Those are, in an important sense, the same alternative, since both involve letting the failing companies crash and burn. I can understand the desire to let them fail. I share it. What I am curious about is what happens after they fail. What effects on you and me do you see if the bailouts didn't happen? barfo P.S. the problem with giving it to the taxpayer is that we are of a mind to just save it, rather than spend it. So giving it to us might not stimulate the economy.
Congratulations, you have something in common with Jon Stewart. This is what he's been saying the ENTIRE time. He called it trickle-up economics.
Yup. Jon Stewart suggested using the bail out money to wipe out all consumer debt, which I think would have been a good idea. Instead of just giving the cash straight to banks, capitalize them in a way that also gives Americans some breathing room to start spending again.
Who do you give it to? When the last stimulus package went out, the people who got anything aren't the people that paid for it. It also went to people who probably weren't going to utilize it very well, beyond just buying "stuff". IMO, it should go to people that will use it in a way that can have a larger effect that just buying a flatscreen. For example, when somebody buys a house, that person can now greatly leverage their money into something that creates construction jobs, creates manufacturing jobs, and generates property tax revenue for the government. I don't feel that most of the people that received stimulus money were in the position to create this leveraging effect.
The idea was to wipe out consumer debt, so the idea would be to "give it to" all citizens who have outstanding loans or credit card debt. I don't know if Jon Stewart was including home mortgages, though, because he said that it could have been done for the same cost as all the bail-outs, and I don't know if mortgages plus all other debt would come to that. I don't know the numbers. As for "the people that paid for it," if you mean that the "rich" disproportionately paid for it in taxes, but got less than they paid, I'm sure that's true. These types of stimulus efforts tend to have some element of wealth redistributive effect. Hardly new to this country, we're a mix of capitalism and socialism, as is every other democracy in the world. If that's not what you meant, could you explain that further? Property tax revenue is a good point. I'm not sure how the other aspects are more "leverage." If a person buys a flat screen TV, don't they "create" (implicitly) the engineering and (explicitly) manufacturing jobs needed to produce flat screen TVs? Also, explicitly the product distribution jobs, the sales jobs, etc?
What I meant was that people that make above $75k didn't get stimulus money. I'm sure you and I have different ideas of what "rich" is, but to me, making $75k doesn't make somebody rich. I don't remember the numbers, but I did some estimates that the time. I found that for the average person getting the stimulus money, they were getting over half of what they paid in taxes back in that stimulus check. That obviously becomes a subjective conversation on what is "fair" that you and I will likely never agree on. Yes, buying a TV does those things. But it does so with the, say, $1000 you spend. Spend $1000 on a TV, the company gets $1000 to contribute to engineering, manufacturing, etc. However, buying a house is one of the only ways (that I know of) a typical person can leverage their money so heavily. So they spent that $1000 now, but it instantly creates $5000 (assuming 20% down) worth of construction, manufacturing, taxable income, etc.
This thread, in all seriousness, makes me wonder if some sort of economic literacy exam shouldn't be some sort of requirement for both voting and holding political office. What would be the major arguments against something like that?
I agree, that isn't rich. Of course, if the idea is stimulus, it should disproportionately go to where it will be reinvested the most. The wealthier one is, the more likely one is to save the cash in a serious recession like this. The less wealthy one is, the more one is likely to feel that one "needs" to spend to maintain a solid lifestyle. I don't know if it is "fair," but the idea is to try to effect economic recovery, which doesn't necessarily entail disbursing money in a directly fair way but to most quickly get the economy started again to the benefit of everyone. In general, I wouldn't be in favour of such massive stimulus spending, but I think doing it this way would be "fairer" and more effective than sending the money directly to failing banks. Makes sense.
Easy. They buy the flat screen with their credit card and don't pay it off. Tremendous leverage, since the right-now cost is $0. barfo
