Here's a simple explanation of the massive stimulus bill that will soon be enacted by Barack Obama's incoming administration.
Every man, woman and child, from the 104-year-old woman with Alzheimer's in the managed care facility nearby to the baby boy born 5 minutes ago, will take out a loan for $3,000 from the Bank of China and hand that money to Barack Obama, Nancy Pelosi and Harry Reid, people who have no experience in the private economy.
That will solve all of our problems.
I disagree.
ReplyDeleteYou forgot Ben Bernanke, the Fed chairman and Timothy Geithner, Obama's presumptive Secretary of the Treasury.
And don't forget Bush and Paulson. They've got about a month and a half to spend what we have left and they're trying to make that goal.
Yeah, I agree, as I just said, with the Yves Smith line of argument. I'm still pro Obama because he's smart enough to reverse course if he hears sound advice. (Seriously, would McCain really know which way was up in this situation? Economics wasn't his "strong suit." Read: CUTTING taxes is no better on the deficit & balance-of-payments front than a stimulus is. It's just another punt.) But I don't think the old school in the Democratic party, who are going to the President's advisors, are really capable of breaking with their own orthodoxies. (At least I haven't heard evidence of this. Summers and Rubin protege Geitner? They're social climbers.) I wonder who is close enough to wise him up to the fact that this isn't going to be another New Deal. (Because we're broke.) Other people have said it better -- try self-promoters like Peter Schiff. Look for his video on CNN about the auto bailout. He's a slick guy, and a dogmatic Ron Paulite, but I do believe he's right down the road. Elsewhere, I think he said we're in for it this time because we now have neither the household income, nor the domestic industrial capacity, to be able to afford the stuff we've always relied on as a growth model in the past. (He's talking about the offshoring model of growth.)
ReplyDeleteGreenlight, cutting taxes has one enormous advantage over stimulus spending. It doesn't require an experienced staff of contract administrators, lawyers and performance oversight personnel to do it.
ReplyDeleteCutting taxes also provides work for tax accountants and programmers, because it helps keep people confused enough about what they actually owe on taxes *this* year that they have to hire outside help.
ReplyDeleteI have a friend who is a programmer for one of the companies that does tax software and handles electronic filing for tax preparers. He calls changes to the tax code "Accountant and Programmer Full Employment Acts".
Personally, I would prefer the government to just pick a reasonable rate of taxation, and *stop messing with it*. While companies hate high tax rates, they also hate uncertainty, and all this mucking around with the tax code just makes long-term planning that much more difficult. And I, personally, would really appreciate it if I could calculate some years in advance what my tax bill was going to be, rather than having it come as a surprise at the end of each year.
The captcha words seem to be getting longer. This time I got
"goguglos"
Tim, please keep your goguglos to yourself!
ReplyDeleteFor that matter, no more of these reasonable and intelligent comments from you! What do you want, the entire Congree to be unemployed after they pass a budget? They need to be kept busy fiddling with things like tax laws.
Chris, I'm quite in agreement with you about Bush and Paulson. I'm not a big fan of tax cuts paid for by loans from China. It's the equivalent of a payday loan.
ReplyDeleteTwo thoughts:
ReplyDeleteWhat do I care about a loan? I'm being taught through all this that there's no need to repay any loan you take out.
Second: Fair Tax. Put all the programmers and accountants out of business!
Anon, can I borrow that concept?
ReplyDelete:-)