Feel-Good Economics

[Spideynw]

FEEL-GOOD ECONOMICS | National Center for Policy Analysis

...there is virtually no empirical evidence that tax rebates are an effective response to economic slowdowns...

This is why giving people so much power just for winning a popularity contest is one of the dumbest things we could do, IMO.

[DosEquis]

One potential issue i see that would minimize the positive impact the rebate could possibly create ...

Americans, in general, already have a ton of debt and these funds would simply go to pay for things they have already purchased. This is especially true during a time of recession as people are far more conservative with their money and less likely to be spend happy. They will use it to pay toward their credit card and sit on the rest. No increased demand, no increased consumer confidence, not being used to invest, and little net help to our current economic situation.

Speaking in generalities of course.

[6SpeedTA95]

Dos you raise a good point. However, keep in mind that paying off debt does help the economy as does saving.

Also many people myself included will spend this money on things like couches and TV's

To address the main point I tend to agree that the affects wont be drastic but consumers ultimately make better decisions than the government when it comes to spending money and moving capital in an economy. So a small infusion like this while not substantial will have an affect. But I think to have any real measureable affect it would need to be close to double what the administration is considering.

[Spideynw]

Originally Posted by 6SpeedTA95

Dos you raise a good point. However, keep in mind that paying off debt does help the economy as does saving.

Also many people myself included will spend this money on things like couches and TV's

To address the main point I tend to agree that the affects wont be drastic but consumers ultimately make better decisions than the government when it comes to spending money and moving capital in an economy. So a small infusion like this while not substantial will have an affect. But I think to have any real measureable affect it would need to be close to double what the administration is considering.

It will have hardly any effect since government spending will remain constant, meaning the government will simply have to borrow more to pay for its spending, which means increased inflation. The inflation will wipe out most any savings gained.

[6SpeedTA95]

Originally Posted by Spideynw

It will have hardly any effect since government spending will remain constant, meaning the government will simply have to borrow more to pay for its spending, which means increased inflation. The inflation will wipe out most any savings gained.

Ummm not really, think about what you're saying...they are borrowing for a 1% stimulus...there's far FAR more to inflation than simple deficit spending.

[Thorgrim]

You have to look at the politics, both sides are playing another game of chess, trying to make the other look weak in the need for "helping the american people during an economic time of crisis"

The GOP doesn't have the principles for such a large spending measure, they just wanted to steal the Dems thunder and look like the shining knights coming to the rescue

The Democrats are going to ask for specifically different and more aid, and eventually they'll have the GOP say "no, we won't do that" and then they'll hit the airwaves going on about how the GOP is preventing them from stopping a recession, but to avoid the "do nothing" label, they'll probably pass something that is fairly large

Then it's a matter of who people believe helped more...do they believe the GOP that making the Bush tax cuts permanent would have meant more...or the Democrats that more working class spending would have helped more...

IMO, the Democrats will win that round, and with it, claim the mantle of "those trying to fight off the 'Bush-McCain/Rudy/Romney" Recession"

As we've seen in debates, McCain is very uncomfortable dealing with the economy, Rudy is easily damaged by his own personal scandals that actually mean something to Republican voters, Romney is the probably the best candidate on paper for "economic" arguments, however the primary has driven his poll numbers into terrible spots...

Going down this road, it looks like all 3 candidates can't win...but then again...everyone thought Obama was going to win NH, and McCain was CERTAINLY done over the summer, and it was rather a cruel joke on an old man that people were telling him to stay on...

[Spideynw]

Originally Posted by 6SpeedTA95

Ummm not really, think about what you're saying...they are borrowing for a 1% stimulus

And since they are borrowing for a 1% stimulus, the "stimulus" will pretty much be wiped out by borrowing rather than reducing spending.

[thewise1]

lol .75% rate cut today

[bheld]

I'm loving this pump and dump economy. At least the wealthy are doing well.

[6SpeedTA95]

Originally Posted by thewise1

lol .75% rate cut today

?

[thewise1]

Originally Posted by 6SpeedTA95

?

Not watching the news?

Federal Reserve makes emergency rate cut - Stocks & economy - MSNBC.com

[WickedLou9]

Originally Posted by thewise1

Not watching the news?

Federal Reserve makes emergency rate cut - Stocks & economy - MSNBC.com

I think the question was: why is it funny?

[thewise1]

Originally Posted by WickedLou9

I think the question was: why is it funny?

Feel good economics at its best?

Although perhaps it might be called economics of desperation instead...

[Scrum]

They need to do something to fix the mortgage market before I start having cars repossessed.


My wife is a loan processor for a broker. She has gone from closing 50-60 files a month to closing 6-7. Not only is money tight, but every time a big time lender closes its doors on sub-prime loans, it's one step closer to unemployment.

[David Octavius]

Voodoo economics - with the right math any economic arrangement and
plan works

[David Octavius]

Originally Posted by Scrum

They need to do something to fix the mortgage market before I start having cars repossessed.


My wife is a loan processor for a broker. She has gone from closing 50-60 files a month to closing 6-7. Not only is money tight, but every time a big time lender closes its doors on sub-prime loans, it's one step closer to unemployment.

50-60 to 6-7 damn that is a steep cut, what area is this?

[Scrum]

Originally Posted by David Octavius

50-60 to 6-7 damn that is a steep cut, what area is this?

Northwest Chicago suburbs.

[6SpeedTA95]

Originally Posted by thewise1

Feel good economics at its best?

Although perhaps it might be called economics of desperation instead...

I disagree with you.

[hsmith]

I doubt I will get shit, but if I do it is going to paying down debt.

[Ardentfrost]

Originally Posted by 6SpeedTA95

I disagree with you.

Which part do you disagree with? The rate cut was most certainly a move of desperation. I wouldn't go so far as to call it "feel good" because it does ACTUALLY do something (and something bad, to say the least).