 months ago
I'd rather spend it on infrastructure--then you know where the money's going and it will provide long-term benefits--but just to be devil's advocate:
"Socking it away in the bank" or "Paying off their mounting debt" are both good things.
Older_Wiser
· 11 months ago
Another consideration: If this plan is implemented, watch millions have to go another year without a pay raise...especially those on the low end. Employers will use it as an excuse not to give raises. After all, they hate the minimum wage, too.
Bush_Bites
· 11 months ago
One question I've had for awhile.
When people put it in their bank accounts or pay off their debts, wouldn't that help our economy by improving liquidity?
Or is too small amount (even in the aggregate) to matter?
Anybody?
John Aravosis
· 11 months ago
I think part of the problem right now is that the credit markets aren't providing credit because they don't trust anyone, and the banks don't trust each other. Not sure if increased deposits helps or helps enough.
renegademom
· 11 months ago
I work for state government, and always complained about the low pay, lack of raises, blah blah blah......and now I am grateful that I at least have "due process" rights attached to my job........banks like state gov't employees....
a big part of the problem is that so many jobs are at risk. how to loosen up credit? How to convince banks that the people who are applying for mortgages/loans will still have a job a year from now? I sure as hell don't know.
renegademom
· 11 months ago
This is a tough problem. I don't pretend to have any answers. $20 more every two weeks would pay for my kids school lunches, which WOULD help. I have to admit that any big chunk would be used to pay down my debt so I might be able to qualify for a mortgage while home prices are still in the basement. Don't forget this tax cut is in addition to the stimulus package for infrastructure, green energy, etc........and that will take longer to have a real effect.
Funny. We already got rid of our land-line and cable tv, and don't miss them at all. We watch free movie and tv on the macbook. I now coupon shop for groceries at the cheaper grocery stores (no more Trader Joes, ...wahhhhhh), and the plotting and planning and recipe-hunting has become a family activity. Shop for clothes for me and the kids at Goodwill, and do it like a scavenger hunt....and we find some great things. We now do recycled art projects (currently painting old cds and mounting on a huge piece of foamcore), and having a blast. So, there has been a pretty substantial "silver lining" for my family. I'm not saying it isn't hard and stressful. Just saying that it takes the same amount of energy to make it as fun as possible as it does to be depressed about it, and we made a conscious decision here that seems to be working for us. that being said, if I had an extra $500 bucks all at once, I'd LOVE to buy an lcd hdtv that I could hook up to my computer by wireless. Then we could get local channels and pbs, AND strem movies from my beloved macbook to the tv.
what about a tax credit for vacations......lol....works for me.
Bush_Bites
· 11 months ago
Yeah, I kind of forgot about that.
It's meant to be short-term aid until the infrastructure stuff kicks in.
I believe it's also meant to be a down payment on a return to a fairer tax policy, which will be instituted when Bush's tax cuts for the rich expire.
(Gotta say: It's weird that the people on the lower end are always worried whether than country can afford this or that, while the rich don't really give a f*ck.)
sukabi1
· 11 months ago
what this amounts to is a "dinner out" every 2 weeks -- at McDonalds...
yeah, that will solve the economy problem. I feel the recovery coming on now.....
KarenMrsLloydRichards
· 11 months ago
Or: a tall latte (extra foam) at Starbucks every Sunday.
That should stop the Starbucks closures.
cowboyneok
· 11 months ago
I agree with your take, John. I think its just plain STUPID!
Jersey
· 11 months ago
Fuck, he also promised to do away with all of DOMA not just 2 parts like Clinton would. That was a huge issue that made me swing his way instead of hers, at least initially. We need to harp on that promise if we're going to hold his feet to the fire. Shit DADT pales in comparison to granting equality throughout the country by eliminating DOMA which he said he supported!!!
cowboyneok
· 11 months ago
Good point about gays in the military. I heard the Obama Administration thinks they will "implement" the change in policy AFTER the Iraq War. Nice dodge. That would mean NEVER because we all know the War in Iraq will never end, right? UNACCEPTABLE!
Stewart
· 11 months ago
I couldn't disagree more, John. No, $19 is not going to cause us all to go out and buy big ticket items. But if I've got an extra $19 in my pocket? I'll stop in at the coffeehouse on the corner and have a cup. Or I might go to the bookstore and buy a novel I've been meaning to get to, or I might go to the record store and buy a new CD, or I might stop in the barbershop and get a haircut, or I might go into the stationers and buy a new notebook and a couple pens, or I might go into the office supply store and buy a spindle of CD-rs. It's those small everyday transactions that spread the money around, not the idea of "I'll get $500 and buy a new computer." I'm afraid you're really missing the point here.
John Aravosis
· 11 months ago
That's funny, because I wouldn't spend it I have another $19. I'm not sure I'd spend it if I had another 500. Then again, I'm one of those crazy people with "savings."
Stewart
· 11 months ago
As am I, so you can cut the snark. But $19 a week on incidentals isn't going to bankrupt my savings accounts, so I'm not seeing the connection. Clearly your mind is made up on this, so I'm not going to bother.
Nick
· 11 months ago
I thought I had found a post without a mention of a gay issue. I was wrong. It's cold here today. I blame the weatherman, who probably hates gays.
Nick
· 11 months ago
And on the merits, let me add that so what if people spend it on Starbucks or McDonald's? It's the spending that counts. The entire economy is interconnected as far as I can tell, not being an expert at all. And geez ... now we're bitching about the FORM of a tax cuts for normal non-millionaire-type people? Tough crowd.
Scott
· 11 months ago
It's an economically sound way to increase aggregate demand by making household net income higher. The chief virtue of doing this by reducing withholding is that the change in household income hits immediately rather than several months down the road, as it would with new spending approval or higher tax returns. Even a small amount of money per household adds up to a lot once you start looking at the taxpayer base as a whole--we don't need to move individual consumption by much to fix the problem at the level of unemployment we're currently at (<10%).
The major problem is that $140B isn't going to be a big enough stimulus to eat up the slack. You're going to want something about 5-10x as large, happening this year, so there's still lots more deficit spending to be done in the form of investment in public goods. It's this investment that pays off well over the long term, because it enables good economic growth over a multi-year period, and because we're chronically underinvested in this type of goods thanks to years of Republican rule at the statehouse level.
Pepper
· 11 months ago
I could use the $19. I have expensive prescriptions to buy!
james k. sayre
· 11 months ago
We need to stop wasting our tax dollars on foreign wars and occupations. Besides being illegal and criminal, they are just plain stupid and self-defeating. We need to stop arming the imperial Israeli government, which is now trying to kill off democracy in the Gaza Strip, by murdering the leadership of the elected Hamas party.
We need to rescind the Bush/GOP tax cuts on the rich. We also need to slap a big 25 cents per gallon tax on gasoline while the price is relatively low. This money can then go into rebuilding our roads, freeways and bridges.
judyo
· 11 months ago
Bush's tax "cuts" put and extra $16 net in my "pocket" .... state and local taxes went up $22.
Leland Bardsley
· 11 months ago
Actually, I have to disagree with your logic. I think this approach might just work. You see, people don't make rational choices when it comes to their money. Which is why nobody in this country has any savings and they are up to their eyeballs in debt. So, making the tax rebate "hidden" is exactly WHY it may work. As you point out, a lump sum may likely go to paying down debt. That's the "magical" thing about personal finance in this country. Most people don't actually account for what they spend. As personal income grows, personal spending grows. Someone gets a small raise, say 5-10%, they DON'T keep their expenses level and sock away the extra, rather they start spending a little bit more ... and their savings doesn't increase.
So, although it may not be the best thing to do for any given individual, I would expect that a small increase ($20) on each paycheck would in fact boost spending by something pretty close to $20 per person per paycheck.
Finally, do I think the AMOUNT of tax savings will be ENOUGH to fix the economy? Not really. It seems that this may help to moderate the severity of the negative downturn, but a huge stimulus will need to be coupled with the plan.
freshpaint
· 11 months ago
Some of us are self-employed and don't have taxes withheld. I hope to god there's a plan for us too. Many folks have been classified as independent contractors to get around health care costs/minimum wage/overtime etc. inconveniences.
Also, hope this is in addition to extending food stamp programs, WIC allowances, removing the prescription drug "bubble", etc. etc.
And yes, I'd take the 500 bucks and use it to pay off my mortgage (which is now 60 days late, due to unexpected expenses).
John
· 11 months ago
WoW! A whole $20 bucks more every two weeks. Will it work to revive the economy? No. Why? Because state and city taxes are going up in an attempt to offset falling tax revenues. We haven't even begun to talk about the added fees and permits costs that states are going to put into effect. As always when it comes to government tax reductions, they give it to you in your right pocket while picking your left pocket in other taxes and fees. Seems like the more things change, the more they stay the same. But any 6th grader could tell you that.
caphillprof
· 11 months ago
You mail each adult a $500 debit card that is only good for goods and services and expires in 60 to 90 days. Everything else is nonsense.
james
· 11 months ago
Exactly my thought. I hate these gift cards, because you have to use it or lose it, and rarely have I ever used one that I didn't end up spending more. But if this stimulus is to be an incentive to spend, gift cards/debit cards are the only way to go. It isn't that I wouldn't appreciate an extra $20 every paycheck, but that's no incentive to start spending again.
John
· 11 months ago
Here's another way to look at the tax situation. When the Federal Reserve was created in 1913 so was the I.R.S. According to the Constitution there was only to be a tax on business, not on an individuals income. Then again, both parties could care less what the Constitution says and hard working Americans get screwed in the end anyway.
hauksdottir
· 11 months ago
We're looking at REAL unemployment of 20% or more (most of my friends have stopped looking for work after 2-3 years, despite being experienced techy professionals). If you are part-time or minimally employed, how will this help? If you are a contractor, how will this help? I'm disabled, with another cut in Medicare thanks to Schwarzenegger, so this won't help me buy food or medicine. (Note that the first thing old Shwarzzy did in office was repeal the luxury tax on Hummers... California could use that money!)
I'd rather the money was spent on infrastructure, giving people jobs and hope of continued employment. If you fear lay-offs and factory closures, you conserve money. If you are working, you spend it. And if the infrastructure improvements save lives or fix transportation or preserve the environment, we all benefit.
AbbieX
· 11 months ago
I never saw the last "stimulus check". It went to unpaid taxes. To date, no one has ever done a story on how much of the previous stimulus went to the IRS or to pay delinquent student loans. By tomorrow, there will be a certain amount of the previous stimulus still unpaid, because you had to file a tax return to qualify. Let's see, I'm on the lam and have cheated my ex out of several thousand in child support. I'll file a tax return to get my (what was it again $600) and in the process blow my cover ;-) Not likely! So, with this "new" idea, my "extra" $19 every 2 weeks will go to paying my current unpaid taxes (along with the $300/month I currently send)?????. I don't see how this is going to stimulate me into anything. I like the idea of the prepaid "Visa" cards, but after the fiasco after katrina, the government will probably stay away from that program again. A gas use tax is a great idea....btw Ford F150s were the number one selling vehicle in December, but why not $1.00 per gallon. That would only move gas prices back up to $2.50 or so...remember when gas hit $2.50 on the way down from $4.00 and everybody was celebrating?? How about moving the unearned income tax back up? If all you have to do is sit on your a** and make money, then why should you pay the same as us working stiffs?? How about luxury taxes?? You want to smoke?? No problem, that will cost an extra $2.00/pack. Enjoy your cocktails at an extra $1.00 per drink. Pleasure boat licensing?? No problem. RV?? Second, Third, Fourth homes?? Personal aircraft?? We fight to defend our "democracy" when in actually we defend the property of those who have it. The Donald has a lot more to lose than I do if the system goes south. Let him pay for it and skip the $400 hair cuts!
cobblepot
· 11 months ago
This method would not give any relief to self-employed peopple; we do not have paychecks--we pay quarterly taxes, at a very high rate, since no employer kicks in. Self-employed need tax relief even more than wage earners!
GeeWhiz
· 11 months ago
It will just help pay my increase in health insurance deductable!
Gloria Y
· 11 months ago
Not sure that $500 per person will do much, but my suggestion is that we the taxpayers are allowed to once again claim our finance charges on big ticket purchases such as cars, furniture, and other items. Increasing taxes on the 1% who do not pay their fair share is another consideration. Increasing taxes on gas, cigarettes, liquor, and luxuries such as yachts, etc, would help. To encourage spending each of us would have to receive $5-10 K, and that amount is impractical. Pharmaceutical companies, insurance companies, must also be willing to cut their inordinate profit margins and be willing to reduce the cost of medication particularly medication taken by seniors, and the ridiculous health care cost to the public, which would leave more money in our pockets.
Terrible
· 11 months ago
From this post I'm not picking up how this puts ANY money into peoples hands. Nor do I see where the hell the alledged $140 billion "cost" is going! The post says that all that is happening with this plan is that witholding will be lowered. But it says absolutely nothing about any change to the tax rate. What that means is that come next year when you do your tax return you'll either get $500 less in refund or pay $500 more in balance due. In other words no gain whatsoever for taxpayers and no loss whatsoever in tax revenue! So who the hell are they giving that $149 billion to anyway???
ABProsper
· 11 months ago
The economy can't be stimulated into working. Its like trying to run a car by pouring some gas in the carburettor instead of filling the tank. Its "made of fail" if you'll forgive an internetism.
What we need to do is get personal debt down, savings rebuilt , anxiety down (socialized medicine and free college maybe?) and incomes up over a period of several years.
Its a long term process requiring serious questions be asked about the benefits of economic liberalism, the role of government and how wealth is distributed.
Optionally we can retrench to a less money rich society and to a more time rich one. That suggests more social democracy, less military/prison complex ,a shorter work week (32 hours maybe) and a lot of planning well beyond the mental horsepower of our elected and appointed.
kelmerp
· 11 months ago
For many (most?) Americans this would transfer a debt from the consumer to the government, since most consumers already have debt they need to pay off. Since a personal's financial well-being is measured by their relative stress level, and that stress level is somewhat dependent upon their personal debt level, this actually has a good chance of increasing consumer confidence. Even if it's only a mirage, the net effect might jump-start some economic activity. I know it sounds bassackwards, but their kind of thing might help a little.
eaprez
· 11 months ago
How about forgiving my student loans? That will put $300 a month in my pocket immediately!!!!!!!!!!!!!!!
All Comments
Not to quibble, but a check every two weeks for a 52 week year equals 26 paychecks - which means the amount per paycheck is even less...
Even now, just about every cent in my paycheck is accounted for by the time I get it.
Want one?
I wrote previously regarding the foolishness of the 700 billion dollar bailout; a bailout you rightly opposed as well. What the economy requires is indeed a stimulus, but one with a better chance of working. I have alighted on an idea which I think may do just that.
If you recall, during WWII, the gov't issued ration coupons. I was thinking our gov't should issue a similar coupon - but more like actual money with an expiration date. The money coupons could only be used to purchase goods and services, and not used towards debt payments, or debt service.
Sadly, we do have an economy which is 70% consumer spending, and consumers, are simply no longer spending.
As an average Mom in Toledo, albeit, one who follows the economic news more closely than most, I can say that I find it insulting and outrageous, that American citizens are at once berated for their "national failure to save" and further chastised to spend and shop in order to keep the economy humming. I would ask that we at least acknowledge this double edged sword and it's sharp tip upon which we all balance at the moment.
An expiring money coupon, which would be redeemed by the federal gov't once used, would allow American citizens to accomplish the spending stimulus we so desperately need, while also continue to save and pay down the debts that are already crushing them at home.
Sincerely,
Red Dwarf - I would also add that the treatment of the LGBT disturbs me greatly. It's a blow to all of us, straight or gay who understand what the marginalization of one group means - it's sickening - but, while I don't excuse it, I am very focused on the economy right now. I hope we all survive to fight another day.
People who live paycheck to paycheck don't go to the store to buy what they want, they go to buy what they need to survive, and make cuts from there when times are tough. $19 a week would make a huge difference.
Last time I made $325 a week was over 10 years ago, and I know that was a mighty Clinton dollar as opposed to this faux canadian money we have now, but $20 was alot then and alot of people will appreciate the $40 a month. If the cut is only structured to those making under $100k a year it might undo some of the harm or the social security rip off from the Reagan years.
This money will be spent on our mcdonalds economy, and yes the money could be spent more wisely to help state budgets that are being slashed for the most vulnerable, but unlike W's 2 "rebates" (aka cash advances on the public credit card) this one will go into purchases.
The $300 I finally got went to groceries, car repair and items for the house I needed, so yes, I spent mine on necessities, and that money went straight back into the economy. I have no debt, so none of it went there.
Most people I know spent the money because gas was high, groceries are high, daycare is high, etc., etc. People who live from paycheck to paycheck (and there are plenty of them) will actually spend the money for things they're cutting back on, or if it's debt, that's a good thing for them, too.
But do I think it will do any good? No. Only a return of plentiful jobs will cure our ills.
I don't know one person who makes enough money to save it, not in this economy.
Even if I were working (and I've been looking for 3 yrs), $19 would more than fill up the Saturn's gas tank these days and let me buy more groceries.
Most people I know spent the money because gas was high, groceries are high, daycare is high, etc., etc. People who live from paycheck to paycheck (and there are plenty of them) will actually spend the money for things they're cutting back on, or if it's debt, that's a good thing for them, too.
I write:
But in order to be effective, the money has to be spent on something you wouldn't already have bough anyway, even without the money. Meaning, you'd have to buy MORE gas than before you got the check, you'd have to buy MORE groceries than before, etc. It's not enough to say you spent the check on groceries , unless you spent $300 MORE on groceries (or groceries and gays, etc. combined). The real question is, in your overall annual budget, you got another $300 - did you spend more that year because of having received the $300?
We go through this every time, we hit some economic hardship and then hand out tax cuts and rebates with the mantra "for God's sake don't invest or save or pay off debt with this money, blow it on some stupid shit you don't need." Then we wonder why American's are in so much debt.
http://thesebastards.blogspot.com/
"Socking it away in the bank" or "Paying off their mounting debt" are both good things.
When people put it in their bank accounts or pay off their debts, wouldn't that help our economy by improving liquidity?
Or is too small amount (even in the aggregate) to matter?
Anybody?
a big part of the problem is that so many jobs are at risk. how to loosen up credit? How to convince banks that the people who are applying for mortgages/loans will still have a job a year from now? I sure as hell don't know.
Funny. We already got rid of our land-line and cable tv, and don't miss them at all. We watch free movie and tv on the macbook. I now coupon shop for groceries at the cheaper grocery stores (no more Trader Joes, ...wahhhhhh), and the plotting and planning and recipe-hunting has become a family activity. Shop for clothes for me and the kids at Goodwill, and do it like a scavenger hunt....and we find some great things. We now do recycled art projects (currently painting old cds and mounting on a huge piece of foamcore), and having a blast. So, there has been a pretty substantial "silver lining" for my family. I'm not saying it isn't hard and stressful. Just saying that it takes the same amount of energy to make it as fun as possible as it does to be depressed about it, and we made a conscious decision here that seems to be working for us. that being said, if I had an extra $500 bucks all at once, I'd LOVE to buy an lcd hdtv that I could hook up to my computer by wireless. Then we could get local channels and pbs, AND strem movies from my beloved macbook to the tv.
what about a tax credit for vacations......lol....works for me.
It's meant to be short-term aid until the infrastructure stuff kicks in.
I believe it's also meant to be a down payment on a return to a fairer tax policy, which will be instituted when Bush's tax cuts for the rich expire.
(Gotta say: It's weird that the people on the lower end are always worried whether than country can afford this or that, while the rich don't really give a f*ck.)
yeah, that will solve the economy problem. I feel the recovery coming on now.....
That should stop the Starbucks closures.
The major problem is that $140B isn't going to be a big enough stimulus to eat up the slack. You're going to want something about 5-10x as large, happening this year, so there's still lots more deficit spending to be done in the form of investment in public goods. It's this investment that pays off well over the long term, because it enables good economic growth over a multi-year period, and because we're chronically underinvested in this type of goods thanks to years of Republican rule at the statehouse level.
We need to rescind the Bush/GOP tax cuts on the rich. We also need to slap a big 25 cents per gallon tax on gasoline while the price is relatively low. This money can then go into rebuilding our roads, freeways and bridges.
So, although it may not be the best thing to do for any given individual, I would expect that a small increase ($20) on each paycheck would in fact boost spending by something pretty close to $20 per person per paycheck.
Finally, do I think the AMOUNT of tax savings will be ENOUGH to fix the economy? Not really. It seems that this may help to moderate the severity of the negative downturn, but a huge stimulus will need to be coupled with the plan.
Also, hope this is in addition to extending food stamp programs, WIC allowances, removing the prescription drug "bubble", etc. etc.
And yes, I'd take the 500 bucks and use it to pay off my mortgage (which is now 60 days late, due to unexpected expenses).
As always when it comes to government tax reductions, they give it to you in your right pocket while picking your left pocket in other taxes and fees. Seems like the more things change, the more they stay the same. But any 6th grader could tell you that.
I'd rather the money was spent on infrastructure, giving people jobs and hope of continued employment. If you fear lay-offs and factory closures, you conserve money. If you are working, you spend it. And if the infrastructure improvements save lives or fix transportation or preserve the environment, we all benefit.
We fight to defend our "democracy" when in actually we defend the property of those who have it. The Donald has a lot more to lose than I do if the system goes south. Let him pay for it and skip the $400 hair cuts!
Pharmaceutical companies, insurance companies, must also be willing to cut their inordinate profit margins and be willing to reduce the cost of medication particularly medication taken by seniors, and the ridiculous health care cost to the public, which would leave more money in our pockets.
What we need to do is get personal debt down, savings rebuilt , anxiety down (socialized medicine and free college maybe?) and incomes up over a period of several years.
Its a long term process requiring serious questions be asked about the benefits of economic liberalism, the role of government and how wealth is distributed.
Optionally we can retrench to a less money rich society and to a more time rich one. That suggests more social democracy, less military/prison complex ,a shorter work week (32 hours maybe) and a lot of planning well beyond the mental horsepower of our elected and appointed.