fiscal policy

[sandgk]

Originally Posted by NorthShoreBuck

sandgk

If taxes are raised will the businesses pass on the higher cost, reduce hiring, cut purchases? Will people paying higher taxes buy less? Does this spike inflation and drive the economy further into a recession?

I realize the deficit is being funded by a printing machine and we will pay the costs eventually, I just wonder what happens if we do x, raise taxes, or y not spend money that may not provide a benefit. Some will say any money spent ends up stimulating some part of the economy. Is it enough, is it in the right places?

Actually all those questions are reasonable and all of them have crossed my mind.

Like you though (I think) I cannot say there is a clear answer to any of them. But, I believe it is fair to say that what we actually have in hand here, with the Stimulus Bill as constructed, is a fish and fowl melange. Part Keynesian, part tax-cut. Maybe that will work, maybe neither can work. Maybe the spending does the trick and the CBO more weakly scored tax cuts (not going to lower income) will be the poster child for poor investment. The closest model we really have for what we are facing is, in my view, the '30's - though with some controls remaining (Insurance on Deposits, the remains of our social safety net, etc.) that provide a different landscape. Still, the true answer to getting GDP moving back then was to spend - but it was also the case that tax rates were increased.
Now it seems we still want to hear the piper play, but are not willing to pay for that tune.

Like you ask:

Is it enough, is it in the right places?

None of us really know, and that applies not just to whether or not to tax, but also to the Stimulus Bill - but I sure hope the current Bill is more than enough, with most of it in the right places (as far as spending goes). Now, we have to see if it is appropriate to not merely NOT raise taxes (rather we'll cut them) and simply kick the can down the road by adding to our debt.

[jimotis4heisman]

Congress Turns to Budget Bill - WSJ.com

WASHINGTON -- Two weeks after passing a $787 billon economic stimulus plan, Congress returns next week to take up another spending bill, this one with a price tag of $410 billion.
Unlike the emergency recovery plan rushed through Capitol Hill in a matter of weeks, this covers the regular functions of government, from education to agriculture. It is leftover business from the final weeks of the Bush administration, and belatedly sets a formal spending plan for fiscal year 2009, which began Oct. 1.



The "omnibus" bill would increase discretionary spending -- funds for programs that aren't benefits like Social Security and Medicare -- by 8.7% over 2008. "This would be the largest increase in discretionary spending since at least 1978 -- with the exception of a 10% boost in 2002, shortly after the Sept. 11 attacks -- according to figures from the White House Office of Management and Budget.
President Barack Obama and congressional Democratic leaders boasted that the stimulus bill had no "earmarks," or special projects inserted by lawmakers for their home areas. In contrast, the new spending bill will have billions of dollars in such projects.
The vote on the new budget comes as lawmakers are still confronting voter anger over a $700 billion financial-services bailout. Also, Mr. Obama plans to deliver next Thursday his budget blueprint for fiscal 2010. On top of all that, the administration is expected to ask Congress in coming months for additional war and bank-bailout funding.
...
Taxpayers for Common Sense, a nonpartisan fiscal watchdog group, has listed several thousand earmarks in bills that have passed a subcommittee or full committee and are being combined into the final version. Among them, for example, are $425,000 for Aultman Health Foundation in Canton, Ohio, to buy technology and equipment; $540,000 for Children's Memorial Hospital in Chicago to improve its facilities and buy equipment; and $300,000 for the Discovery Center in Boise, Idaho, to mount exhibitions and conduct outreach.
Democrats say the total price tag for earmarks in the omnibus bill is a little under $4 billion, about 1% of the bill and significantly less than in years past

continued...

[jimotis4heisman]

The Columbus Dispatch - News

WASHINGTON (AP) -- With one of their own in the White House, Democrats in Congress are moving to give domestic government agencies 8 percent more money, on average, to spend this year atop the whopping $787 billion in economic stimulus funds.
Just a day before President Barack Obama gives Congress a blueprint for the upcoming 2010 budget year, the House is taking up a massive $410 billion spending bill wrapping together the budgets for a dozen Cabinet departments through next September.
The big increases - including a 21 percent boost for a popular program that feeds infants and poor women and a 10 percent hike for Section 8 housing vouchers for the poor
...
Taxpayers for Common Sense, a budget watchdog group, counted 8,570 pet projects totaling $7.7 billion inserted into the bill by lawmakers. The so-called earmarks include $22 million for an addition for the John F. Kennedy Presidential Library, dozens of grants to states and counties to battle methamphetamine, and a new $250,000 siren for St. Paul, Minn.,
...
House Republican leaders attacked the bill as excessive, especially on the heels of the giant stimulus package, which provided $311 billion to many of the same agencies.
...
Generous above-inflation increases are spread throughout the House bill, including a $2.4 billion, 13 percent increase for the Agriculture Department and a 10 percent increase for the money-losing Amtrak passenger rail system.
Congress also awarded itself a 10 percent increase in its own budget, bringing it to $4.4 billion.
...
Including the stimulus package and lower tax revenues because of the recession - plus about $50 billion that Obama is expected to seek from Congress to pay for continuing wars in Iraq and Afghanistan - the White House is projecting this year's budget shortfall to be $1.5 trillion, compared with a previous record $455 billion in 2008.
...
They also cut a few Bush priorities such as the Millennium Challenge Corporation, which funnels aid to countries that adopt democratic reforms.
...
The bill also contains a host of provisions aimed at reversing Bush-era policies, including making it easier for people to visit relatives in Cuba and shutting down a controversial program that allows some Mexican trucking companies to operate freely throughout the United States, instead of only along the U.S.-Mexico border.
...
The bill is H.R. 1105.

[jimotis4heisman]

Federal Budget Deficit to Hit $1.75 Trillion, Includes $250 Billion Placeholder for Bank Rescue - WSJ.com

WASHINGTON -- President Barack Obama's budget blueprint, due out Thursday, provides the government an additional $250 billion if it needs to stabilize banks and the financial system, according to a senior administration official.
Overall, 134-page budget outline spells out health, tax, energy and priorities which would push the federal budget deficit to $1.75 trillion this year, the official said. The official spoke on condition of anonymity because the budget won't be released until 11 a.m. EST.
...
The White House projects a $1.75 trillion deficit for the current fiscal year, which ends in September. That will be more than triple the previous record -- $455 billion. As a percentage of gross domestic product, the 2009 deficit would hit 12%, a level not seen since World War II.
Mr. Obama pledged this week to halve the deficit by the end of his term in 2013, to $533 billion. At that time, the budget gap will be around 3% of GDP, the official said.
...
For "overseas contingency operations" -- the cost of the wars in Iraq and Afghanistan -- the budget will include just over $140 billion for fiscal 2009. Some of this already has been appropriated under the Bush administration's request a year ago. The budget will include $130 billion for the wars in 2010, and $50 billion a year for the remainder of the next decade.
continued...

[jimotis4heisman]

Congress Approves $410 Billion Omnibus Bill on Top of Stimulus - WSJ.com

...
The vote on this "omnibus" bill gives federal programs an extra $32 billion to spend for the seven months left in this fiscal year. And because these increases get added to the spending baseline in setting future budgets, Congress is adding an estimated $108 billion more in outlays over 10 years.
...
There's another reason Congress wants to pass this omnibus: about 9,000 earmarks. Last year's continuing resolution didn't let Congress pass out cash for the very kind of parochial projects that House Speaker Nancy Pelosi had said she was going to rein in. This bill opens that door. Federal spending as a share of GDP is heading toward 28% -- by far the highest level since World War II. We thought taxpayers might like to know.

[Wingate1217]

Can we just have the elections again and throw out every one of the bastards......

CONGRESS' PORKY POLS PIG OUT ON FINE $WINE - New York Post

WASHINGTON - Congress went on a pork-a-palooza yesterday, approving a massive spending bill with big bucks for Hawaiian canoe trips, research into pig smells, and tattoo removal - all while the nation faces an economic crisis.
Among the recipients of federal largesse is the Polynesian Voyaging Society of Honolulu, which got a $238,000 "earmark" in the bill.
EDITORIAL: OBAMA'S FUZZY TAX MATH
The group organizes sea voyages in ancient-style sailing canoes like the ones that first brought settlers to Hawaii.
The sailing club has a powerful wind at its back in the person of Sen. Daniel Inouye (D-Hawaii), the chairman of the Senate Appropriations Committee.
The bill also has a whopping 8 percent increase over last year for the numerous federal agencies it funds.
New York got its share of earmarks, among them $475,000 to "improve and expand" the Italian American Museum in Little Italy.
The project was pushed by New York Reps. Gary Ackerman and Jerrold Nadler. The latter touted it, among other earmarks, on his Web site.
Nadler also announced $4.5 million for new park development in Manhattan.
Uncle Sam's generosity extends upstate, where there's $950,000 to convert a railroad bridge over the Hudson River into a walkway in Poughkeepsie.
Earmarks totaled at least $3.8 billion - a figure used by the House Appropriations Committee.
But the watchdog group Taxpayers for Common Sense calculates that there are an astonishing 8,570 earmarks at a cost of $7.7 billion.
The bill, which critics slammed as larded with pork, has big bucks to combat putrid stenches in the heartland, with $1.7 million for "Swine Odor and Manure Management Research."

[Gatorubet]

Originally Posted by Wingate1217

Can we just have the elections again and throw out every one of the bastards......

Earmarks totaled at least $3.8 billion - a figure used by the House Appropriations Committee.
But the watchdog group Taxpayers for Common Sense calculates that there are an astonishing 8,570 earmarks at a cost of $7.7 billion.
The bill, which critics slammed as larded with pork, has big bucks to combat putrid stenches in the heartland, with $1.7 million for "Swine Odor and Manure Management Research."

If we have 4 or even 7 billion worth of pork in a one trillion pair of bills, that is better than I'd hoped for percentage wise.

And I don't care if it is pork so much as if the pork will employ anybody or spend some money while doing the porky project. Stimulus and all that.

[Buckeye86]

I find people's outrage over pork to be interesting. Everyone hates Congress as indicated by its always abysmal approval ratings, but at the same time everyone (for the most part) supports their local representatives as indicated by the ridiculously high incumbent reelection rate.

I wonder why that is? Oh yeah, because they bring money into the district to improve things. Crazy how that works.

[Bucklion]

Originally Posted by Gatorubet

If we have 4 or even 7 billion worth of pork in a one trillion pair of bills, that is better than I'd hoped for percentage wise.

And I don't care if it is pork so much as if the pork will employ anybody or spend some money while doing the porky project. Stimulus and all that.

It might be a good percentage, but our esteemed President saying that the bill was "free of earmarks" the other night was laughable at best.

[jimotis4heisman]

Originally Posted by Buckeye86

I find people's outrage over pork to be interesting. Everyone hates Congress as indicated by its always abysmal approval ratings, but at the same time everyone (for the most part) supports their local representatives as indicated by the ridiculously high incumbent reelection rate.

I wonder why that is? Oh yeah, because they bring money into the district to improve things. Crazy how that works.

1-name recognition.
2-the fact that most districts are not competitive. those the same people are elected over and over. very few districts are +/-3%.

[Southpaw Stone]

There are no "tough choices" being made in this bill. If anything, this is encouraging what help helped destroy the Roman Empire which was hedonism and individualism. More freebies for folks that feel they needn't work.

When Obama said during his campaign that we weren't going to see 8 more years of Bush he was right. I thought Bush spent like a drunken sailor and now I don't even know how to classify Obama's behavior.

Official: Obama budget sees $1.75 trillion deficit

WASHINGTON (AP) - President Barack Obama is sending Congress a "hard choices" budget that would boost taxes on the wealthy and curtail Medicare payments to insurance companies and hospitals to make way for a $634 billion down payment on universal health care.

Obama's first budget, which will top $3 trillion, predicts the deficit for this year will soar to a whopping $1.75 trillion, according to administration officials who spoke on condition of anonymity before the public unveiling of the budget Thursday. The huge deficit reflects the massive spending being undertaken to battle a severe recession and the worst financial crisis in seven decades.
As part of the effort to end the financial crisis, the administration will propose boosting the deficit by an additional $250 billion this year, enough to support as much as $750 billion in increased spending under the government's financial rescue program. That would more than double the $700 billion bailout effort passed by Congress last October. Obama, in a morning briefing, spoke of "hard choices that lie ahead." He called his budget "an honest accounting of where we are and where we intend to go."

Official: Obama budget sees $1.75 trillion deficit

[Bucklion]

Originally Posted by jimotis4heisman

1-name recognition.
2-the fact that most districts are not competitive. those the same people are elected over and over. very few districts are +/-3%.

Toss in Congressional Redistricting which is basically under-the-table bi-party job security.

[jimotis4heisman]

Originally Posted by Bucklion

Toss in Congressional Redistricting which is basically under-the-table bi-party job security.

thats how they make sure #2 stays in place. (or one of multiple factors)

[Buckeye86]

Originally Posted by jimotis4heisman

1-name recognition.
2-the fact that most districts are not competitive. those the same people are elected over and over. very few districts are +/-3%.

1- if the local politicians were anywhere close to the approval ratings that Congress as a whole has I highly doubt that name recognition would carry incumbents to victory

2- this doesn't address why other candidates from the same party don't rise up and replace the current ones

so once again, I think it goes back to the hypocricy of supporting your local politician for bringing money into the area but disaproving of Congress as a whole for doing the exact same thing for their own districts

if people actually gave a damn about pork spending why don't politicians win elections by promising to not participate in the practice (aka not bringing any money to their districts)

[jimotis4heisman]

Obama Delivers $3.6 Trillion Budget Blueprint - WSJ.com

WASHINGTON -- President Barack Obama delivered a $3.6 trillion budget blueprint to Congress Thursday that aims to "break from a troubled past," with expanded government activism, tax increases on affluent families and businesses, and spending cuts targeted at those he says profited from "an era of profound irresponsibility."
Associated Press President Obama, accompanied by Budget Director Peter Orszag (right) and Treasury Secretary Tim Geithner, speaks about his fiscal 2010 federal budget on Thursday morning.



The budget blueprint for fiscal year 2010 is one of the most ambitious policy prescriptions in decades, a reordering of the federal government to provide national health care, shift the energy economy away from oil and gas, and boost the federal commitment to education.
One war would end, as troops leave Iraq, while another would ramp up in Afghanistan. To fund it all, families earning over $250,000 and a variety of businesses will pay a steep price, but Mr. Obama implored Americans to own up to the mistakes of the past while accepting profound sacrifices.
"We need to be honest with ourselves about what costs are being racked up, because that's how we'll come to grips with the hard choices that lie ahead," Mr. Obama said Thursday morning. "And there are some hard choices that lie ahead."
The president blamed the nation's economic travails on the administration that preceded him and on a nation that lost its bearings. His budget plan projects a federal deficit of $1.75 trillion for 2009, or 12.3% of the gross domestic product, a level not seen since 1942 as the U.S. plunged into World War II.
continued...

http://online.wsj.com/public/resourc...nt02262009.pdf

A New Era of Responsibility (Obama's Budget)

Note the titles
President's Message
Inheriting a Legacy of Misplaced Priorities
..........