Will an economic stimulus package help us during recession?

[Plusiplus]

Don’t forget the future $53 TRILLION social security debt during the next 20 years. That is, every US household now owes the government about $400,000. So far nothing of this has been paid for. Without major cuts in expenses or doubled taxes things won’t look good for the now young ones in the future.

 

[goofyjim]

Don’t forget the future $53 TRILLION social security debt during the next 20 years. That is, every US household now owes the government about $400,000. So far nothing of this has been paid for. Without major cuts in expenses or doubled taxes things won’t look good for the now young ones in the future.

Well we have worked ourselves in a bind here because we borrowed from a Social Security surplus in order to balance the budget. Every pres has been doing that for some time. What a mistake that was. Maybe someone should do some rough calculations as to how much was borrowed and put it back in.

 

[Ridgerunner]

Hmmmmm. Looks like the stock market is underwhelmed by Bush’s “short term stimulus” proposals. Wonder if we’re going to see the DOW below 10,000 in the next few months. Oh, how I hate recessions!

I will also bet Bernanke, who doesn’t have any options that will satisfy anybody, will lower the discount and fed funds rates by no less than 1/2 point. But he’ll be “pushing on a string” from the standpoint of the economy, and I suspect he knows it. He might succeed, however, in improving the returns of the banks that have pretty good “in house” portfolios, which they’ll need because their ability to “leverage” net worth is going steadily downhill, and they’re going to have to depend on “spread” for awhile. But saving the banks is a very big part of his job.

 

[po18guy]

Lowering taxes across the board works every time it’s tried. The downside is that requires politicians to give up some control and place trust in the workers of America. That is why it occurs so infrequently.

Christ’s peace.

 

[SoCalRC]

Tax cuts should be across the board for everyone.

Actually, that is what I proposed, almost everyone pays payroll taxes, but anything based on income tax is already progressive. Even I have to agree with Bush’s Fed Chairman, the massive tax cuts for the wealthy have no measurable effect on the economy other than creating deficits.

Besides, it seems stupid to me to collect money just to redistribute it as the president proposes.

I have a feeling what might be causing this recession is the fear that the tax cuts will expire.

So, massive debt, structural deficits, $100 a barrel oil, and a massive collapse in the capitol supply have nothing to do with it?

 

[SoCalRC]

One thing I would like to see is Personal Retirement Accounts funded from the Social Security surplus. The PRAs would also recieve all other surpluses.

Wouldn’t that be great, the nations largest security net tied to the Stock Market just as the baby boomers retire and we enter a deep recession…

For whoever claimed the ‘surplus’ was a myth, are you calling President Bush a liar? After all, the surplus was the original justification for massive tax cuts. It is easy to get confused, because the policy remains unchanged, only the justifications change to fit the facts.

Also, the GAO and OBM pretty much give the straight scoop.

 

[CentralFLJames]

I hate to rain on every-one’s parade. But not only will economic stimulus fail to help but there is little that can be done economically since the US’s largest export product in the last 10 or so years has been DEBT. The problem is people are not buying it anymore and do not want to be paid a nominal interest rate in a currency that is worth 30% less today than it was just a few years ago in the global community.

Bottom line - we are bankrupted and no one wants to bail us out. The problem is that most foreign markets have invested enormous capital into being the producers to satisfy US consumerism. This is especially true of China. We have thus been in a new form of economic detente that migrated the planet toward self interest by means of economic gain and defocused us away fro ideological differences. That worked for a while. But now we have newly formed multi-national “economic gangs” who are using capital, productivity and production of goods as a way to wage war.

I fear that we have created a global house of cards that will have to fall to reset the entire planet’s economic system. We can expect chaos and conflict arising from that instability. That is not something that is governable nor “stimulable” since emotions are never rational in the presence of panic.

The best thing the US could do right now is to start a MASSIVE re-dedication to shifting this country from a consumer society to a society that serves itself. We need wholesale retooling of our decaying infrastructure, energy independence and if need be rationing. If we are at war (and we are) then we should take the pains now where we ourselves chose to take them rather than become reactive and respond to foreign interests.

It’s simply time to pay the piper and we are in for a massive wealth redistribution. The only thing we can do policy wise is try to protect the dollar (tie it to gold or some system of “value”) and to try to keep the losses internal rather than letting wealth flee to foreigners.

What is coming is going to be pretty bad. “Uncle Sugar” has let all the ants steal the sugar and there is nothing to give for relief without bankrupting our children’s future and shifting the fall to another generation. Morally we have to bite the hard bullet now and perform triage in a fair way for the survivors.

James

 

[Ridgerunner]

Don’t forget the future $53 TRILLION social security debt during the next 20 years. That is, every US household now owes the government about $400,000. So far nothing of this has been paid for. Without major cuts in expenses or doubled taxes things won’t look good for the now young ones in the future.

Just watch. The Congress will increase the maximum income on which social security taxes must be paid. They’ll do that in the name of “saving social security” and “making the rich pay their fair share”. To a limited degree, that will be true, but it won’t bring in all that much because not many individual wage-earners make over $90,000/year, and it only applies to WAGE income. What they absolutely, positively won’t talk about is that doing it also automatically reduces the amount most people who are not now retired, will receive in future benefits. It’s a “stealth benefit reduction”. They did it before, and nobody noticed.

While they’re at it, they will NOT do away with the Estate Tax. Same justification; “soak the rich”. In the next 25 years, the government is going to get more than the social security shortfall from that alone.

There is a trick people can do though, to largely avoid it, and this recession is just the time to do it. But it’s also the time they’ll feel the least able to do it. It’s the last train leaving the station, but there won’t be many on board.

This would all be funny if it wasn’t so awful.

 

[goofyjim]

Just watch. The Congress will increase the maximum income on which social security taxes must be paid. They’ll do that in the name of “saving social security” and “making the rich pay their fair share”. To a limited degree, that will be true, but it won’t bring in all that much because not many individual wage-earners make over $90,000/year, and it only applies to WAGE income. What they absolutely, positively won’t talk about is that doing it also automatically reduces the amount most people who are not now retired, will receive in future benefits. It’s a “stealth benefit reduction”. They did it before, and nobody noticed.

While they’re at it, they will NOT do away with the Estate Tax. Same justification; “soak the rich”. In the next 25 years, the government is going to get more than the social security shortfall from that alone.

There is a trick people can do though, to largely avoid it, and this recession is just the time to do it. But it’s also the time they’ll feel the least able to do it. It’s the last train leaving the station, but there won’t be many on board.

This would all be funny if it wasn’t so awful.

And why pray tell is there a ceiling on how much is subject to the social security tax? Doesn’t that make it a regressive tax?

 

[steveandersen]

Basically it works like this: In my local government, if it has an extra dollar, it starts to burn a hole in its pocket. If its not spent, it comes out of its budget, and whoa for that to happen. I wonder why the county school here wants to tear down a perfectly good structure and build a new one.

Nothing wrong with spending per se
As long as it is spent on something used and useful
Infrastructure is an investment

If your County doesn’t build that new school then the engineer, architect, contractors, and suppliers (and all their employees) suffer a drop in revenue. that is really not a stimulus

So the question is, is a delay or cancellation of spending going to hurt more than the taxes.

Like I said stimulus packages are often zero sum games. It all depend son where the money comes form and where it goes

Actually there is quite a bit of federally owned land that could definitely be sold off.

Possibly
But selling the farm is not always the answer. You would have to compare the long term advantages and costs between sell and holding on to the land.

(Unlike businesses, governments are not out to make a profit. They often have to do things such as preserve open space because the people want it and not because it serves an immediate short-term financial gain.)

Grandma’s SS check should reflect what happens to everyone elses checks during a recession……

Ah, but that is not the deal Grandma signed up for.
She was told that if she contributed all her life then after a certain age she would get a check. To turn around at the end of the game and change the rules is not quite right.
Besides, the elderly are a large, rich, and active political force. Any government that fooled with their checks too much would soon be out on its ear. (Remember all that nonsense a few election cycles ago when it was hinted that they might decrease the rate of increase in SS checks and everyone was shouting from the roof tops “they’re cutting our SS checks!”)

 

[goofyjim]

Just watch. The Congress will increase the maximum income on which social security taxes must be paid. They’ll do that in the name of “saving social security” and “making the rich pay their fair share”. To a limited degree, that will be true, but it won’t bring in all that much because not many individual wage-earners make over $90,000/year, and it only applies to WAGE income. What they absolutely, positively won’t talk about is that doing it also automatically reduces the amount most people who are not now retired, will receive in future benefits. It’s a “stealth benefit reduction”. They did it before, and nobody noticed.

While they’re at it, they will NOT do away with the Estate Tax. Same justification; “soak the rich”. In the next 25 years, the government is going to get more than the social security shortfall from that alone.

There is a trick people can do though, to largely avoid it, and this recession is just the time to do it. But it’s also the time they’ll feel the least able to do it. It’s the last train leaving the station, but there won’t be many on board.

This would all be funny if it wasn’t so awful.

Also, if it is only on wage income then only wage earners should be able to collect social security upon retirement. If they are the only ones who contribute then they should be the only ones to receive.

 

[goofyjim]

Nothing wrong with spending per se
As long as it is spent on something used and useful
Infrastructure is an investment

If your County doesn’t build that new school then the engineer, architect, contractors, and suppliers (and all their employees) suffer a drop in revenue. that is really not a stimulus

So the question is, is a delay or cancellation of spending going to hurt more than the taxes.

Like I said stimulus packages are often zero sum games. It all depend son where the money comes form and where it goes

Possibly
But selling the farm is not always the answer. You would have to compare the long term advantages and costs between sell and holding on to the land.

(Unlike businesses, governments are not out to make a profit. They often have to do things such as preserve open space because the people want it and not because it serves an immediate short-term financial gain.)

Ah, but that is not the deal Grandma signed up for.
She was told that if she contributed all her life then after a certain age she would get a check. To turn around at the end of the game and change the rules is not quite right.
Besides, the elderly are a large, rich, and active political force. Any government that fooled with their checks too much would soon be out on its ear. (Remember all that nonsense a few election cycles ago when it was hinted that they might decrease the rate of increase in SS checks and everyone was shouting from the roof tops “they’re cutting our SS checks!”)

SS checks are constantly behind inflation. They only get an increase based on a prior year’s rate. So to change the rate of increase would be devastating. And while we shouldn’t cut back on the spending for some rural projects we shouldn’t leave the poor high and dry either.

 

[Ridgerunner]

Also, if it is only on wage income then only wage earners should be able to collect social security upon retirement. If they are the only ones who contribute then they should be the only ones to receive.

The benefit one receives is a function of whether and to what degree he/she paid in the “maximum payable”. So, if you raise the “maximum payable”, the top benefit is tied to that, and those who paid in less get less relative to the top benefit.

So, a person who retired in, say, 1970 would receive the maximum benefit if he/she only paid (at a lower rate as well) on about $6,000 of income/year, because the “maximum payable” was at that level. Today, to get the same benefit, one has to pay on around $90,000.00 per year, and the one who only paid on $6,000 but retires at the same time gets hardly anything. If you raise the maximum wage upon which the tax is paid, you automatically lower what everybody below that gets.

Now, the benefits “lock in” at retirement, so that the person who got the max in 1970 gets the max today because of COLAs, but someone who paid in on the same income and retires in 2008 hardly gets anything.

Social security increases at greater than the inflation rate, because its COLAs are tied to WAGES not to the cost of living. That’s one of the problems with it.

Only wage earners are entitled to receive SS retirement benefits. But almost everybody is a wage earner at some time in his life. If a person lived his whole life on investment income, he wouldn’t get SS retirement at all. But let’s say there is a person (and there are lots of them) who has $150,000 in wages and $50,000 in investment income/year. Today he’ll pay SS tax on about $90,000. If they raise the maximum to $150,000.00, he’ll pay it on that. But he’ll not pay any SS tax on the investment income, but he’ll still receive the maximum SS benefit.

So, Bill Gates, who is worth 40 billion or so, but does receive a high salary, will receive more SS retirement than a worker whose “high five” years were less than $90,000.00, even though Bill Gates doesn’t need SS retirement at all, and the other fellow probably does. Now, when you raise the maximum upon which SS tax is paid, the difference gets even greater. The guy who pays on $90,000 doesn’t get the maximum benefit when he reires anymore, and the higher the maximum gets, the less he receives.

People can talk about whatever deal Grandma thought she made all they want, but there’s something very wrong with that picture.

 

[mapleoak]

Ah, but that is not the deal Grandma signed up for.
She was told that if she contributed all her life then after a certain age she would get a check. To turn around at the end of the game and change the rules is not quite right.
Besides, the elderly are a large, rich, and active political force. Any government that fooled with their checks too much would soon be out on its ear. (Remember all that nonsense a few election cycles ago when it was hinted that they might decrease the rate of increase in SS checks and everyone was shouting from the roof tops “they’re cutting our SS checks!”)

Of course, social security is a whole 'nother banana (and a ripe socialist one). But when linked to the notion that if taxes are cut, somebody won’t get a social security check, it becomes worthy of comment.
Also grandma didn’t sign up for it. It was forced on her.

 

[whatevergirl]

I don’t seek for the government to take care of my husband and me–rather, though, I am tired of being taxed so hard. I am in sales and when one is bonused, or receives commissions, it’s taxed at roughly 38% rounding up numbers, much higher than my regular salary. It is part of my comp plan, so for me, I would like to see less taxes in certain industry groups or genres, because it’s not fair that I have to take such a big hit on money that the government lumps into the same category as lottery winnings. That is a gripe I have about taxation, and where they could lower taxes.

But when speaking of economic surplus packages, who would directly be affected? Every time the government has made changes like this in the past-who benefits? Or does it just sound good for an election strategy.

I also live in a state now where there is no state income tax–Florida. Why is there state income tax for example, in PA,where we just moved from last year–and not here? I am curious as to why that is? Anyone know?

 

[goofyjim]

Of course, social security is a whole 'nother banana (and a ripe socialist one). But when linked to the notion that if taxes are cut, somebody won’t get a social security check, it becomes worthy of comment.
Also grandma didn’t sign up for it. It was forced on her.

Oh yes. Play the right wing trump card. Social security is a socialist banana. If it had been managed properly it would have kept on working. If they had not borrowed to pay the general fund and do their strange fancy accounting we would not be anywhere near the mess we are in now as far as Social Security goes. But too many president administrations decided to dip their hand in the till to pay for other things. And they were Republicans and Democrats alike so neither party can claim innocence.

 

[Texas_Roofer]

Don’t forget the future $53 TRILLION social security debt during the next 20 years. That is, every US household now owes the government about $400,000. So far nothing of this has been paid for. Without major cuts in expenses or doubled taxes things won’t look good for the now young ones in the future.

So they will be paid 53 trillion, the question is what will they return in taxes? My guess is ~ 21 trillion. If you do not like that we can increase inflation to reduce the real value of 53 trillion. In the real world both will occur.

 

[Texas_Roofer]

…I also live in a state now where there is no state income tax–Florida. Why is there state income tax for example, in PA,where we just moved from last year–and not here? I am curious as to why that is? Anyone know?

Income tax is one of many methods to fund a government. In Texas we have no income tax so we fund the government through property taxes. Example One brother has a $200,000 house and a family income of $60,000 his tax is $5,000 on the property and zero on the income. His Oklahoma brother has a $200,000 house and a family income of $60,000 his tax is $200 on the property and $4,800 on the income.

 

[Texas_Roofer]

I hate to rain on every-one’s parade……………………

Easy we are not bankrupt, not even close. Our government spends money foolishly which creates fighting about who will pay for this foolishness. It also makes our deficit spending a growing problem because we do not pay the deficit off during the years of good economic growth. Our dollar is falling because we seem obsessed with the Middle East and willing to jump off a bridge rather than listen. So most other nations do not want to hold our hand until we act rational. If we control the world oil supply for the next 20 years we will have great economic power. However long term it is invention, and productivity which determine who has power. The US is great at invention and productivity so we will be fine. We do not have to “Buy American” that is backward thinking, we have make the best and the newest in America so buying American is to own the best.

 

[iamrefreshed]

Also, if it is only on wage income then only wage earners should be able to collect social security upon retirement. If they are the only ones who contribute then they should be the only ones to receive.

Is this what you meant to say?

Every other post I’ve read of yours regarding healthcare, taxes, spending all indicated you support distributed wealth.

Now you only want those who paid in SS to get it?

What about the disabled?