Government’s Stimulus Package 4 months later

  • Posted by a hidden member.
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    Jun 08, 2009 6:44 PM GMT
    I would like to know what others think about the Stimulus package now that some time has gone by. For the sake of respecting people’s political ideologies, lets try to focus on is it working, is it a failure, are we getting what was promised types of comments.

    I did not agree with it in the beginning. Not one member of congress convinced me that it was a good idea. The number of jobs created have been tremendously outpaced by those lost. Unemployment is well beyond what was forecasted. I am no more confident that our government knows what they are doing in regards to the economy.

    In my opinion we would be at the same place if no stimulus package occurred and would have a lot less debt on the govt books. Look forward to seeing what others think.
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    Jun 08, 2009 7:02 PM GMT
    A Stimulus like that doesn't work as quickly as four months. In the economic community, from what I have read (and I am not an economist, that is a field of study my brain wasn't made to understand) we will see if it is working by early 2010.

    That said, this is an economic crisis bigger than crappy lending practices and the housing market bubble. The stimulus will be meaningless unless their is meaningful health insurance reform this session. Knowing how that sort of thing goes, I wouldn't expect the full August recess.
  • GQjock

    Posts: 11649

    Jun 08, 2009 8:02 PM GMT
    Oh I don't think really any of the stimulus money went out to the individual states and communities yet

    and as far as not going along with it?
    That's fine ... but if you don't agree with it then you'd have to be fine with
    a completely different economic landscape

    where social security would be likely ineffectual
    medicare would be neither Medical OR Care
    Medicaid would cease to exist and things like roads - infrastructure would likely be on a crisis by crisis basis

    ain't a country I'd wanna be payin' my taxes to
    but everybody has an opinion

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    Jun 09, 2009 12:19 AM GMT
    I know we had different stimulus packages, but it appears that Australia's prevented Australia from going into recession. Yeah, lots of people lost their jobs, but avoiding recession is a very strong psychological advantage for the Australian economy. Ours consisted of a major infrastructure spend and $900 cash handouts to every working Australian and $950 to every student. (And high national debt for the next 8 years)
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    Jun 09, 2009 12:31 AM GMT

    Unfortunately not much of the "Stimulus" package has actually been spent. Less than $60BB at this point. Part of the reason for that is that the Treasury has been unable to float long term debt, i.e., that of 7 years term and longer.

    Having said that, many of our trading partners have begun to slow their rate of stimulus. I'm seeing a good leveling and uptick in Germany of instance. Part of that is due to the fact we (several business of which I own large stakes) make components that are going to China to feed their significant stimulus spending. This is particularly strong in electrical components.

    I also think we are going to see some summer hiring that will have the apparent effect of making the numbers (unemployment ) look better. Perhaps we are approaching a leveling of layoffs with numbers still continuing to be high, but steady at 350,000 lost a month. We will cycle into a period where people drop off the unemployment role and overall numbers will appear lower. I think the real nuber of people unemployed is perhaps around 18,000,000.

    All in all, I will not be a bad year if you are employed or prepared before the downturn.
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    Jun 09, 2009 1:28 AM GMT

    Gross Domestic Product is comprised of many things, including GOVERNMENT SPENDING.

    --I think we had to...sort of make up for the shortfall in GDP that would result from the credit cycle (bubble) coming to an end. There was clearly too much credit outstanding, and the consumer could not handle getting out of debt and spending (70% of GDP is consumer spending) at the same time.

    Here is the reality: Over the last 30 years, debt has been in a secular incline.
    We need to pay this off!!, But now, we need to pay it off WHILE growing organically. Inflation is one way to make it look smaller, but the world is flattening and that story is changing.

    The problem if you ask me is that when credit was easy, businesses didn't really innovate, so the organic growth went out the window in favor of $375.00 denim and a fancy new condo decorated with a new kitchen that was made of foil and particle board cabinets.

    Obama took the responsibility of setting the tone of "we need innovation for growth by tightening the reigns on credit and focusing on things that needed to be done to actually grow, including making sure we have an educated and innovative workforce. Obviously, throwing (cheap borrowed) money at the US only made people consume, not invest. Unfortunately, education, infrastructure, and new technologies will take time, but having the government put this initiative in place as a central piece almost immediately got the attention of those who were spending everything they could because the rates were so low on credit. We now have a saving rate of 4% whereas before it was 0.

    As this unfolds, things will get better, but as they rightly say, it is going to take time.

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    Jun 09, 2009 2:05 AM GMT
    I have not got off my butt and dusted off what remains of the trained economist in my brain to scratch out how much the effect of the US government's stimulus program is being offset by higher fuel prices. My hunch is the effect in Main St will be minimal and the most stimulated geezers in the States will be Exxon-Mobil, et al's shareholders....until maybe the windfall profits tax....
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    Jun 16, 2009 9:26 PM GMT
    And where the hell is the antichrist? Did he not get the memo?
  • coolarmydude

    Posts: 9196

    Jun 16, 2009 9:42 PM GMT
    icon_idea.gif If it took at least 4 months just to begin printing tax rebate checks to everyone, how on Earth does anyone expect $700B in stimulus spending to get started in 4 months?
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    Jun 16, 2009 9:54 PM GMT
    I would definitely say its not working as planned. This graph, minus the actual unemployment figures, are taken from the Presidents own Council on Economic Advisors.


    So based on what they put out, doing nothing could have been better than passing the "stimulus". Is that to say that things could have been worse if it HADN'T passed? No one can say that. That's like saying the stimulus has "saved" 150,000 jobs when 1.5 million have been lost. There really is no accurate way to prove it.
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    Jun 16, 2009 9:56 PM GMT

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    Jun 16, 2009 10:11 PM GMT
    Ah I'm not too sure it'll do much, It was actually supposed to kick stuff up a bit by now when I heard him talking about it months ago, but that hasn't happened, and more people have lost jobs. This thing was created to create jobs, but a lot of the money is going towards a lot of wasteful crap. Like for example, I don't know how spending millions to study why pigs stink, is going to help anyone get a job.

    On top of that the jobs this thing is supposed to create, are only temporary jobs, so the people who do get jobs, will only lose them again later. This is only the first wave of the economic crisis, when that second wave hits us, its gonna be real bad, and we'll have no money because so much of it is being spent.

    If in 3-5 months unemployment gets higher, I wonder what people will say, especially when so many were saying his actions on the economy were the wrong actions.
  • jarhead5536

    Posts: 1348

    Jun 16, 2009 10:17 PM GMT
    This is textbook Keynesian economics. When the economy goes into recession, people stop spending. The government must fill that spending gap by purchasing goods and services, undertaking infrastructure projects and providing direct assistance (tax cuts) to business owners to keep businesses open until consumer confidence raises enough for them to start spending again. We have been doing this for at least a hundred years...