USA tax rebate

[Zythryn]

Originally Posted by Michaelangelica

http://www.nytimes.com/2008/01/25/op...ml?ref=opinion

I don't get the reasoning. Are people that earn 50,000 a year getting two checks where people that are not in 'fairly good financial shape' getting only one? That statement seems non-sensical.

[Zythryn]

Originally Posted by freeztar

How will services decrease?

While it may be simplistic on my part, it seems to me if the government doesn't have enough money it can do one of two things:
Raise taxes (this could be tarrifs, income tax, SS tax, etc) or
Cut spending (this is where the 'services' part comes in).
Now, it may not be services you depend upon directly or it may be services that need to be cut anyways.

[Racoon]

I don't like the idea/plan much.

What I would do, is somewhat more Rooseveltian.
Create thousands of good jobs rebuilding the crumbling infrastructure and modernize antiquated systems with the money instead!
That would spur more sound growth in my opinion. People able to pay a mortgage and feed their kids. And get something accomplished.

People given $300-$600 will go buy something thats made in China, and/or blow it quickly.

Short-term sightedness, with long-term problems looming.

[Zythryn]

I like Racoon's idea, Racoon for president!!

[Michaelangelica]

Originally Posted by Zythryn

I like Racoon's idea, Racoon for president!!

me too
Does he know Monica?

I guess they want something quick rather than useful.

For this (quick) my vote would go to doubling food stamp allowance. This would get money into the hands of those who will spend it the quickest.

My feeling is the middle class will just pay off their credit cards/house mortgage which may help the stupid banks like Citibank but will it kick start the economy?
"When the USA sneezes the world catches a cold"

Then I think the USA should look at creating a uniform National Unemployment Scheme rather than a various, different or non-existant state-run ones.

PS
just found this.

Poll: What Would You Do with a Tax Rebate?
Both the President and the US Congress are mulling over ideas to stimulate the struggling US economy. One proposal is an emergency tax rebate. Different versions of the idea are being considered, with any tax rebates expected to be in the $500 - $800 range for individuals and $1,000 - $1,600 range for those who are married and file returns jointly.

There is a wide range of opinions over whether such an unexpected taxpayer windfall would help the economy at all. Over the past few years, the economy has enjoyed riding on the back of consumer spending to keep it afloat. Those who believe that tax rebates would stimulate the economy hope this will be the case.

Poll: What Would You Do with a Tax Rebate?
How Would You Spend a Tax Rebate?

• Spend it on luxuries
  
• Spend it on necessities
  
• Save it
  
• Pay bills
  
• Invest it
  
• Start a business
  
• Other/Not Sure

Only the first two choices will help the US economy.

Personally I would pay it off my userous Citibank credit card at 19.65% interest. How could they loose ten billion charging that sort of interest?

[DFINITLYDISTRUBD]

“It will help to stimulate our economy in the most direct and effective way possible: by putting money back in the pockets of middle class families, and by giving employers incentives to create new jobs and grow our economy,” the Ohio Republican said.

They said the same thing when they hiked the minimum wage. What happened... the "middle class" took a big hit in their pockets. (supposedly me and wifey put together equals middle class...it's pretty friggen tight... the "break even'' income bracket here is $40,000 a year) When will we get a govt. that actually understands how economies work??!?!?!?!?

It's simple math raise the you lowest wage you increase the cost of goods and services...hike the price of fuel...the cost of everything else rises correspondingly...Why? (Somebodies bound to ask) Farmers need fuel to power their equipment to grow food...The cost of food goes up...truckers and railroads need fuel to deliver it...the cost increases further...everybody needs to eat so minimum wage is adjusted to compensate...the cost of everything
else follows suit...now what rarley follows suit are the wages of those above minimum wage therefore they lose spending power...focus less on nonesentials...spend less...causing recession and if things proceed further depression.

And I quote (Motorcyclist 1994-High Efficiency Motor Oils)

For every solution the govt. comes up with two more problems are created.

[Cedars]

Originally Posted by freeztar

I agree, but my brother's point was that income tax is much higher than sales tax and there is a potential that many illegal immigrants will recieve checks (siphoned away to Mexico perhaps).

There will most likely be some illegals who get rebates. Theres going to be drug dealers getting rebates too (more money siphoned to mexico). But Hey, its all part of the global economy right?

[Cedars]

Originally Posted by Erasmus00

Actually, the problem is really one of loans, more then credit cards. The government passed some laws that allowed for "creative loans" and more lax loan restrictions. The reasoning was that it would create more home owners, and home ownership=economic stability. These "creative loans" were partially responsible for the housing boom through the early 2000s.

Banks gave out these subprime loans under the theory that (since the housing market was booming) if they were forced to foreclose on a home loan, even while they lost the loan money, they could sell the home at profit (again, due to the housing market boom). In a sense, these subprime loans allowed banks to speculate on the housing market.

Normally, banks would never speculate on something so risky, but to encourage these type of home-ownership loans, the government put in a safety net. The banks could fund loans through fanny-mae and other (essentially government funded) lending houses. So, with controlled risks, banks speculated with these loans. The housing bubble burst, and the banks started really hurting.
-Will

Yeah, its all credit that turns into red-ink when it flows to easily.

[InfiniteNow]

Originally Posted by freeztar

Why? Are ALL our leaders (bipartisan Congress included) lost?

That was not my intent. Basically, how the world perceives those in control of the money directly impacts what they do with their own money, and whether or not they will let you hold it. If they don't have confidence in you, they will put their money elsewhere.

Originally Posted by freeztar

My brother would gasp at that. If people put their money into banking accounts and it is the banks that are hurting most right now, then how will that not help?

The bigger point was people paying off bills. If bills get paid off, then the financial industry loses funds generated from interest. If they lose funds generated from interest, then they have even less money than they do already.

The economy is like an enormous ecosystem. Right now, the base of the food chain is dying, and it's causing domino/ripple effects elsewhere. Sub-prime debtors are not paying mortages, banks are not receiving payments and hence cannot make their own payments to other banks, and people are puckering the proverbial bungholes of their savings and wallets in anticipation of a huge drop in the value of the dollar.

That is why the government feels a stimulus package will help. They sense it will "unpucker" those bungholes and allow more spending. What they're missing is:

1) Only a small fraction of the funds will ever be spent on goods and services, as most would use it to pay bills or save for later,

2) It is a treatment of the symptoms, not the cause. It's like using a bandaid on the chest to treat a punctured lung,

3) The US economy has been negatively impacting world markets for several months, and seeing the US spend EVEN MORE money is not quite a confidence builder for those who are currently capable of investing in the US.


It's a giant ecosystem, and this stimulus package is akin to using creationism to decide how to manage our dollars instead of the tenets of natural selection.

[CraigD]

Until I’m able to read AMERICAN JOBS CREATION AND ECONOMIC STIMULUS ACT OF 2008 (HR 5101) (its thomas publication has not yet been published), it’s difficult to comment on the bill. However, based on many public statement made by people who have read it, I think we can address fundamental principles, and make some reasonable guesses about the bill.

Like the 2001 Economic Stimulus bill, this one is said to be based on the idea that the US economy is suffering from a lack of cash “liquidity”. In short, too many people and businesses are unable to purchase goods and services because they have no cash, and are unable or unwilling to borrow cash. The bill aims to allow these people and businesses to again, for a short time, be able to purchase goods and services. It is assumed that manufacturing and services currently have excess capacity, so will be able to sell these additional goods and services at about the same cost to themselves as if they were not selling them. In short, factories, restaurants, etc. are paying salaries to people who are standing idle for lack of business.

For such a plan to work, it must give money to people who will spend it quickly, and who would not if not given the money – in short, to the poor. They must spend it on US, not import, goods and services.

The bill’s primarily Democratic authors are said to have intended the bill to be limited to low income people, and welfare recipients, but due to pressure from Republicans who feel that this in unfair on ideological grounds, the bill has been expanded to provide rebates for individuals earning up to $65,000/year, or families earning up to $130,000/year, and exclude people who paid no income tax in 2007. About 1/3 of the $180 billion bill is not a cash gift, but a one-time tax reduction for businesses, the idea being that businesses will take advantage of this reduction by buying more goods and services.

Assuming, as seems likely, that the bill passes the Senate, how well it will work will, I think, be difficult to predict, even with its final text and the detailed text of enacting regulations to review. The similar but smaller 2001 bill had, in the opinions of most objective analysts, limited effectiveness, in large part because about 1/3 of it was not spent, but saved, while the largest single category of goods or services on which it was spent was clothing, which is predominantly imported, and thus benefited mostly non-US economies.

On a cynical note, I believe that politicians of all parties feel that publicly supporting the bill is politically necessary, because many US voters simply favor leaders who they believe will give them money gifts. Compared to the complicated work of trying to determine the policies favored by various leaders and the impact of these policies, a voting strategy of “I will vote for whoever gives me the most money” is far from the least rational I’ve heard.