Stimulus Package: Tax Cuts Versus Spending

[fourteenandoh]

you know whats awesome? we are now throwing around the term "trillions" the way we used to throw around "millions" a year ago.

[Gatorubet]

"A billion here, a billion there, and pretty soon you're talking real money." - Sen Everette Dirkson

[jimotis4heisman]

Raiders of the Lost Taxpayer - WSJ.com

...
National Journal reported this week that the Senate's economic stimulus bill includes a provision that would make Hollywood studios eligible for a special 50% write-off of equipment purchases. According to the report, "the provision is backed by firms like the Walt Disney Co., and the industry trade group the Motion Picture Association of America."
The House version of the stimulus already includes a bonus depreciation that lets businesses immediately write off 50% of their 2009 capital expenditures. But the Senate bill expands the definition of "qualifying property" -- specifically to include "certain motion picture film or videotape."
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they slapped video equipment freindly verbiage on the TARP after it failed and all of a sudden round two passed with the support of the tv media and hollywood. now include a 50% write off and see what happens i guess.

Protectionism as Stimulus - WSJ.com

Earlier this month we noted that the U.S. iron and steel industry was lobbying for a "Buy America" provision in the stimulus package. Now everybody's getting into the act.
On Tuesday the Senate Appropriations Committee added "manufactured goods" to the list of items that must be American-made in order to qualify for stimulus dollars under the American Recovery and Reinvestment Act. Congress is signaling to the rest of the world that U.S. protectionists are in charge. Forcing U.S. contractors to buy domestic goods instead of shopping for the best price available world-wide means that taxpayers risk overpaying for their roads and bridges. And that means capital will be misallocated, fewer projects will be built and the bill will go ever-higher.

There is also the little matter of retaliation by our trading partners. The European steel industry has said that it will urge the EU to challenge the provision at the World Trade Organization. That's the high road. Another course would be for other countries to lock American companies out of the bidding on their projects. China's stimulus is estimated at $600 billion. Caterpillar Tractor says that it has a "major initiative to compete in infrastructure projects around the world -- particularly in China -- and this would seriously undermine it." Congress must want more Caterpillar layoffs.
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[DaytonBuck]

"There will be time for them to make profits, and there will be time for them to make bonuses," the president said. "Now is not that time."

Los Angeles Times

Why would we need profits in a capitalist system?

[jimotis4heisman]

“Cash For Clunkers” Drives into Reality ? The Foundry

But for handing over gobs of cash with no strings attached, it would be harder to imagine a more sweetheart deal for the auto industry: According to the Wall Street Journal, Congress is considering a proposal to pay consumers to buy new cars. It could wind up as part of the stimulus package now pending in the Senate.
The program, dubbed “cash for clunkers,” would provide tax credits of up to $4,500 for trade-ins–especially those with poor fuel efficiency. With barely-running clunkers available in many areas for as little as $100 apiece, the credits would be a direct subsidy to auto manufacturers and dealers. (In reality, more than getting old, fuel-guzzling cars off the road, the program would probably pull abandoned autos out of the junkyard or off the front lawn for a single day’s service.)



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Government Wants to Help You Buy a New Car - U.S. News Rankings and Reviews

The measure, according to CNN, would provide, "An ‘above the line' deduction, meaning even tax filers who don't itemize deductions could still get the benefit." It would apply to new auto loans up to $49,500, but even those buying more expensive cars would get some benefit. The measure would allow them "to deduct the interest and sales tax for the first $49,500. The benefit wouldn't apply to individuals making more than $150,000 or families making more than $250,000."

[PlanetFrnd]

Originally Posted by fourteenandoh

I'm just thinking out loud. Its a legitimate worry. Once we pull this thing off, how do we get out of the pickle we will unevitably be in? Will the consequences be worse than the benefits? In these cases, I think an exit strategy is almost more important than the strategy to fix the economy.

For the record, I didn't mean you. I'd say my comment was directed 15% at Jake, 8% at Mike and 77% at ekeen.

Originally Posted by DaytonBuck

Los Angeles Times

Why would we need profits in a capitalist system?

Pretty sure he meant that they are NOT profitable, and therefore should not be paying bonuses. Actually, very sure.

[jimotis4heisman]

Washington Times - EXCLUSIVE: Stimulus has plum for lawmaker's son

A top House Republican is demanding an investigation into whether the more than $2 billion for national parks in the House stimulus package is proper in light of the fact that the chief lobbyist for the National Parks Conservation Association is the son of House Appropriations Committee Chairman David R. Obey.

...

The money included in the stimulus bill that passed Mr. Obey's committee - $2.25 billion - was about equal to the National Park Service's total yearly budget

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[MaxBuck]

This whole stimulus package is going in completely the wrong direction. Instead of answering the question, "Where will our spending do the most to boost the economy," it's on "Where can I best feather my own nest, those of my friends, and those of my constituents."

[Southpaw Stone]

I wonder if Obama will invite Mitch McConnel over anytime soon during movie night to discuss the peril of consumption loans versus self-liquidating assets.

So much for the spirit of bipartisanship.

[DaytonBuck]

Originally Posted by MaxBuck

This whole stimulus package is going in completely the wrong direction. Instead of answering the question, "Where will our spending do the most to boost the economy," it's on "Where can I best feather my own nest, those of my friends, and those of my constituents."

This is surprising to you?

[Gatorubet]

Originally Posted by DaytonBuck

This is surprising to you?

What Dayton said, with the exception that getting the vapors about a bill before it is sent to conference to work out the differences with the Senate version is jumping the gun. Good observations and worthy of discussion mind you, but the House version is not the done deal, and there is plenty of opportunities for further revision.

[DaytonBuck]

Originally Posted by Gatorubet

What Dayton said, with the exception that getting the vapors about a bill before it is sent to conference to work out the differences with the Senate version is jumping the gun. Good observations and worthy of discussion mind you, but the House version is not the done deal, and there is plenty of opportunities for further revision.

Porkulus may get a slight improvement after they conference but I'm not holding out out hope

[Best Buckeye]

[Wingate1217]

Originally Posted by MaxBuck

This whole stimulus package is going in completely the wrong direction. Instead of answering the question, "Where will our spending do the most to boost the economy," it's on "Where can I best feather my own nest, those of my friends, and those of my constituents."

One senator's take on parts of the bill.......

Sen. James Inhofe, R-Okla., says the nearly trillion-dollar stimulus package the House of Representatives is heaping on Americans is nothing more than a huge spending bill with projects in it for people the Democratic-led Congress wants to buy off.



Inhofe, who says the bill will do nothing to stimulate the economy, also tells Newsmax TV that the superfluous bill will provide tax refunds to people who don't pay any taxes, and would even give government checks of up to $1,000 to illegal aliens.



?You have a stimulus bill that's supposed to stimulate the economy,? Inhofe explains. ?We know how to do that. We did it under John Kennedy; we did it under Ronald Reagan. We know what it does and what you have to do for capital gains and for all these things to open up the economy. But this [stimulus package] doesn't do any of that. There?s so many things in there that are just bad.?



Inhofe notes that a lot of the pork lies in projects that have nothing to do with stimulating the U.S. economy, including:




$30 billion on federal government building improvements


$1.5 billion for homelessness prevention


$650 million for digital TV coupons


$650 million for wildlife management


$600 million for the federal government to buy new green cars


$570 million for climate change


$75 million for smoking cessation activities



?The only tax decreases they have here are refundable tax credits,? Inhofe explains. ?And that's really just giving refunds to people who don't pay taxes. That has nothing to do with stimulating the economy.?



One of Inhofe?s biggest objections to the $880 billion bill is that there is only $30 billion that goes toward some of what he believes are the real problems that should be addressed, such as roads and highways.



Inhofe says he personally met with President Barack Obama Monday to point out that the $30 billion earmarked for infrastructure represents only 3 percent of the total amount of the spending bill.



?When I told him that, he didn't believe it was that small a percentage,? Inhofe says. ?I said, ?If we find that I'm right and you're wrong, would you go up to 10 percent?? And he said, ?I'd certainly look at that.? Since then, he realizes that I am right. As far as roads and highways, it's $30 billion, and then a few [dollars] for water infrastructure.?



Inhofe believes it is the infrastructure improvements that could provide real jobs, while spurring the economy.

Newsmax.com - Sen. Inhofe: Stimulus Bill a &#39Big Buyoff&#39

[DaytonBuck]

Look let's call a spade a spade. Look at California and New Jersey. You elect a bunch of liberal Democrats and give nearly complete control of government this is what your going to get. I have no idea why Max and Gator think there's some principled way out of this. 5% of this bill is infrastructure spending. Much of this bill is spread out past the next 3 years and it creates a budget line that'll but tough to ever get rid of.