Monroe Chat

Obama cannot rule out the idea of a 2nd Stimulus Bill.... They have conceded that the 1st one is not working and have learned from the 1st one and will make the 2nd one better. Unemployment is on the way to 10% folks!!! Also I will not support another stimulus bill and this the Health Care, Cap and Trade could be the trifecta to send our economy and country into total collapse.... Sad times and not what I signed up for!

The first one was a payback to all the people who got him elected. So I say the next stimulus will be the first one. I'll bet they are still reading what the 1200 pages said. The market certainly didn't like the news about more borrowing.

These policies are all proven formulas for permanent hard times. The only proven method to bring us out of this is riduculed by the Democrats. Lower taxes and less Government. The savings rate is at a 15 year high! The old saying, "save your money, hard times a comin" hasn't escaped the populace!!

ACTUALLY, this would be the third one. One was passed under Bush and the second under Obama. I love how the media seems to have forgotten the first round. Just keep printing that money.....just think of all the jobs being created with the printing....have to have paper, ink, transporation for supplies and end product, etc. OH WAIT!!! Is that jobs created or saved???

Posted Jul 14, 2009 09:26am EDT by Joe Weisenthal in Media, Newsmakers, Recession
Related: ^DJI, ^GSPC, SPY, DIA, XLF
From The Business Insider, July 14, 2009:

Mort Zuckerman (of all people) has an op-ed in today's WSJ explaining why the jobs situation, which is quite clearly horrific, is even worse than you think.

Here are his points, condensed

185,000 workers in the June number were the product of statistical sampling, but could not be verified by the government.
Companies are asking employees to take unpaid leave.
1.4 million unemployed workers weren't counted because they're not searching for work.
Part-time employment has doubled to 9 million.
The work week is 48 minutes shorter than when the recession began.
The number of long-term unemployed (4.4 million) is at an all-time high.
There were no wage gains in June.
The goods-producing sector lost over 223,000 jobs just in June.

When business picks up, businesses will just add hours to existing workers, rather than create new jobs.
Old business lines are being eliminated entirely, not shrunk down, decreasing the odds that the unemployed will be able to find work.
Says Zuck: It's time for a serious second stimulus -- not a hodge podge of pork and transfer payments, but a truly big and bold infrastructure program (like what we were promised the first time, but which didn't happen) to put people to work.

Pointless to repeat failed stimulus
By Kevin Hassett • Bloomberg News columnist • July 13, 2009

The Obama administration began to prepare the ground for another stimulus package last week, amid countless signs that the first one isn't working

While the president's favorite partisan economists held hands and chanted in unison from the Keynesian prayer book, Warren Buffett captured the mood of the American people when he said that the first stimulus package "was sort of like taking half a tablet of Viagra and then having also a bunch of candy mixed in."

The simple arithmetic of the February stimulus suggests that Buffett got it wrong. It wasn't half a tablet of Viagra with candy; it was a tiny dose of a mysterious herbal remedy, with a stick of sugarless gum.

The so-called American Recovery and Reinvestment Act allotted $787 billion, divided into two main parts. The lion's share, about $499 billion, was devoted to Keynesian-style government spending measures. The remaining $288 billion took the form of tax relief.

The academic literature says definitively that higher government spending will provide at least a modest economic stimulus. Critics of the idea that government spending can provide a valuable countercyclical boost point mostly to the fact that it takes a long time for such spending to take off.

So if the government-spending side of President Barack Obama's stimulus isn't working yet, it must be because the spending hasn't happened. The numbers bear that out.

The Recovery Accountability and Transparency Board, self- described as the "watchdog for the American public on the use of Recovery Act," tracks the status of stimulus efforts and publishes its results on the Web site recovery.gov.

According to the latest data on the spending side, $174 billion has been "made available" and about $60 billion has been "spent."

Of the $60 billion, roughly $13 billion was simply mailed to seniors by the Social Security Administration as a one-time payment. That money should really be thought of as being similar to tax relief, which we will discuss in a moment. Another $40.5 billion went to the Department of Health and Human Services, which mainly provides grants to state governments, which themselves have trouble spending money in a timely fashion.

That leaves a measly $7 billion in funds that best meet the definition of emergency stimulus. It is impossible that such a small amount had any effect on the economy.

On the tax-relief side, the biggest component is the Making Work Pay credit. It provides $400 to individuals and $800 to families by reducing the withholding amount in workers' paychecks. The Internal Revenue Service adjusted withholding tables in late February and required companies to enact the change by April 1.

Keynesians hope that such payments will stimulate consumption. Critics dating back to Milton Friedman argue that individuals will save rather than consume much of the money. The data are now in, and a clear spike in savings occurred just as the stimulus checks began arriving. The spike is larger than even the most pessimistic economist might have expected.

According to the most recent Bureau of Economic Analysis figures, personal saving reached 6.9 percent of disposable personal income in May, up from 5.6 percent in April and between 4.1 and 4.6 percent during the year's first quarter.

The spike in savings was bigger than the stimulus. It might be that almost all of the stimulus money was saved.

So the stimulus bill had two parts, and neither has succeeded. The government-spending part has yet to occur, and the individual-tax part appears to have been saved. That's a big reason why the economy still stinks.

Fixing the economy may well be necessary and may well require policy changes. But another stimulus plan like the last one would be a recipe only for a bigger deficit. Given how little of the medicine has made it to the patient, it is appalling that anyone might have the temerity to call for more of the same.

Kevin Hassett, director of economic-policy studies at the American Enterprise Institute, is a Bloomberg News columnist. He was an adviser to Sen. John McCain in the 2008 election. Contact him at khassett@bloomberg.net.

Simple solutions, abolish capital gains tax, reward capital investment. Those two items alone will go a long way to stimulating the economy. People with money will spend it or invest it if they will not be thrashed by the IRS. I have thought for a long time that doing away with all income tax is the way to go and charge a sales tax leaving certain items tax free. For example, primary home, one car per licensed driver in a household, medical needs, educational needs and groceries to name a few. They could charge a low rate and collect more in the long run. All persons spending money, legally or not would be paying into the pot.

The way the State government is being run we seem closer every day to the united states growing by 88 more states. We could soon have the state of Warren, the State of Butler, The State of Hamilton in addition to the State of Kayos......

Bob.....that would make too much sense. Why would they want to do that?? Then we'd expect them to actually think things through.