American Morning
Economist: Obama's stimulus doomed to fail
[cnn-photo-caption image= http://i2.cdn.turner.com/cnn/2009/images/07/15/morici.peter.art.jpg caption="Peter Morici of the University of Maryland says President Obama's economic stimulus plan is doomed to fail."]
It's been five months since President Obama signed his stimulus plan in to law. It includes more than $250 billion of government spending and tax breaks meant to create jobs. Yesterday, the president said unemployment may get worse before things turn around.
Peter Morici is a professor of international business at the University of Maryland and former economic director for the United States International Trade Commission. He says President Obama’s stimulus plan is doomed to fail. He spoke to Kiran Chetry on CNN’s “American Morning” Wednesday.
Kiran Chetry: The nation’s unemployment rate hit 9.5% last month. There's debate on whether the stimulus is working and if it's working quickly enough. The White House says we are on target. But a lot of people are asking when are we going to see the effects? You, though, say it's doomed to fail. Why?
Peter Morici: The stimulus money is very badly spent. We knew the tax cuts from the Bush stimulus don't work. People are simply saving it. If you wanted stimulus to work, spend it mostly on shovel-ready projects, infrastructure, schools, hospitals, etc. But only $100 billion of the $800 billion is spent there.
Chetry: When you say shovel-ready – they found it a challenge within the administration to find shovel-ready projects, at least that’s what many are saying, in these various states. How do you get that better organized so indeed if the money is there, only 10% has gone out, they can get it to projects that are ready to go?
Morici: I'm no Republican, but what President Obama is discovering is how slow the bureaucracy moves. It's very hard to push this kind of money through the system. Also, all of the red tape that the government has created doing construction has made it very difficult. I could get the money out there. But Obama doesn't seem to be capable of getting it done. The advisers don't seem to be able to get it done. What you got to do is just hand it to the mayors and county executives and say, “You got to spend x by the end of this year.” Then give them another chunk for next year – “You got to spend that by the end of the year and so forth or you don't get to keep the money.” Most municipalities and counties have a long list of renovation projects they’re holding in abeyance because they don’t have enough cash. That’s the way to get it out. President Obama is not thinking in those terms. Instead, he beefs up the Department of Education.
Chetry: What they're saying within the administration is some of this money has actually been going to plug budget gaps. We know a lot of these local municipalities and state governments are suffering right now. If it's not sort of earmarked for something, it’s going to go to plug the budget holes. How do you make sure it’s actually going to go to things that will create jobs, like building roads, jobs, schools, construction?
Morici: You have to require it. You have to say, “We're giving you $100 billion by the end of 2009“ – you divide it up by population – “it must be used for the following kinds of projects: renovating schools, reconditioning hospitals, things of that nature.” And you know, the state and local governments for all their crying, and all of Mr. Obama’s exertations, weren't laying people off. Employment was growing through the time the stimulus package was signed. Both education, noneducation, state, and local. And since it's been signed, it’s continued to grow at approximately the same pace. I can find no discernible effect in the Department of Labor statistics for state and local employment that would indicate the stimulus is having any effect whatsoever. It’s an absolute fraud in that regard.
Chetry: Yesterday, the president said we have to have patience when it comes to this and the plan was intended to work not in a couple of months but in two years. You say, though, that patience would fix a normal cyclical problem, a downturn and then an upturn in the economy. But you're calling this a structural problem – and it has to do with the fact that we don't manufacture enough here. What is the solution?
Morici: Well, we import too much from China without selling there. One of the best-selling cars in China are Buicks, believe it or not. But they won't buy any Buicks made in the United States. They have a 25% tariff and they require General Motors not only to make them there, but to move their suppliers there. That's why the Midwest is melting down. Because it’s not just Buicks and cars, it's all manner of high-end industrial products for which China's cheap labor doesn't provide an advantage. That’s about 50% of the trade deficit. The other half is oil. President Obama's windmills are not going to solve that. We need dramatically higher mileage standards right now. And we need a real clunker subsidy to get the big cars off of the road. For example, replace the Tahoes with Traverses – very big car but it gets twice the gas mileage.
Chetry: The other thing you talked about is the private sector shedding 6.6 million jobs, half of those being shed in manufacturing and construction. We know the housing market is struggling. What's the solution if you use that stimulus money to try to get people back to work and beef up manufacturing here in our country?
Morici: Well, essentially, you have to recalibrate trade with China, one way or the other. You have to get it to unhinge its currency and stop manipulating its currency. It's buying about $400 billion a year of U.S. dollars with yuan that it prints, basically giving them to us and then that basically keeps their currency cheap and makes those products artificially cheap in our markets. With regard to construction – we really have built too many houses. We're over-housed right now. There’s an excess supply. So what you need to do is move those construction workers, as I said earlier, in to infrastructure – rehabilitating schools. The same guy that can put a roof on a house can put a roof on a school.
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This is a typical American economist blaming the Chinese for all of our economic problems. Instead, we should be asking how we can build the same things we import from China here in the US efficiently and cheaply? There are 7.2 million people lining up on the job lines available to do this. They should be put to work with the stimulus money, instead of taking the handouts to buy more Chinese imports that we need in our daily life.
The labor unions are the idiots that put GM in the shape its in. $25 an hour to install 1 head light?? I was only paid $22.50 an hour for that position but, i wasnt there as long. Dont get me wrong.. i enjoyed the money while i made it but, thats just insane!
This is such a filler article! I'm so disappointed to read this on CNN. Fox news is around for such biased articles as this. There are economists that say it's a great plan and economists that say it's a bad plan. Being a economist myself I honestly don't know if it will work, no one does. Everyones points of views are based on estimates of predictions! There are no certain numbers only guess work. This author wrote a crap article based on crap logic, fire them and send them to Fox. Or I'm going to MSNBC for my news....truely garbage.
It doesn't take an economist to see this stimulus as a failed plan. Any responsible adult with a home and kids saw that this was destined to fail. One does not go deeper into debt to get out of it. Our free enterprise system alone will get us out of this mess. Just sit tight and let it run its course.
Let's boycott Chinese products!!!
I find it hard to believe that shovel ready projects are "hard to find". Considering that I live in Austin and there are still bridges half built but constructions have stopped. In California I see roadways that needs repaving, but they don't have state money to fund it. Especially in a state like California where they are facing a budget crisis, wouldn't additional government funding that would invest in public infrastructure not only help out the countries economy, but it might assist in aiding the states budget short fall?
With minimum wage going up again in July you can bet there will be even more staff reduction and fewer work hours available in the small business world. Only way I can keep my coffee house afloat.
Bill Mitchell: I love the way you make it sound like 2 major wars "happen" like natural disasters. Gee, if it weren't for those wars "happening", Mr. Bush might have come out looking pretty sweet, huh?
To the person who said (what should we do now )the simple answer is we need to get some balance back in Washington between republicans and democrats since we have no other choice. The bullet prood majority of democrats promulgates bills not being even read by our representitves and passed on party line votes. This is not representative government. The democrats seem to forget that they did not win by more than a couple of percentage points in the popular vote. We did not elect a dictator or vote for a change of government to a dictatorship. 2010 vote republican even if he just escaped from hell.
I am starting to understand why liberals vote for people like BO . . . they state and belive the same lies and there is not lack of intelligence. It would be so great if just a few showed a little common sense.
WHy is this so hard for "Economists" to understand?
Go back to BASIC ECONOMICS. The ONLY way to stimulate an economy is for the population to SPEND MONEY. Not the Government, Not Businesses, AVERAGE PEOPLE.
Instead of taking the money away from the people in the form of taxes and other Governmentally controlled NONSENSE, Give an income tax halt for this year. Stop taking away my money and let me spend it!
If the Government insists on spending the "stimu-not" money, fine. Take the number of people paying taxes in this country, Divide the $800 Billion and send each person a check. You want to see an economy grow? That will do it.
We DO NOT need MORE Government intervention. Republican or Democrat or Independent, we don't need any more fingers in our daily lives and our wallets!
Obomunism isn't going to work.
Umm Stupidty-Clinton was the one who began deregulation and the Alan Greenspan continued it many steps too far. Maybe you should stop listening to just one side
I will ask it again and maybe this time I will get an intelligent answer . . . Why are liberals and democrats so dumb???? I thought they went to the same schools as I, but again, I must be misinformed. Oh well, I could take the liberal common statement and blame it on someone else . . . because the liberal typically do this since the democrats are unable to do anything correct.
Bill Mitchel,, You da man
I think that he is right on spending this money on rebuilding our failing infrastructure and schools. We can begin building sustainable schools, hospitals, fire stations, police stations, and cleaner energy sources that will revamp the U.S. across the baord economically. All those have direct ties to improved economic conditions, lower crime rates and a healthier overall population. Obama's stimulus is the right direction it is just the wrong implementation of it. The people in the private sector are gonna be very cautious with any money they get but everybody's happy if government funds go to building a new greener school in their community. To be honest the stimulus money gave me a job along with several other college students who would not have been able to get internships without the money which allowed for employers in struggling sectors to hire us.
Shovel ready, muzzle ready. If you're a 40 year old accountant with a mortgage and kids, how is building a road going to help you? It's not like you can switch career paths and go work on a construction crew.
Get real Washington.....
It seems like facts don't matter here, but they are stubborn things.
-Tax cuts do work. They created the greatest consumer spending boom in the history of the world. We now have nothing to show for it except a trade deficit and stores which are now closing. Bush Cut taxes, but didn't reform the system, which is why we got the results we did.
-The recession of the earlier part of this decade was over by the time the Bush tax cuts kicked in.
-The Republicans are worried about the deficit. They proposed a $500 billion tax cut instead of the 787 billion stimulus. They didn't have that money either. Funny how they seem to worry about the deficit when they are out of power but when their in, there's always money for what they want to do.
-Those of you who think that we don't need to spend money on infrastructure and that tax cuts are the only economic policy that ever fixed anything must live in an alternate universe where sewers don't leak, road are all smooth, sidewalks aren't broken, and bridges aren't deemed deficient. I recognize that not all of this is the Federal Government's responsibility and that local authorities can be inefficient, but if you vote yourself a tax cut and spend it at Target, well, that's what you will get. France, Japan, Germany, Sweden, Finland, even Spain have better infrastructure than we do.
-Corporate Taxes are lower in Britain, Germany, Switzerland, Canada than they are in the US. I hate to bother everyone, but how much we pay for a gallon of gas is irrelevant to prosperity, only relevant to our own consumption levels. Tax cuts should be aimed at business and capital formation, not mindless cuts aimed at a "middle class" which actually pays less and less of the Federal Income Tax every year.
-I have yet to see anyone in either party saying "we have two wars on, let's pay for them'. And it seems the loudest clamorers against any tax increases ever seem to be in favor of the two wars we have going on and then some.
Facts are stubborn things.
Is "notamused" the first member of his family to walk upright? He writes that 'taking money out of the hands of the public and into the money laundering govermental system in any compasity is a smart thing to do....for every dollar spent on wellfare, only %25 actually made it to the hands of welfare receipients'
Hey Moron! you were going for GOVERNMENTAL, CAPACITY, WELFARE and RECIPIENTS! Can't understand why I don't give any credence to your quoted statistics...
Do America a favor and go back to your job of answering the phones and saying, "Thank you calling Papa John's, can I take your order, please?" while the grown-ups try and solve this current financial crisis.
I don't think any informed person ever thought this stimulus would have a meaningful impact on the economy. This was a spending bill that was crafted in 2 days by 2 people. My guess is for every dollar spent the tax payer will return about 10 cents in economic benefit. I feel relatively certain that 20 years from now this spending bill we be viewed as one of the worse uses of tax payer money in history. Wasted opportunity – pure and simple.
I love reading these comments. It's almost as if everyone has become an expert on something that is extremely vast and complex by reading the limited number of articles that are available to them. The truth is that even the experts, the people who have the best understanding, aren't sure what to do. Hindsight is always 20/20. But when the stimulus was being proposed, the Obama Administration stated exactly what they intended to do with the money. Why wasn't Peter Morici speaking up then? The reason is because being critical, and talking about coulda shoulda woulda is safe. He didn't speak up because he didn't know. He might have thought more money should have been made immediately ready to shovel ready projects, but he didn't know it. Which is why he was quiet. Because the general consensus was that this had a shot at working. Now that it is becoming popular to speak poorly about it he is willing to take the limelight to help his image. Because it is safe. I want less people like that and more people trying to do what they think is right at the time that doing right is needed.
Let's face it. When Big Government gets its hands on money (money we don't have yet), that money gets spent on – guess what? More Big Government. Our "leaders" are intensely more interested in keeping themselves in power and personal wealth than they are in fixing the problems that beset the nation as a whole. This lesson is not new, it's something we have known for hundreds of years in this great country and thousands of years worldwide. But the voters keep on asking for more and more of the same by voting the same corrupt, self serving spendthrifts back into office repeatedly. We do it to ourselves.
For once - just ONCE - I would like to hear one of these second-tier pundits offer constructive, pragmatic advice about stimulating the economy and strengthening the nation's financial system. All the rhetoric here is laughable. Yeah, let's "recalibrate trade with China"! Make them eat Twinkies and Cheerios!
Correct on the China trade front. We have allowed them thru the world trade organization entry to ignore trade rules. I am a manufacturer and have product in over 42 countries around the world except China. They imposed a 97% import duty on my type of products and being a small business with no clout in Washington like GM I could do nothing about it. The Chinese on the other hand have a avenue promulgated by and made legal by our esteemed congressman where by they petition for lowered tariffs by paying off a congressman to support there tariff relief down to almost zero. We will never compete without repeal of this type of influnce buying in Washington.
@notamused: No, but in that price of the hamburger is money for wages to the cashier who tells what you ordered to the cook to make to give to you. Thanks for that awful analogy.
This problem was 40 years in the making, the incompetence of the late 60's and 70's as an example the oil embargo. Companies are real greedy that's why they out source jobs to other countries with no environmental laws. At the time president Carter tried to have renewable resources back then; but as you can see today we are now worst off then ever. Obama got this mess handled down from the republicans, with huge deficits in the past ten years. Stop criticizing everyone and work together to accomplish something, stop wasteful spending, reinvest in America instead of foreign aid, two wars does not help the matter either. stop out sourcing jobs to other counties.
In response to Bill Mitchell's theory of Bush's tax cuts leading to a surplus. How do tax cuts lead to a surplus? Taxes are revenue for the government. If taxes are cut, then the government loses money, resulting in a possible deficit.
Melissa,
You sound "tired" sweetie. Your comments certainly are.
Moderate what?
you can be the very best and wise economist in the entire world and you will still not be appreciated, or listened to, by the liberal dems. the president and congress KNOW WITHOUT A DOUBT that we are in financial trouble and they KNOW that raising taxes on anyone is nto the answer. they are seeing the results, but they do not care. they will NEVER admit that a republican plan will work and theirs will not. They would rather destroy this country than admit that tax cuts are the only solution. and that is exactly what they are doing,...destroying the country.
Morici has some very good points, but then again with our government everyone has to have their piece of the pie or a bill/plan would never pass. Majority has proven to win time and time again, even if it does not help the people. The stimulus package was a rushed deal and should have been known it was 90% flawed from the beginning. Obama has done some good things and some other things not very well. His supporters have not seen the other side of any issue yet. They are so worked up on he's going to be a miracle worker, when it has already been seen he's a flip-flop artist just like Kerry.
I'm glad someone got the clue that we can't compete as a manufacturing nation much longer due to high operating costs in the US. Not only wages but taxes, supplies, and transportation costs add so much when you're in the US. It's hard to compete on an international level. Right now we're beating out China and many other developing countries in some aspects of manufacturing because quality has been an issue. Those countries' buisnesses are making better quality items now and they keep on improving. They're not stupid. We're slowly getting pushed out of the manufacturing market and there's not a whole lot we can do about it. Also, look at how much of our debt China holds, the last I checked it was over 25% of it. They've got us by the . . . financially.
@mike in syracuse... you are a total moron. Thank god I left there 17 years ago... must be all that's left there now is idiot's like you.
Try, just try to be patient people. The stimulus needs time to work. It's time to get over the need for immediate gratification. Sit down, shut up and if you can't help the situation then stay out of the way for those of us who want to help.
Understand this: the same people who back Obama and his plans to destroy the American economy and the American way of life, are going to be run over like the rest of us who know who and what he really is. Get your head out of your and wake up.
Hi,
Our small community of 8,000 people submitted a shovel ready list for $20M in projects we could have completed in 12 months. We didn't recieve 1 dime. The federal government made so many low income requirements and the Wisconsin Governor didn't disberse any of the funds (budget gap coverage). I agree with all your takes, and they want to make more big government so nothing else can get done? 🙁
Joe B.
May I remind you that Clinton is the president that opened the gangway to China. Until clinton was president, never did so many things get imported from china. Is that coincidence? He also made the immigration rules for people attempting to flee from communist cuba the same as any immigrant from a democratic country who is entering this country. Yes that was Clinton. He can't understand why people in communist countries want to leave those places, because he loves communist ideals. We have him to thank for the trade deficit and the loss of manufacturing in this country.
We are in trouble.
When cap and trade is passed all domestic manufacturing will be moved overseas. What will the unemployment numbers look like then.
L. Ron Hubbard wrote that when you reward down statistics, you get down statistics; and when you reward up statistics, you get up statistics. The "stimulus" and bail-out funds were donated to failing businesses (bands, big car manufacturers, etc.) and therefore we are getting poor results.
We should be giving stimulus funds to companies and organizations that are winning: alternative fuel and bio-friendly companies, as one example. In turn, the failing companies such as the banks and car companies and over-building home construction companies, should be penalized for their failures by not receiving any funds.
Along these lines, government agencies that haven't produced much and can't show results, should be getting less funding and letting people go – such as the Dept. of Education, and there are many others.
"And we need a real clunker subsidy to get the big cars off of the road. For example, replace the Tahoes with Traverses – very big car but it gets twice the gas mileage."
According to chevrolet.com, the Traverse gets 17/24 MPG, the Tahoe 14/20. In an effort to buttress his credibility, I'll attribute Prof. Morici's misstatement to hyperbole rather than gross mathematical incompetence. I'm sure the rest of his statements are far more credible.
Nick, you would have been better off if your comments had not been published. Some kind of liberal system math?. $430,000,000*1,000,000 comes to a bit more than $430 billion. And where would it come from? Tax the rich as summarized on CNN this morning? In that article, it said that 47% pay no taxes. My solution to the problem would be to amend what our forefathers said about "no taxation without representation" to include "no representation without taxation" In this way the Federal bureaucrats would be responsible to the taxpayers and then lets look at their decisions.
Have you ever taken a bucket of water out of the deep end of a pool and poured it in the shallow end? That is exactly what this stimulus is doing. Eventually what Obama is going to do is have so many buckets of water the pool level will actually be lower rather than the same. By 2012 we will need a new president to put some of those buckets of water back into the pool. In the meantime my neighbor will still be unemployed and my home's value will be as low as ever. Obama was a mistake and will change nothing.
In Economics 2 + 2 doens't always equal 4. There are so many factors that effect an economy that it's impossible to point to just 5 to 10 things and say "if we fix this, everything will be fine." That's why it is called the Soft Science.
If China has a 25% tariff on our goods and they manipulate their currency to track the dollar, why doesn't the WTO crack down on them. Every time we try to impose a tariff on Chinese goods, China complains to the WTO. Until they stop manipulating the yuan, we should slap a huge tariff on their imports. That'll bring the jobs back to the states, but unfortunately would also increase prices for everything.
Melissa July 15th, 2009 11:32 am ET
The stimulus is NOT a fraud. I’m so tired of people like Dave spreading lies and trying ot cause trouble. But then, thats the Republican way, isn’t it. Someone muzzle these people before they start a civil war.
Sounds like Melissa is a hard core liberal, MUZZLE EVERYONE THAT DOES NOT AGREE WITH ME. What happened to free speech Melissa, I guess that only applies if you agree with YOU or the current president. The FACT is Obama could do ANYTHING and you would defend him, because YOU voted for him and YOU couldn't be WRONG!!! Next stop, Dictatorville
Funny, we had 5 years of GDP growth of around 3% (historically in the good to very good range) and nobody said boo about the economy. Now democrats in their usual contorted and distorted view of history (like JFK was a great president) like to say that the economy was awful during all eight years of GWB. Many of you dems probably profited from the housing boom. If it was so bad and awful give back the money you made.
Obama set the bar as to expectations with regard tothe stimulus. He was wrong. Axelhead was wrong. Emmanuel was wrong. And when employers are required to pay for health care of all of their employees or face fines and penalties you will be out of a job because companies will start to close and layoff to make up costs. Businesses are in business to make money – not to employ you or feed your family. Get that through your empty heads, democrats.
This economist is trying his best to defend gov't interevention in free markets and he sounds like a clown. Gov't interevention ALWAYS messes things up. BO apparently was asleep or attending rev racists' sermons during his economics classses in college. He never learned that valuable lesson.
Liberals hate America and they most certainly HATE capitalism. They spend their lives trying to destroy both.
Dissolve the federal government !!
All legislation to be created at the state level......that legislation is then voted on by the populous twice a year,.... instead of "after" a politician seeks re-election.
TERM LIMITS FOR ALL POLITICIANS !!!!!!!!
The United States has turned into a giant cow utter that the corrupt, immoral elite are sucking dry!!!
You know what I am tired of? You lot crying because the Republicans want "money for oil companies" or Democrats want "big government." Partisan politics was a priority for the founding fathers so the minority could have their input, but this is just sad! Pointing fingers at one another, crying like little babies.
And for you people who did not want Obama in Office, guess what? Tough luck! I was neither a supporter for Obama nor McCain in the Presidential Election. But no matter who won, the successor will still be MY president. Our President!
I typically do not criticize people like this, only for the fact that I have longed believe people's opinions should be valued. But ... pointing fingers at one another saying "HE DID IT! BUSH WAS THE ONE WHO PUT US IN THIS MESS" Okay, yeah I know. I am someone who is largely in debt right now with education loans, working my way through college. I have been affected by the slumps of our economy. Everyone has! Everyone has the right to be concern where they are going to get their next course of meal for his/her family; how they are going to pay off their electricity bill; how to pay off their mortgage payments.
Now is not the time to be pointing fingers at each other. Now is the time for everyone to go to their computers or get pen and paper, to write to their congressmen about what sort of situation they are in right now. Complain to your congressmen. You voted for them.
It took "W" over three years to create this catastrophe, what makes people think that ANYONE can fix it in six months? Want to talk about a waste of stimulus money? "W" gave his oil and Wall Street cronies $750 billion right before he left office with no strings attached, in effect giving them a blank check to do whatever they wanted with the money. Many of the banks and companies who were given money out of this President's stimulus program have either paid it back already or have begun paying it back.
For those that argue that "W" had two wars to fight just remember, we only should have been fighting one, Afganistan. We've spend billions of dollars for the war in Iraq which was launched based entirely on lies perpetrated by "W" and his buddy Mr. Cheney. We had no right, we had no reason, and over 4,300 brave American men and women have paid with their lives. All of the money we've spent on Iraq should have been spent on destroying al-Qaida and the Taliban, and NOT ONE CIVILIZED COUNTRY IN THE ENTIRE WORLD would have faulted us for doing so. "W" couldn't find bin Laden and needed a political victory to ensure his re-election, so he concocted a pack of lies about Iraq having ties with al-Qaida and possessing weapons of mass destruction.
He and Mr. Cheney should be brought up on charges and thrown in prison.
I think we should take some stimulus money and clone the Roosevelts, Lincoln, and the guy who says if we give 1 million dollars to every one of the 430 million US citizens we only spend 430 million and let them come up with some ideas. If that doesn't work, pay the Chinese and people from India to come up with some ideas. ZING!
Oh, yeah definetely is going to failed.
It is already complete failed.
God have mercy on Americans
Wow, this economist is advocating increasing international trade protectionism. Doesn't he know that if we do that, China will retaliate. China requires GM to produce in China b/c domestic production is flawed b/c of the secondary effects of perverse union bargaining practices. Further, his solution to solve the problem of people driving Tahoes is to give them a credit using our tax dollars. Forget that! .They made the bad decision and they should have to stick with it. If you want to reduce oil consumption, increase the price of gas and invest in alternative fuels. I'm not an economist, but this guys is nuts.
wrote Bill Mitchell July 15th, 2009 11:14 am ET
"The increased deficits under Bush were due to 9/11, 2 major wars and umpteen natural disasters – none of which Clinton faced. If not for those events unique to the Bush Admin, we would have finished 2008 with a HUGE surplus – due to the tax breaks."
Are you serious? Where did you get your information, Sean Hannity? Rush? Newt?
No pal, here's the real reason. When Bushie deregulated everything under the sun, the banks opened up the floodgates of credit to the American population. The result? We spent more borrowed money in the form of credit card debt and jumbo loans than we could ever hope to repay. That's is what boosted the economy. That is what filled the tax coffers. Period.
It is also why that boom period was destined for a fiery crash, which we have now. This country had to have this recession/depression. Rememer when AIG and Bear Stearns showed the symptoms of failure? Do you even have any idea why? Mortgage backed securities. Trading debt derived from debt. And that sounds like sustainable fiscal policy? This is why free market pure capitalism only exists in a utopia. As much as I hate banks and hate to admit it, Bush did the right thing bailing out the banks or our economy would've crumbled, because all of these institutions are so intertwined in these shady securities.
Spending money, above all else, is what boosts an economy. We spent like drunken sailors and corporations and tax coffers benefitted alike. When consumers spend money, companies grow. Tax cuts do nothing to grow an economy. If a corporation's sales are flat, are they going to add staff, even with a lower tax rate?
Your problem Bill is you listen way too much to one side of the argument. Quit regurgitating Faux News tag lines, especially to people whom ACTUALLY understand economics, the hows and whys. All you do is make yourself look foolish.
Just give me the money,, I can save enough to be out of work half a year with NO unemployment with no gaurantees whatsoever, I will not waste a dime of it, I will loan it to americans and american buisnesses that play by the book and show equity,,, at very low rates.
And watch the people and buisnesses that borrow without equity or run with illeagals who don't pay thier share wash out.
this is so easy it is rediculous..
If my spelling and grammer stinks,,to bad
Stimulus? Spending money we don't have? Spending our way out of this? Everyone needs to remember one thing. "There is no such thing as a free lunch". Somebody, somewhere is going to pay for it. Spend now pay later tactics don't work at home in our personal budget and they won't work on the national level. Our current president has a silver tongue and has the wool pulled over alot of American's eyes. Americans need to wake up and look at how all this nonsence is going to effect us in four or five years. What this dog is spending now will cause a lot of problems in the near future and he more than like won't be in office to take the heat. We need to stop the wild spending spree and get back to basics. Our government is growing in a tremendous pace and is getting out of control. Wasn't it JFK that said "Ask not what your country can do for you, but what you can do for your country". Since when did it become our governments responsibility to support and feed and provide medical care? Buid cars (GM). Bail out private companies? Government needs to do what our original constitution said it was to do. The only role of the government is to protect and defend its borders and people.
"The increased deficits under Bush were due to 9/11, 2 major wars"-Bill Mitchell
And who was it that failed to act on intelligence handed to him in August of 2001 and then started an unnecessary war in Iraq? Maybe if Bush had been proactive before 9/11 instead of reactive, 9/11 and the 2 wars wouldn't have been necessary and we would be building on the budget surplus Clinton left him.
I don't believe its fair to judge the effects of the stimulus bill just yet. To respond to what valwayne said about the bill not creating jobs: if the money is dumped into the circulation too quickly, it will disrupt the relatively stable inflation rate and the interest rate. If that happens, you'll be complaining even more because any positive signs that are arising now will go down the drain with more job losses. Somehow, you place Obama in the league of the Gods, as if he has the answers to all the problems that we currently endure. FACT is he doesn't. He can't tell how the economy is going to shift and respond, in fact no one can really tell (not even the leading economists),albeit they can create models with data that can predict what MIGHT happen,because there are so many dynamic variables. So don't accuse and point fingers at the administration without being educated on the dynamics of the economy. This recession is a product of a string of bad economic policy and decision making. Its going to take longer to revive the economy
"The same guy that can put a roof on a house can put a roof on a school."
NOT TRUE! these are the guys that think they are big shots that do a school job and have it leak a year later and not claim responsibility. This costs taxpayers even more to fix it. public bid can be a nightmare.
flat roofs are a different game than pitched roofs.
I can end the recession by the end of the year.
1. Scrap cap and trade and start drilling for oil in Alaska and off the coasts of Florida and California. I know it won't hit the market for years but the knowledge that we are tapping into those resources will lower the price of futures immediately.
2. Cut the corporate and capital gains taxes in half. That would encourage investment and growth which would result in a few months, higher revenues to the treasury.
3. Forget about healthcare reform. Only about 5% of the population is involuntarily uninsured. More than 70% of the population is satisfied with their health care. Why fix what isn't broken?
4. IMPEACH Obama, Pelosi and Reid. They are incompetent and enemies of the state. They wish to turn us into a socialist country and are as anti-American as Josef Stalin or V. I. Lenin ever were.
Do all of these things and you will see double digit economic growth and millions of jobs created by January.
Obama is doing what he can. He has been in office not quite 7 months now, Bush was still on vacation 7 months into his term... so lets not compare.
Anyway, I believe there should be another stimulus. The money should be given to tax payers who are currently struggling with debt (whether it be house, car or student loans). By narrowing the demographic to just middle incomers with high loan debt, you decrease the amount of money that must be handed out. It also allows you to give these people a fairly large chunk of money ($200 today isnt anything, lets be realistic) to get back on track with their debtors.
Thus the higher classes arent taxed more, they just don't get a chunk of the stimulus, so they also have nothing to complain about.
The Banks, Insurance industry and Governments that left them both unregulated as large legalized ponzi like organizations are to blame. Banks and such are by all accounts, run by ivy league illuminati’s ripping the average American off. It’s almost like a sovereign wealth fund taken out of the hands of the average consumer to their detriment. Democracy is a farce if governments legalize this kind of oligarchic-like behavior that is not in the best interests of the consumer, whereby they don’t have a say at all in their pensions (their money) being scammed, taxes (their money being taken & spent) supporting the new welfare state, the oligarchs. As a Canadian who banks in both countries, I can only tout and preach about how easy and relatively safe it is to deal with Canadian banks. The fees that average Americans are paying for a shoddy banking system designed to benefit not them the consumer but the rich, lobbyists and political homage is a shame. I recently canceled my account at an inflexible unresponsive baboon of an organization that is definitely a rip off. It’s their privilege to have my money for the short time it’s there and not the other way around! It’s your money folks so do something about it! Democracy is a farce because YOU don’t matter as much any more. You are legislated to buy insurance that will do everything in it’s power not to reimburse you for what they claim you have access to with your fees. They’d rather spend it on their lawyer friends than to give it to you the person the money is collected for. It’s a legislated rip off just like the banks are!
I hope there are people starving in the streets killing each other. That is what this weak nation full of liberals deserve. Every time I hear the unemployment rate go up it makes me smile a little more. You people are no longer my countrymen you are my enemies. The true enemies to liberty are ourselves. Parish in flames.
Looky, looky. The right wing gestapo gets one person to publicly support their views and they crawl out of the woodwork like so many cockroaches. Listen, mein herren, you goosesteppers and your 'leaders' have gotten us into theis mess and it took them since Ronny Raygun's trickle down BS to get here. It cannot be fixed overnight and will most certainly be painful to undo ($$$). Every diatribe about energy or health care that you lampooners spew is basically saying 'don't change a thing'. Well, thanks but no thanks. Change is most definitely required if there will be anything to look forward to for my kids and future grandkids. You overconsumptive, hateful biggots can move or get out of the way because the next election and the one after it won't be good for you. They will only get worse.
And to be honest, I love watching your misery disguised as 'I told you so' diatribes. Let me give you a hint: this will take a long time and anyone with 3 digits of IQ and no agenda will tell you that. The hope is not gone with those that ran W and his ilk out of town, and the change will come in spite of your kicking and screaming. Hallelujah.
"George Bush, got us in this economic debacle in the first place. Everyone knew it was next to an impossible task to rise out of this debt anytime soon. "
---------------
More leftwing ignorance on display. You wouldn't know how the economy got into this mess if someone gave you cliff notes. This economy has become a mess for a variety of reasons and you should actually do some research on the subject instead of espousing your lame Bush Derangement Syndrome for every ill the country faces. The system is designed for boom and bust to benefit politicians of both parties and the bankers. Try starting in 1913 when Congress sold it's soul to the money changers and allowed the private banking cartel known as the Federal Reserve to come into existense. It's a match made in hell. Congress abdicates it's Constitutuional duty to coin money to a cartel of bankers in exchange to spend money with impunity. Rothschild remarked "Give me control of a nation's money
and I care not who makes the laws." So you see, US citizens have been nothing but economic serfs to the government since 1913.
Furthermore, all you leftwing fools who believe any political party is on your side has blinders on. They will never allow you to move up or get successful. If they did they would lose your votes as you probably would vote to protect your interests. As long as your kept stupid by public education and struggling, they can pander your vote and promise to help. Government is the kind of help no one needs.
Just trust in Obama, he will get it done and we will all dance in celebration!
Tax cuts and a war....this is why W was such a failure
This is happening in a very small town living off tourists
except that with the latest depression,
there are no more tourists.
Everybody borrows from everyone to survive...
Several months pass by, miserable,
then out of a blue day a tourist comes to rent a room,
and pays for it with a $100 bill.
He has'nt gone up to his room that the innkeeper runs
to the Butcher's to pay off his $100 debt.
The butcher in turns rushes the same dollar bill to the cattle rancher
who supplied him with meat.
the cattle rancher uses the bill to pay off his debt to the local prostitute.
The prostitute closes the loop by going to the inkeeper
to settle her debt on the room she rented occasionally by the hour .
As she lay the $100 on the counter,
the tourist is tellingl the innkeeper he dislikes the room
takes back his $100 and leaves.
Nothing has been spent, neither earned or lost.
Nonetheless nobody in town now has debt.
Isn't it the way we are trying to resolve the present world wide
monetary crisis???
I'm putting on appropriate comments but cnn won't let them go on because I'm not an Obama fan! I've done my research! I don't hate people that are Obama fans, I realize they haven't had time to do the research themselves. They only listen to what the liberal crap reported on cnn and major Networks. Watch Fox news so you understand what's really happening please!
Remember when Obama first proposed this thing before Congress even passed it? He said up front that it's not going to take weeks or months, but years! He said it will be a gradual release of funds not a lump sum dumped out onto the streets.
This administration is doing its best to clean up a mess created by the last 8 years or fraud, corruption and mismanagement. Don't blame Obama's crew for being corrupt or for mismanaging funds when the last administration spent 8 years trying to hide all the mistakes they made. Our new administration is trying to stay honest!
I love how all these people who don't like Obama blame all this havoc on him and his administration. ...Probably the same people that blindly supported Bush for whatever stupid reason. He [Bush] didn't give a crap about 95% of everyone in the country (only the richest ones), and yet you followed him. And for what? Someone please explain this to me!
Most people knew this months ago.
Consumerism is what fuels our economy. Individuals buying things they want. Our buying power has been eroded by years of outsourcing and cheap labor immigration policy. Until we address that, we'll be spitting in the wind.
the 24 hour news cycle is going to kill any shot that America has to make its comeback. we have all become so impatient that a mere 5 months passes by and we are expecting all of our problems to be solved. The stimulus may not end up being the success that it was supposed to be, but without it where would we be? Stop the short sighted complaining- and if you have a better idea, start a revolution. Until then, we are all in this together- regardless of party or ideology and we should all be hoping for the best. I stand with Obama on many issues, but when he makes mistakes I will acknowledge them. Calling the stimulus a mistake is dead wrong. Sometimes the options our elected leadership have are between bad and worse- not good and bad.
All these people that want to defend Obama for this porkulus payback plan to gift money back to those that got him elected, are a joke. I lost MY JOB UNDER OBAMA, I worked for all 8 years Bush was in office, and all 8 of Clinton's, and 4 more of Bush Sr's and all 8 of Regan's. YOU HAVE TO GO BACK TO JIMMY CARTER, that's the last time I was out of work, and surprise, surprise, that's exactly what we have now, a new Jimmy Carter in the white-house, weak defense, stagflation, bigger government, more social programs, hostile small business environment, the more things change the more things stay the same.
Maybe it would be helpful if the economist could meet with the President and his people and help improve the situation instead of criticizing it on TV
They are wrong. The only real way to get the economy moving is giving the money to companies, in either low interest loans or grants. This way they can expand their operations, create new products, develop new ideas. In each instance, they will need to HIRE people. Business create workforces and maintains workforces. Governments of all kind just SPEND, they don't create. If you give the money to local governments, aka shovel ready projects, once the project is done, the job is done and you don't have anything return for your money. Give it to the COMPANIES so they can grow the Economy, instead of paying off your buddies in government and buying $2000. toilet seats.
All Obama has done thus far is move the debt up one level. Now, not only are Americans still in debt and struggling, Obama has put the country in debt. Double the debt, double the fun. He needs to get the economy started and quick.
You can't undo a quarter century of deregulation/irresponsibility, neglect, and offshoring of jobs–promoted mainly by "free market" Republican Presidents and a Republican Congress–in six months. It may understandably take years to fix especially if well-paying jobs keep moving from the U.S. to cheap labor markets abroad.
Seriously, those of you who keep talking about how the government should just give every person $1 Million Dollars really must learn how to do math correctly. The population of the U.S. is between 305 Million and 310 Million, not 430 Million. 305 Million people X $1,000,000 would equal 305 Trillion Dollars, which is exponentially greater than the annual gross domestic product of the United States. That idea is nothing more than a fantasy; it never would work.
Having said that, I think everyone has to exercise a lttle bit of patience here. Everyone wants the recession to disappear quickly, and the truth is that it simply will not disappear overnight. It took years, yes years, for the nation to fall into this hole. I am not blaming only Bush or only the corporate executives; this recession was caused by numerous factors. We cannot realistically expect the economy to just bounce back to solid health in a matter of months. Obama and his advisors know this, and that probably is why they have chosen to distribute the money in increments instead of simply unleashing all of it at one time. If the government just tossed the $787 Billion to all of the states right now, I will be willing to bet that some states and cities will spend the money all in one area at once, and next year, that state will be asking for more. Receiving smaller amounts over a two or three year period will force these states and cities to pace themselves rather than spend the money irresponsibly.
Will this work? Only time will tell. If it doesn't, all we have to do is exercise our right to vote and send Obama into retirement.
Anytime the govt has anything to do with spending, it's gonna fail. They never have, and never will know how to wisely spend anything. Signing bills without reading them is like the people who bought homes without reading the contract. How many billions of the stimulus were spent on 'stupid projects'. Take off the rose-colored glasses...this country is jumping from the frying pan into the fire.
Uh, Nick - I take it you aren't a math wiz, eh?
"For the sake of ease, let’s assume that all 430 million are taxpaying working adults.
You give every single one 1 million dollars.
that would come to 430 million dollars.
That would be less then half of 1 billion dollars."
Not sure where you went to school, but 430,000,000 x $1,000,000 = $430,000,000,000,000, or $430 TRILLION.
Under your scenario (spending $430 million dollars on 430 million people), each person would get $1 buck. Try not to spend that all at once, OK?
After 8 years of a republican president who turned the surplus left by Clinton into a huge deficit and brought the country to the worst recession since the Great Depression, it's amusing to see these right-wing losers try to lecture democrats about how to revive the economy.
The stimulus plan has too many liberal pet peeve projects, Obama needs to wake up.
You have to remember who got us into this mess. It wasn't Bush as the press wants you to believe. It was Clinton who wanted all the poor people to own their dream houses. The NY times reported this back in 1999. Half of these people that bought houses couldn't read or speak English. They got snookered just like their getting snooked now by the left wing morons. Remember, things were going great for the first 6 years of Bush administration, Things started to fall apart when the Democrats took over congress. There's a lot of morons in this country that can't remember this and the press doesn't help to remind these people the truth. Most of these people got brainwashed by the press and Obama. These people will not realize that they got snookered until a significant emotional event will personally effect their lives. The botton line we need independent smart thinkes that can see the brainwashing that goes on in this country.
Sorry CNN, I know this is not what you want hear.
The economic crisis started with the housing bust.
The whole reason it boomed was due to risks by those buying a home they could not afford, and property investors interested in making the "quick buck".
It was the Democratic Congress, including Christopher Dodd and Barney Frank, who refused to acknowledge the anticipated consequences that the Bush administration warned of!
Dee get over the black thing America has.
Most people believe that Obama's stimulus is a failure there is no doubt about that...and most believe the reason why it is a failure is the stimulus was not stimulant in the first place Duh!
If you want to lower the trade deficit and bring business back to the United States, we need to end corporate taxes. To a corporation, taxes are just another business expense that gets passed along to the consumer, but because those expenses affect the bottom-line of the company, decisions about where to buy, build and own things are made based on those taxes. It's time that everyone understood that corporations don't pay taxes, you do. You pay them in higher prices for goods and services and while this indirect tax places the burden on only the people who take advantage of those goods and services, the end result is that companies move their business operations to other countries and that's clearly bad for the US.
If the stimulus package ends the recession early, America's
economy will experience very high inflation and then tank. If the
stimulus response is too slow then "stagflation" will set in.
I've seen all the recessions since 1973. My gut reaction is we're
better off in it than what may await ahead.
The comments here seem so contradictory. You want the stimulus money to be spent indiscriminately to create an avenue for high level corruption, so that at the end of the day, the administration will be blamed again for failing to foresee that and putting appropriate pre-conditions in place.
That's the problem when professors depend so much on theoretical stuffs they read in books.
"Excuse me, but the Bush Tax Cuts took us out of a recession and resulted in 6 years of outsanding growth. "
LOL.... I mean.. ROTFLMAO..
Thank you Tyrone......it's funny that so many forget that our previous president, George Bush, got us in this economic debacle in the first place. Everyone knew it was next to an impossible task to rise out of this debt anytime soon. When people chose Obama as president, they had it cemented in their heads that he was somehow going to magically wave his debt disappearing wand and the country would be saved. It doesn't matter if it is Obama or a reincarnated FDR. Bush made it impossible for his successor or next termed president to EVER fully recover from his 8 years of mess, just a thought.
If you find yourself in a hole, stop digging.
You cannot tax and spend your way to economic prosperity. Stop taking so much of my money, I will put it back into the economy (the private sector) where it belongs.
@Melissa, I'm forced to agree with Norm. You are an idiot. The health care 'mess' was decades in coming and not created by republicans. In fact a large part of the mess is due to out of control costs on government run Medicade and Medicare. these programs have greatly exceeded even the worst case costs 'doomsayers' predicted when the legislation was passed. The nonpartisan GAO predicts the esame massive costs for Obama's plan. How will he pay for it? Name one federal program that is actually well run, not full of waste and corruption, and that does what it's supposed to do.
Regarding the stimulus, Obama just said on CNN a few nights ago that the one thing that appears to be working better than predicted is bank stabilization. How were the banks stabilized? It was that first stimulus under Bush. So let's review, the Bush plan to stabilized banks worked, the Obama stimulus plan to create jobs has failed completely. Got it? And you want to give Obama more money we don't have for another stimulus. The definition of insanity is doing the same thing over again and expecting different results.
Yes. Send money to mayors and to governors and dictate the areas in which it must be spent. Otherwise the financial sector will prosper and the population will suffer.
There could not be a more flawed model than funneling money through various government institutions who have to comply with the very rules that Congress creates making it difficult to do anything simply.
Here's a novel idea: give us our money back, directly, so we can spend it, save it, invest it....we have almost no overhead and the effect is immediate and stimulative.
No one here is mentioning how the announcement of the stimulus package got Wall Street back on track. For those who say just give the money back well then Wall Street will fail. The real problem with this country is that 50% of the national budget goes to Social Security and Medicare. The same conservatives who love to bash those on welfare and the do-gooders who enable them to not live out of a box also don't have a problem cashing their social security checks and using Medicare for their expenses. These old conservatives just want a young guy like me to pay into their old age welfare, give them tax breaks on top of that and then agree there will be nothing left for me when I'm old. Just keep on propping up the levy.
Look – America is going to hell in a hand basket and Obama is leading the way. We're idiots to follow him, but that's the pack mentality of large groups for you. Government is hard to turn around - but once he gets us all pointing in the wrong direction - our enemies can go on vacation while this country falls apart from the inside. If we are lucky, America will be a footnote in world history.
...armchair quarterbacks.....that's what we need more of in this country...but he DOES look so smart in that bowtie...get int he thick of it...then MAYBE you can be a critic.
OK, so another economist has said that the Obama stimulus isn't going to work. We kept hearing that during the entire 5 days the Congress debated the plan. Well, guess what? It is working. It's putting money into the pockets of the wealthiest foreigners, foreign countries, and government red tape coffers. What it isn't doing is getting to the American public. This man has a point. Dole it out to the states with provisos. We have 50 states that could use the money and would probably spend it more wisely. It's the same-old politics in Washington. They always know what's best for the public. Obama inherited a mess, but his plan is making it worse. When he admits to that and stops throwing blame on everyone else then maybe he can help lead this country back to prosperity. After all, we elected someone who we thought could lead us, not whine about the mess he got. Very few presidents ever got elected that didn't have some kind of problem that needed to be solved. That's why WE pay these people the big bucks.Mr. President, listen to the people thru-out the country, they are the ones who can help you. Not the Washington insiders.
Conservative economists, liberal economists, it doesn't matter. They all agree that Obama passed a corrupt special interest oriented stimulous bill that isn't and won't create any jobs. That's what all of the critics said before Obama pushed it through in 24 hours saying we needed it to prevent catastrophe and keep unemployment below 8%. Obama slammed Bush because it took him 10 days or so to move people and equipment and supplies into New Orleans which had been wrecked by Katrina and an incompetent Mayor and Governor. Tens of thousands were hurt because it took so long. Obama only has to spend money and he's had 6 months? And millions and millions are paying for his lack of responsiveness! Many more than were injured by Katrina!!!!! So take a look at how Obama and the Government have handled stimulous. Do you really want them passing Cap, Tax, and Con? Do you really thing Obama should be taking over Health Care?
Melissa...you are like all the rest of Obama fans that swoon over the mere mention of his name. He's the wrong color and I don't mean black or white....he's green! 2 years as a Senator and some feel he's qualified to run the country? That's insane!! Wake up! He is running our country into the ground! ANOTHER stimulous plan? Why don't YOU pick up the tab on this one...we've had enough. So have our kids and the countless number of Americans not even born yet!
I'm a hard working mom tired of paying for Obama followers who only get off the couch to walk to the mailbox for their checks each month (and to vote for their favorite guy). I don't have a problem with helping folks out who need it but there are too many sponging off the system and it's killing us.
Illegal immigrants? Make them legal...give them each a social security number and let them start paying taxes too. I'm not a George Bush fan, I'm a fan of Amercia and it makes me sick to see the state our country is in. God help us all.
Nicely said. Now i the wise thing for the Obama adminstration is to get you on board for discussion and action.