WWYD to save the economy?

[Gaspar]

What would you do to stimulate the economy?

Here are the rules:
It's January of 2009. 
You are the president. 
You are writing a stimulus package.
Your goal is to turn the worm in 12 months or less.
You are giving a brief address to the American People outlining your proposal.

Go!

[Conan71]

What would you do to stimulate the economy?

Here are the rules:
It's January of 2009. 
You are the president. 
You are writing a stimulus package.
Your goal is to turn the worm in 12 months or less.
You are giving a brief address to the American People outlining your proposal.

Go!

I will print a bunch of money and throw it into the economy based on the recommendations of lobbyists and special interest groups.  It will create or save millions and billions of jobs.

What did I win?

[Gaspar]

Here's my speech as President Gaspar (no fainting please).


We are at a crossroads.  There are many directions we can travel.  Some of those will lead us to prosperity; others will take us deeper into despair.   The choices we make now will determine what road we take.  It is meaningless for us to play the blame game.  There is nothing in the rear-view mirror that will help us move forward.  Our focus needs to be on the road ahead.

We intend to pass legislation that will stimulate our economy, and pull us out of this decline.  In doing so, I offer this warning to my colleagues in Congress.  Now is not the time for politics.  I will call out any member of Congress who uses this crisis as a platform to pass unrelated measures or sneak in earmarks designed only to benefit his or her constituency.

I will veto any bill containing even a single strip of bacon.  Again . . . Now is not the time for politics.
 
First:  We must get money back into the hands of private industry.  There will be no more financial bail-out of banks, but there will be a 200 Billion dollar guaranteed loan program through the banks for private businesses and entrepreneurs.  These loans will carry very strict restrictions, and banks that fail to comply will lose eligibility.  Private Banks need to be our partners.  Doing so will help everyone to prosper.

Second:  We have hundreds of billions of dollars in federal programs.  We can argue their validity at another time, to do so now would be to engage in politics, and as I said, this is not the time for politics.  We will continue to fund all programs at their current levels.  But. . .There will be no new programs this year.  That's right Congress; you will have to go "cold turkey" for the next twelve months.  We simply cannot continue to pile layer upon layer of debt on a nation struggling to survive a recession.  Once our recovery is realized we will evaluate the merit of new programs.

Third: Our military spending is disproportionate.  For the next twelve months there will be no increases in military spending.  No emergency measures.  We will continue to fund our existing operations as needed, but, from our commanders, I want recommendations to decrease military spending by 10% over the next twelve months and, if necessary to continue to reduce it by a maximum of 15%.  We need a strong military to continue to fight for us, but we also need to fight smarter.  We are too quick to become involved as the world's police force.  Our allies overseas need to know that we support their efforts towards democracy, but we cannot continue to fight their wars.

Fourth (and finally):  You, the American citizen.  You are spark.  You create the inovations that make this economy run.  We live off of your triumphs, and learn from your mistakes.  It is you who is responsible for where we choose to go.  It is your shoulders that we each stand upon.  The federal government is your servant, but nothing more.   We speak for you so that the world may hear, but the words are yours.

Your pockets contain bills and coins, each with the face and the stamp of government.  This is a contract between us.  A contract we often fail to keep.  For the next twelve months we owe you.  I am proposing a 5% across the board cut in income tax.  This will put an average of $1,000/yr back in your pocket.   For those of you who own businesses, this may mean more money to hire workers, or bring products to market.  For those of you who live from paycheck to paycheck, this may mean more food on the table for your family.  For those of you with no paycheck, this opens up a world of opportunities as businesses put this money to work creating jobs. 

Again I reiterate;  the time for politics is past.  There are no Democrats, no Republicans.  There are no liberals or conservatives . . . and lobbyists are invited to sit this one out.  Now that you are armed with an understanding of what we intend to do.  Now that you know the direction we have chosen to take, move forward, and be profitable.  Plan for growth, develop, design, innovate, and engage.

[nathanm]

You know Gaspar, that's eminently reasonable. Not exactly what I'd do, but also not blindly ideological.

What do you think about the $30 billion small business lending pool presently being resurrected in the Senate that Republicans are lining up against?

[Gaspar]

You know Gaspar, that's eminently reasonable. Not exactly what I'd do, but also not blindly ideological.

What do you think about the $30 billion small business lending pool presently being resurrected in the Senate that Republicans are lining up against?

Don't know enough about it, but I'll research it.  I think for starters it's too small, but we've blown our wad on a garbage truck already, so it may be better than nothing.

[Conan71]

Don't know enough about it, but I'll research it.  I think for starters it's too small, but we've blown our wad on a garbage truck already,

That's the best I've heard it put yet...

[nathanm]

Don't know enough about it, but I'll research it.  I think for starters it's too small, but we've blown our wad on a garbage truck already, so it may be better than nothing.

Watch out for falling "bailouts." 

[Gaspar]

That's the best I've heard it put yet...

My dad calls it a "collective congressional fart," because it was composed of all the colonic air that congress had been holding in for the past decade.

[custosnox]

I think my speech would be as follows:

"Quit being a bunch of pansies and go spend some damn money."

Probably a good thing I'm not president right now.

[swake]

First off, our current debt, it is high, but not terribly high no matter what the talking heads say on TV. We are not close to dangerous levels, yet. Debt is secondary for now.

First of all what I would do it what was just done, as a stimulus package and economic stabilizer,  extending unemployment benefits is a big deal. First off it's a direct transfer of cash to people that are going to spend the money immediately so the money rolls over in the economy quickly. What's more, it's going to have an ancillary benefit of keeping homes occupied and out of foreclosure. It's like the stimulus checks that Bush II was so fond of, except even better because the people getting this money really need it and aren't going to save it or pay down debt and are unlikely to spend it on a single big ticket item that may well be imported.

Next, the housing vouchers really helped, I would be in favor of continuing those for another year. I would lift the moratorium on drilling in the gulf so long as the companies accept and pay for additional drilling oversight,. We went decades without an accident and there's a lot of economic output idled there. Plus we really don't want to see energy prices start to float up due to less exploration. Infrastructure spending on things like roads is good too, we should spend some real money here. It's not as good as the cash transfers to people who you are pretty sure are going to spend the money immediately (the poor) like what extending unemployment will do. The issue here is that construction isn't as labor intensive as it was years ago and a good deal of the labor is immigrant labor. There is a big long term economic upside to infrastructure improvement but that can take years and years to be realized so in order to keep as much money as possible spent on labor on infrastructure projects in our economy we should tax all money transfers going out of the country. I would also in a targeted fashion extend parts of the Bush tax cuts for at least another year, again tax cuts are not immediately stimulative, but it would calm people by showing that big tax increases are not on the way. We need to keep with our renewable energy plans, this is not really very short term simulative but long term it does two huge things for the economy, one, it depresses the demand for fossil fuels depressing their prices and also lowers the amount of money we ship overseas to buy those fossil fuels.

Lastly, and maybe most importantly we really have to pressure China to let their currency float and Europe to clean up their banks.

[Gaspar]

Swake,
None of that will grow the economy.  That's a few little tweaks, sprinkled with a little "shut the hell up and spend your unemployment." 

I actually feel worse about President Swake after reading that.

I know you're a lib, but their's got to be something besides the Pelosian "Unemployment is Stimulus" model to work from.   Promising people that they can become wards of the state is not very stimulative, and "the poor" need jobs, not handouts.

[swake]

Swake,
None of that will grow the economy.  That's a few little tweaks, sprinkled with a little "shut the hell up and spend your unemployment."  

I actually feel worse about President Swake after reading that.

I know you're a lib, but their's got to be something besides the Pelosian "Unemployment is Stimulus" model to work from.   Promising people that they can become wards of the state is not very stimulative, and "the poor" need jobs, not handouts.

You are misunderstanding, it's not about the people on unemployment, it's about getting cash into the economy quickly with a high likelihood of it being spent quickly and locally. Jobs will come from that money turning over in the economy. We don't have a lack of capital in the economy or a lack of available credit, companies now have huge stockpiles of cash and banks are reporting lackluster earnings because they don't have enough borrowers. we have a lack of spending going on, both by individuals and companies. A further tax break is not going to change that.

[nathanm]

Unemployment benefits are stimulative, in that without them, the unemployed would have zero income. It's a good immediate stimulus, but not something that is sustainable in the long run, obviously.

[guido911]

You are misunderstanding, it's not about the people on unemployment, it's about getting cash into the economy quickly with a high likelihood of it being spent quickly and locally. Jobs will come from that money turning over in the economy. t.

Wasn't that what was tried with the first mega-stimulus? Where are the jobs?

[nathanm]

Wasn't that what was tried with the first mega-stimulus? Where are the jobs?

Rebuilding the IDL, in state government, planning and implementing high speed rail in several states, and elsewhere.

On that one, Obama foobared up. He should have agitated for a much larger stimulus, one which would have had a more visible impact. Part of the problem with the stimulus that was passed is that half of it was tax cuts, which people promptly saved. That made the stimulus have less effect on the economy compared to its supposed size, thus leading to your question.

BTW, the stimulus wasn't "mega" in any sense of the word. It was about 5% of 2008 GDP, and as I mentioned before, between a third and a half of it was tax cuts.