I think a bubble could be avoided or at least lessened by demand-side targeted tax cuts and spending. Bubbles seem to result generally from supply-side policies, such as the Bush tax cuts and the TARP bailout. Basing your policies on supply-side economics is like basing the space program on the theory that gravity repels things. It is exactly backwards to reality.

A public works program, like the one Obama has proposed, is demand-side. I think it's exactly what we need, as opposed to the huge bailout that went to the banks and other large corporations.



In fact, Tom Daschle has been making comments the past week about the importance of a health care plan. I was actually surprised that the Obama team seems to pushing their health care plan to the front burner as a part of their plan to help rescue the economy.

I agree with you that such a plan is vital. It's important that we get these corporations out of the health care business, which is expensive to them and to us.

forgetting about the bank ones. remember they gave out the 300/600, which ended up doing nothing so why would this one work.

Well here at least you can say you get something for it.....( Modernized buildings, That Country-Health-IT-System (I still hope they do it....that sounds a real good idea))...modernized electricity infrastructure etc.

The money for the banks you seemed to be landed in the bank safes (same situation overhere as well).


I have the feeling the Obama plan is easier to control and check for the results.

First of all, they gave out the money about a month ago, so that's really not enough time to see if it worked or not.

But second is that the nature of the bank bailout and a public works program are COMPLETELY DIFFERENT. The bank bailout was supply-side. A public works program is demand-side. Public works programs are what got us out the Great Depression. Supply-side programs tend to cause bubbles and then the recessions that follow.

And, as filmo points out, you're actually GETTING something for your money. New roads and bridges, improved infrastructure, and buildings.

Personally, I'd love to see a stimulus aimed at two things: Tech and Infastructure.

Spend the 2 trillion there, since that's literally the amount needed to repair the Infastructure in this country, if not more. The payroll tax cuts, while I won't complain, won't do a damn thing for the economy.

The two things I've heard from Obama are infrastructure and green energy plants, in addition to fitting federal government buildings with solar panels and other alternative energy measures. Sounds like a good start.

I find it endlessly amusing that the same Republican numbnuts who ran the economy into the ground, who were utterly and completely blindsided by the collapse, insisting for a whole year WHILE WE WERE IN A RECESSION that everything was great and that their policies had lead to economic expansion and growth, these same idiots who were wrong about everything are insisting that we listen to them about the best way to get the country back on track.

I thought your hyperbole might have died down a bit with Obama's win. I guess I was wrong.

Obama's trying to push through the biggest bailout package ever. Perhaps he should listen to Republicans - that way, when it fails, Republicans can share the blame too

Wouldn't be the first time, I'm sure.

Unlike the Bush bailout, Obama's package is demand-side based. And you generate demand by putting money in the hands of the lower and middle class, either by tax cuts/credits or by putting them to work.

Thus far, the Republican objections range from moronic to fatuous. First of all, they have absolutely no credibility on spending. They have been consistently wrong about the state of the economy. Pelosi's contraceptive measure was dumb but an almost inconsequential portion of the budget. Today, Kay Bailey Hutchinson said she was against it because it wasn't specifically allocated by state, which isn't even true.

I'm not saying it's definitely going to succeed, because no one knows that. But if anyone has any better options, they haven't put them on the table.

How is your top line true? and anyway, it sure didn't work.

Bush gave out the 600/1200 rebates to the people at a cost of 150,000,000 which did nothing and then their has been 2 long extensions for unemployment, costing ????????, which again has done nothing to solve any problems.

The rebates were not part of the bailout I was referring to, but fair enough.

The problem with the rebate is that it simply wasn't enough. $600 isn't going to increase your buying power for goods by very much. Ditto unemployment which basically just keeps you afloat, although I'm all for extending it and for the tax credits. But it does nothing to help people who are out of work and whose unemployment has run out, the volume of which grew by millions under Bush over the last two years, or those who don't pay federal income taxes, which is much of the working poor.

You have to put these people to work.

well since the 1970's, we have had alot of ups and downs as a country - more or less, 50/50. so maybe with the increased baby boomers and everything else that is happening, maybe we as a country have to cut back in general.

I don't know what the answer is but America spend so much $$$ on the world when we have so many unsolved problems at home that haven't been addressed in decades and are at a boiling point. ???

I think that depends on if you mean cutting back in the federal budget or our personal purse strings. I think most of us are cutting back as a matter of necessity.

But I think that the federal govt has little choice now but to spend money to generate demand within the economy. There are other things as well, but that's a big part of it. I wish it weren't the case, but it is.

UPDATE: The house has passed Obama's stimulous package.

http://money.cnn.com/2009/01/28/news/ec ... tm?cnn=yes

Obama denied by House!

>>> Also I don't understand this as this seems like seems like such of an easy thing.

SO Does 1 just vote opposite the other. Like here the Senate passed so the House has to vote the other way????

From TV Guide
House Defeats Bill to Delay Digital TV Transition

The House of Representatives has rejected a bill to postpone the digital TV transition. The decision comes two days after the Senate voted to move the date from Feb. 17 to June 12.

Fearing too many Americans are unprepared for the changeover, the Senate unanimously passed a bill Monday to allow viewers more time to subscribe to cable or to purchase a digital converter box. President Barack Obama requested a delay earlier this month after the government-sponsored program providing coupons to offset the cost of a $40 converter box maxed out its budget. The bill's defeat is the first setback for the Obama administration.
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I opposed this delay and am glad it was defeated, but what does it have to do with the stimulus plan?

Just a sidebar on Politics.

And if this was such an easy call not to postpone it, what do you say about Obama favoring it.

Why not just create another thread. It's not really related to the stimulus.



The House and Senate split on the decision so it wasn't that easy of a call. I understand where Obama is coming from, addressing the concerns he's heard from people who aren't yet ready for the transition.

But my take is that they've had 3 years to get ready, and free assistance from the government for converter boxes. If they're not ready now, then 4 months isn't going to help them and this could end up being delayed indefinitely.

I'm pretty certain the bailout will fail, both at stimulating the economy (the problem is not local to the U.S., and there is no reason to believe that a localized bailout will make that much of a difference to the rest of the world) and at pushing projects through that are dear to the liberals' hearts (we can already see the opposition the package is getting from some liberals due to this).

What's an alternative? Do nothing. Let the economy go into a deep recession for 3-4 years. It's painful, yes, but it's the medicine that you sometimes have to take - not every recession can be mild. Otherwise we are risking the collapse of the entire system, by taking too much debt too fast.

which screws future generations

but as politicans only care about their years in office, they love doing anything now without thinking about the future.

Painful for whom? Not the ones responsible, surely. Millions upon millions of the poor and middle class will be out of work. They're the ones taking the medicine for everyone else's mistakes. Meanwhile, opponents of doing anything will bitch and moan about the government handouts that must inevitably go to these people in the form of welfare, food stamps, public housing, and health care.

History has shown that government spending (the right way) can and does benefit the economy by creating jobs and creating demand. It's not a panacea, obviously, but it should provide some support over the course of that 3-4 years that helps sustain the bottom half of the wage earners.

The need for deficit spending sucks. It certainly would have been helpful if Bush had not blown a $5 trillion hole in the national debt, making the spending a lot more difficult to do practically and politically. But not doing anything now would be making the same mistake that was made in the early 1930s when the government was more interested in balancing the budget than fixing the economy.

Krem is right that this is also a global problem, but that doesn't mean that inaction is the right solution, screwing over the poor and middle class as a way of righting the ship.

History offers very flimsy evidence to this. But let's say you're right; let's say the government can increase demand, generate jobs, etc. Is it really worth a trillion dollars? How much of those funds will be wasted on bridges to nowhere? How much of them will go to finance even more rampant consumer spending that puts the people further into debt?

Does it at all worry anyone that we are pushing yet ANOTHER bailout package worth 10% of the American economy in less than 6 months? And again we are offered an alarmist excuse of "if we don't do it now, then all hope is lost"?

Doing nothing here is not a copout; it's a legitimate course of action.