[kenberg]

So I see that we need a stimulus package and that 145 billion or so is being suggested. That works out to around $500 for every man, woman and child, on average. The idea is to keep the economy afloat and so, if this is to work at all, the money needs to go to people who will spend it. So, here is the test, in two parts:
Part 1:
I expect that many of you, like myself, would put the $500 in the bank. which will be nice for us but will not stimulate the economy. So are we OK with giving all or almost all of it to folks more likely to spend it? For example, people with kids who have a family income under the national median (which I think is around 60K but I don't know)?
Part 2:
It would be nice to not drive the deficit further up than it already is. Further, if my taxes had a one time surcharge of, say, $500 I would pay it from my bank account and go on as before drinking my overpriced caffeine at Starbucks. So, would you be willing to fork over $500 to the government to be passed on to the struggling families, simultaneously staving off (it is hoped) a recession while not driving up the deficit too badly?

It's a tough question I imagine, but it appears that there really will be a stimulus package, the shape of it hasn't been decided, and presumably our representatives really will be interested in whether we will still vote for them if the package is of no immediate direct financial benefit to ourselves.

I'll be very interested in various candidates opinions on Exactly where this money should go and, even more interestingly, Exactly where it should come from. I don't expect straight answers from politicians, especially about where it should come from, but perhaps my fellow bridge players would like to speak up?

I don't mean to sound rich and cavalier about $500, I'm neither rich nor cavalier, but the fact is I could pay it and it would not stop me from patronizing Starbucks.

[mike777]

Tax rebates never work. Take a look at 1975 rebate and the various follow up studies.

It won't hurt but won't help. If Bush wants to give the economy a dose of Keynesian, then go for it. Not this half baked measure.

[helene_t]

So the idea is to move some money from the rich to the poor in the hope that the poor will spend more of it so that the economy gets a boost.

One problem with this is that your opponents will say you are a communist.

Another problem is that the poor are not going to spend the money sponsoring your next election campaign, while some of the rich may punish you by sponsoring someone else's election campaign.

Except for that, I'm all for it. Not a miracle cure but better than most other government-finance proposals I've heard of.

[Winstonm]

Let's all hope the recipients don't squander this money on unnecessary things like food and rent - there are cheap, frivilous, unpurchased Chinese imports sitting lonely on WalMart shelves.

[kenberg]

Winstonm, on Jan 19 2008, 05:03 PM, said:

Let's all hope the recipients don't squander this money on unnecessary things like food and rent - there are cheap, frivilous, unpurchased Chinese imports sitting lonely on WalMart shelves.

Here in Maryland the plan is to put in slot machines to prevent the sort of squandering that you refer to.

[Winstonm]

kenberg, on Jan 19 2008, 06:51 PM, said:

Winstonm, on Jan 19 2008, 05:03 PM, said:

Let's all hope the recipients don't squander this money on unnecessary things like food and rent - there are cheap, frivilous, unpurchased Chinese imports sitting lonely on WalMart shelves.

Here in Maryland the plan is to put in slot machines to prevent the sort of squandering that you refer to.

Damn Right! Don't squander it. Put it into action.

[Winstonm]

Quote

One thing I can never work out is, where is the money coming from, future taxes? or are the governments so awash with money they don't have a national debt and all this money is in a bank earning interest

I heard that some guy named Ponzi is backing the whole thing - he's loaded, is what I hear - he may sober up by tomorrow, but for now, he is loaded.

[Fluffy]

To be real communist try this:

nationalice every land and enterprise and everything paying their owners the money they deserve.

next create a 10000% inflation, so money doesn't mean anything.

At this point every man has the same: nothing, and start over .

Funny thing about this is that since there are many more poor people than not poor, there should be a lot of people willing for it to happen.

[Winstonm]

Fluffy, on Jan 19 2008, 08:24 PM, said:

To be real communist try this:

nationalice every land and enterprise and everything paying their owners the money they deserve.

next create a 10000% inflation, so money doesn't mean anything.

At this point every man has the same: nothing, and start over .

Funny thing about this is that since there are many more poor people than not poor, there should be a lot of people willing for it to happen.

I'm voting for Fluffy - only one I know who makes any sense.

[mike777]

Fluffy, on Jan 19 2008, 08:24 PM, said:

To be real communist try this:

nationalice every land and enterprise and everything paying their owners the money they deserve.

next create a 10000% inflation, so money doesn't mean anything.

At this point every man has the same: nothing, and start over .

Funny thing about this is that since there are many more poor people than not poor, there should be a lot of people willing for it to happen.

Finally , a person I can vote for.

Fluffy for head of USA or the United Nations.

[blackshoe]

Andrew Carnegie once said, asked what he would do if he lost his millions "I know how to do it now. If I lost it all, I'd have it back in five years."

[mike777]

blackshoe, on Jan 19 2008, 10:53 PM, said:

Andrew Carnegie once said, asked what he would do if he lost his millions "I know how to do it now. If I lost it all, I'd have it back in five years."

lol he started my company....with a grant/foundation thingy....

I never heard that saying from him...hmm cool can you cite it please.

[Winstonm]

I've always thought this quote showed the most wisdom about the importance of money.

"In the long run, we're all dead." - John Maynard Keynes

[Gerben42]

Quote

Funny thing about this is that since there are many more poor people than not poor, there should be a lot of people willing for it to happen.

But as soon as you are "the decider" you are automatically in a position where you no longer want it to happen. There's the catch.

Quote

At this point every man has the same: nothing, and start over smile.gif.

You'd be surprised how little difference it would make.

[Winstonm]

Depends on your definition of poor. In many industrialized countries, the poor are more of a relative than absolute poor.

I woud define the absolute poor as those who cannot afford the basic necessities of healthful live, such as safe food, clean drinking water, shelter, etc.

For the absolute poor, I would be willing to pay 15% more in taxes if - and a big if - 90% of that could be ensured as direct aid to the absolute poor.

[helene_t]

Spot on, Wayne. Former Danish politician Riskjaer said, when asked whether he gave a flying f**** about the poor: "Yes, I believe it's less fun to make money if people are lying in the street outside your door, starving to death".

He was a promising politician until he went to jail for financial fraud.

[kenberg]

Scep, you are of course right about the limitations of my concern for my fellow man. If I took the money I spent on coffee and wine in a year and gave it away it would probably feed a family, maybe several families since I really like wine, in Africa. I am not Mother Theresa, true enough.

But my test question was far more limited and conceivably could be answered affirmatively by selfish bastards such as myself. If I were convinced that it would help the poor and help the economy (I see Mike disagrees that it would help the economy, perhaps so, I am not prepared to ague the point) I think a stimulus package that gave some money to people, especially families, at the lower end, with some charge to myself (hopefully a larger charge to the many who have a lot more than I have) to keep from worsening the deficit, is something I could support.

I phrased it narrowly with exactly your thoughts in mind. Few of us are willing to give up everything to help the poor. The question was short term: If, in the next few weeks, Congress and the President come together on a stimulus package that takes some money at the upper end, where upper end is not just Bill Gates and Sergei Brin but rather many of us playing online bridge, and gives it to folks at the lower end. would we be OK with that?

Sure I wish that the people who represent us were people I had more trust in. But they aren't all crooks or idiots and with decent leadership this might work.

[Winstonm]

The trouble, Ken, is that we simply cannot trust the poor - why, they are likely to squander this windfall on frivilous items such as rent or food.

[Winstonm]

Quote

all it is for is to appease the whinging rich lobbyists who are worried they may only make 1.9 billion profit not the 2 billion they projected for thier companies

Exactly. And this "downside earnings surprise" will cause their stock price to fall, causing even more grief to the well-heeled. Probably have to give them some more supply-side tax breaks just to stop the whining.

[Codo]

I really love this questions.
And to come back to the original theme:

1. If I would receive an additional 500 € from my governement, I won't spend more money, so this won't stimulate the economy.

2. My governement try to stimulate the economy with all sorts of subsidies. I believe that they would stimulate the economy if they are able to direct theses subsidies to the right receivers. But this is just a fealing, I have no background knowledge, whether this ever happened to have success.

Some further comments: A big school of thinking in economy says that it is great if the governement takes credits to spend money. The more money they spend, the more the economy will grow. And a bigger economy pays more taxes so that they will earn money in the long run. The theory is great, but I lack to see that this works.
I believe that they should spend just the money they have. But maybe I am just old fashioned.