[Vision2020] Vision2020 Digest, Vol 19, Issue 158

[donald edwards]

snips copied from internet
 
Analysis: Not enough, too much, or just what Americans need? 


Useful, but flawed and probably not enough: That, in general terms, was the verdict pronounced on the $150 billion emergency spending plan agreed to by the White House and congressional leaders Thursday in a bid to stimulate the suddenly sputtering U.S. economy. 
 
 
Few economists thought the stimulus plan alone would be sufficient to keep the economy clear of a recession. 

 
 
 
The most fervent proponents of free markets criticized the plan as a damaging intrusion by government that incurs public debt for dubious subsidies. 
 
"The economy is working these things out," said David Henderson, a libertarian economist at the Hoover Institution at Stanford. "We've got the housing crisis and the subprime, and all these things take a while to settle. The government just doesn't have the discipline to kind of let things work out."
 
 

'It's way inadequate' 
 
 
"They gave up pieces of the package that were more effective," said Jared Bernstein, senior economist at the labor-oriented Economic Policy Institute in Washington, who blamed the Bush administration for blocking the expansion of benefits. "It's a political choice, and a bad one. It's an ideology that says, 'I can get a lot more credit for tax cuts than I can for expanding unemployment insurance.' " 
Unemployment among blacks and Hispanics has been rising at triple the rate for whites, while the time it takes for people to find new jobs has been lengthening, according to government data. Some experts argue that by failing to expand unemployment benefits, the plan leaves minority groups most vulnerable to a recession. 
"It's way inadequate," said William Spriggs, an economist at Howard University in Washington. "It doesn't fix the problems we have with the safety net." 
 
 

Goods made in USA? 
But much has changed in recent years. Given that a lot of Americans are so deeply in debt, some economists said, many may use the money to pay off bills rather than to buy new goods and services. "People are already behind on mortgages and credit cards," said Gary A. Hoover, an economist at the University of Alabama. 
Another big factor is that an increasing share of goods sold in the U.S. are made overseas. During the 2001 recession, 18 percent of what Americans spent on food and manufactured goods was imported, according to the Commerce Department. By 2006, the share had risen to 21 percent. 
"A great deal of any stimulus is going to be sent overseas," said Alan Tonelson, a research fellow at the U.S. Business and Industry Council, a trade association of small manufacturers that lobbies to limit imports. 
Peter S. Goodman and Louis Uchitelle, The New York Times 

THE TERMS 
Who gets what: If the plan is approved, individuals who pay income taxes would get up to $600, working couples up to $1,200 and those with children an additional $300 per child. Workers who make at least $3,000 but don't pay taxes would get $300 rebates. 
When: The first rebate payments could begin going out in May, and most people could have them by July. 
Cost: The rebates were expected to cost about $100 billion, and the package also includes close to $50 billion in business tax cuts. 
What's next: The bill will go to the House floor next week and on to the Senate, where some Democrats hope to add elements such as extending unemployment benefits for workers whose benefits have run out. 
 
> Today's Topics:> > 1. Stimulus package (lfalen)> > > ----------------------------------------------------------------------> > Message: 1> Date: Fri, 25 Jan 2008 11:43:36 -0800> From: lfalen <lfalen at turbonet.com>> Subject: [Vision2020] Stimulus package> To: vision2020 at moscow.com> Message-ID: <989fc63a77eb2e9c6d7b236383e4c270 at turbonet.com>> Content-Type: text/plain; charset="utf-8"> > I would like to see an analysis of the Economic Stimulus Package by those who read vision200 who are grounded in economics. I like the idea of tax reduction, but am not impressed with the rebates.> Roger
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