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Wrong Stimulus, Wrong Time
rfenst Offline
#1 Posted:
Joined: 06-23-2007
Posts: 39,251
Biden wants twice the spending of 2009, though the economy is far stronger now.

WSJ Editorial Board

Democratic economist Larry Summers and former GOP Senator and economist Phil Gramm don’t agree on much. But when they do, it’s probably worth paying attention. Now they’re both warning that President Biden’s $1.9 trillion spending plan may carry more risks than benefits.

Mr. Gramm made the case in our pages this week, and Mr. Summers in the Washington Post on Friday. Their economic vantage points are different, but they both suggest that the Biden bill’s focus on spending so much at the current moment to boost consumer demand is misplaced. The economic data increasingly backs them up.

That’s true despite Friday’s report that the economy added a disappointing 49,000 new jobs in January. The jobs report undershot expectations, but the details show that most of the damage to the labor market comes from state lockdowns and supply constraints. Payrolls were revised downward by a combined 159,000 for November and December as states shut down businesses.

Manufacturing employment declined by 10,000 in January amid shortages of components and workers. Some have hauled in office workers to run their assembly lines. Notably, the average work week for all private and manufacturing employees increased by 0.3 hours as businesses utilized their workers more.

Especially striking were the job losses in nursing homes (31,000), home-health care (13,100), transportation and warehousing (27,800), general merchandise stores (30,500) and online retail (14,800). Employers in these industries are desperate to hire, which Congress made harder by reinstating the $300 per week in enhanced jobless benefits through mid-March. Most low-income workers can make more unemployed.

***
President Biden and Democrats nonetheless jumped on the jobs report as justification to pass their $1.9 trillion spending bill. They say another six months of enhanced unemployment benefits, $1,400 checks to individuals, $130 billion for public schools, $350 billion in aid to state and local governments and a potpourri of transfer payments is needed to give the economy a shot in the arm. It could end up being bad medicine.

Democrats compare the current moment to the recession of 2009 and Barack Obama’s $800 billion spending bill. They say this one needs to be larger. But that comparison works in the opposite direction because the current economy is far stronger than it was in February 2009.

Then the economy was still in a recession that didn’t end until June 2009. The jobless rate was rising and would peak at 10% in October 2009. Today the economy has been growing for two quarters, including 4% in the fourth quarter. The jobless rate is already down to 6.3%, a rate it didn’t hit during the Obama years until spring 2014. The black unemployment rate in January (9.2%) is already lower than it was during the first 79 months of the Obama Presidency.

As for spending stimulus, the $3.7 trillion that Congress passed last year in virus relief already far exceeds what Democrats spent during the 2008-2009 recession. Personal transfer receipts increased last year by $1.1 trillion, or about as much as from 2008 to 2010. Couples making up to $150,000 received $3,600 in direct payments last year plus $1,100 for dependents. That’s three times more than from the 2008 Bush tax rebates.

Personal savings soared as high as 33.7% in April following the Cares Act and were still a healthy 13.7% in December before Congress passed another $900 billion in Covid aid. This means that, unlike during the 2009 recession, households aren’t weighed down by debt.

Personal bankruptcies, home foreclosures and loan delinquencies last fall were the lowest since at least 2003. The mortgage delinquency rate was 0.7% in the third quarter of 2020 compared to 7% in the first quarter of 2009. Home-buying and prices are surging thanks to record low interest rates, and people can take equity out of their homes to spend if they need it.

Wages are increasing across most industries as employers compete for workers. By December aggregate employee compensation had exceeded levels in February. It took 34 months for the economy after the 2008-2009 recession to hit this milestone. Millions of leisure and hospitality jobs should return once lockdowns ease and vaccines roll out.

According to a recent House Budget Committee estimate, $1 trillion from last year’s bills hasn’t been spent—including $59 billion for schools, $239 billion for health care and $452 billion in small business loans. State and local governments added 67,000 jobs in January. They don’t need more federal cash.

***
All of this suggests that the economy is poised for a strong rebound as the pandemic eases even without new federal spending. Money for vaccines and low-income workers who are suffering the most is justified, but much of the rest will far exceed the economic or social need. As Mr. Summers puts it, if the Biden plan passes, Congress will have spent the equivalent of 15% of GDP responding to Covid before addressing any of Mr. Biden’s other priorities like public works.

Sooner or later all of this spending will have economic and political costs. The Biden spending bill is the wrong remedy for an economy that is growing. The best economic stimulus is to end the lockdowns and accelerate the vaccine rollout.
Mr. Jones Offline
#2 Posted:
Joined: 06-12-2005
Posts: 19,409
Why work when you make the same income or more than when you did work...

It's a no brainier....

Plus way over 50% of these unemployed people are working for cash under the table and not paying any taxes on that ILLEGAL income and barely anything on the unemployment plus $300 extra federal unemployment bonus a week...

I know many MILLEniAL s who ride that entire March 2020
To July 2020 extra federal +$600 a week unemployment train....they now have 20x $600=$12,000 grand in their savings accounts for the down payment on a their first ever house ...which is really kind of good for the economy?
I think?

Not good for me though...I got a measely $1,200
Which went directly to school taxes and
$600 which went directly to my home heating oil overdue budget bill....
No economic stimulating by Mr. Jones at all...
Zero, nada... NEIN !!!!
RayR Offline
#3 Posted:
Joined: 07-20-2020
Posts: 8,881
Like Biden said, "America is back"
To the good old days of Obama/Biden I guess that means.
Spend, Spend, Spend, out spend those cheap Republican armatures.
We owe it to ourselves to counterfeit writ large. Bailout and stimulate at will.
When the peoples are crushed by inflation and the bubble bursts....blame it on capitalism.
delta1 Offline
#4 Posted:
Joined: 11-23-2011
Posts: 28,772
GOP/cons had no troubles with Trump's spending plans...


http://www.crfb.org/blogs/spending-has-increased-800-billion-under-president-trump
RayR Offline
#5 Posted:
Joined: 07-20-2020
Posts: 8,881
delta1 wrote:
GOP/cons had no troubles with Trump's spending plans...


http://www.crfb.org/blogs/spending-has-increased-800-billion-under-president-trump


That's a WHATABOUTISM, but yes I know. Criticizing the Trump Republicans and their irresponsible spending got me some sneering comments too.
DrafterX Offline
#6 Posted:
Joined: 10-18-2005
Posts: 98,535
I expected this... why did Trump spend so much..?? Cause Nancy & Chuck insisted on it... even allowed the gubment to close because they didn't get what they wanted.... then the said, 'I hope he learned his lesson'..... hypocrisy... Not talking
Krazeehorse Offline
#7 Posted:
Joined: 04-09-2010
Posts: 1,958
I blame Bush.
BuckyB93 Offline
#8 Posted:
Joined: 07-16-2004
Posts: 14,161
Where's mine?
BuckyB93 Offline
#9 Posted:
Joined: 07-16-2004
Posts: 14,161
NINE!
DrMaddVibe Offline
#10 Posted:
Joined: 10-21-2000
Posts: 55,389
delta1 wrote:
GOP/cons had no troubles with Trump's spending plans...


http://www.crfb.org/blogs/spending-has-increased-800-billion-under-president-trump



You heard about it here but chose to ignore it.
DrMaddVibe Offline
#11 Posted:
Joined: 10-21-2000
Posts: 55,389
Mr. Jones wrote:
Why work when you make the same income or more than when you did work...

It's a no brainier....

Plus way over 50% of these unemployed people are working for cash under the table and not paying any taxes on that ILLEGAL income and barely anything on the unemployment plus $300 extra federal unemployment bonus a week...

I know many MILLEniAL s who ride that entire March 2020
To July 2020 extra federal +$600 a week unemployment train....they now have 20x $600=$12,000 grand in their savings accounts for the down payment on a their first ever house ...which is really kind of good for the economy?
I think?

Not good for me though...I got a measely $1,200
Which went directly to school taxes and
$600 which went directly to my home heating oil overdue budget bill....
No economic stimulating by Mr. Jones at all...
Zero, nada... NEIN !!!!


https://rationalwiki.org/wiki/Cloward-Piven_strategy
RayR Offline
#12 Posted:
Joined: 07-20-2020
Posts: 8,881
The Cloward-Piven strategy is fundamental to all welfare-state programs. They were never meant to work as proposed and sold to the Boobus's. They were meant to overrun the system so that an centralized authoritarian system would be claimed to be needed at the federal level to save the day.
rfenst Offline
#13 Posted:
Joined: 06-23-2007
Posts: 39,251
Republicans Struggle to Derail Increasingly Popular Stimulus Package

Polls show a $1.9 trillion rescue plan polls strongly across the country, including with many Republican voters, despite a scattershot series of attacks from congressional Republicans.
N

NYT
WASHINGTON — Republicans are struggling to persuade voters to oppose President Biden’s $1.9 trillion economic rescue plan, which enjoys strong, bipartisan support nationwide even as it is moving through Congress with just Democratic backing.

Democrats who control the House are preparing to approve the package by the end of next week, with the Senate aiming to soon follow with its own party-line vote before unemployment benefits are set to lapse in mid-March. On Friday, the House Budget Committee unveiled the nearly 600-page text for the proposal, which includes billions of dollars for unemployment benefits, small businesses and stimulus checks.

Republican leaders, searching for a way to derail the proposal, on Friday led a final attempt to tarnish the package, labeling it a “payoff to progressives.” The bill, they said, spends too much and includes a liberal wish list of programs like aid to state and local governments — which they call a “blue state bailout,” though many states facing shortfalls are controlled by Republicans — and increased benefits for the unemployed, which they argued would discourage people from looking for work.

Those attacks have followed weeks of varying Republican objections to the package, including warnings that it would do little to help the economy recover and grow, that it would add to the federal budget deficit and possibly unleash faster inflation, and that Democrats were violating Mr. Biden’s calls for “unity” by proceeding without bipartisan consensus.

The arguments have so far failed to connect, in part because many of its core provisions poll strongly — even with Republicans.

More than 7 in 10 Americans now back Mr. Biden’s aid package, according to new polling from the online research firm SurveyMonkey for The New York Times. That includes support from three-quarters of independent voters, 2 in 5 Republicans and nearly all Democrats. The overall support for the bill is even larger than the substantial majority of voters who said in January that they favored an end-of-year economic aid bill signed into law by President Donald J. Trump.

While Mr. Biden has encouraged Republican lawmakers to get on board with his package, Democrats are moving their bill through Congress using a parliamentary process that will allow them to pass it with only Democratic votes.

“Critics say my plan is too big, that it cost $1.9 trillion dollars; that’s too much,” Mr. Biden said at an event on Friday. “Let me ask them, what would they have me cut?”

House Republican leaders on Friday urged their rank-and-file members to vote against the plan, billing it as Speaker Nancy Pelosi of California’s “Payoff to Progressives Act.” They detailed more than a dozen objections to the bill, including “a third round of stimulus checks costing more than $422 billion, which will include households that have experienced little or no financial loss during the pandemic.” Ms. Pelosi’s office issued its own rebuttal soon after, declaring “Americans need help. House Republicans don’t care.”

Republicans have also railed against the process Democrats have employed to advance the bill, citing dozens of legislative amendments that Republicans offered in various committees, which Democrats rejected. Last week, top Republican senators complained in a letter to Democratic committee leadership about plans to bypass Senate hearings on the House bill, describing it as “the outsourcing of their own committee gavels to the House.”

The Republican pushback is complicated by the pandemic’s ongoing economic pain, with millions of Americans still out of work and the recovery slowing. It is also hampered by the fact that many of the lawmakers objecting to Mr. Biden’s proposals supported similar provisions, including direct checks to individuals, when Mr. Trump was president.

“What they’ve tried to do is pick apart individual pieces of it,” Representative Richard E. Neal, Democrat of Massachusetts and the chairman of the House Ways and Means Committee, said in an interview. “But I think on an overall basis, you have to contrast that with how well this is being received across the country.”

Some Republican lawmakers and aides acknowledge the challenge they face in trying to explain to voters why they object to the package, particularly after reaching agreement with Democrats on several rounds of aid earlier in the crisis. Many of those negotiations were contentious and stretched for months; Mr. Biden has said he will not wait for Republicans to join his effort, citing the urgency of the economy’s needs.

“We’ve shown over five different bills we can do it together,” said Senator Shelley Moore Capito, Republican of West Virginia and one of the lawmakers who had met privately with Mr. Biden to discuss both economic relief and infrastructure plans. “I think we’re going to have to draw a contrast of what’s in there and does not make sense.”

While explaining their opposition to voters would be a challenge, she said, supporting the bill is not an option for most Republicans.

“The price tag in the end is just so inordinately high and has too many extraneous things in it to gain any real support in the Republican Party.”

The scattershot critique is a contrast from the last time a president used the parliamentary move, called budget reconciliation, to push a major proposal: the $1.5 trillion tax cut package that Mr. Trump and congressional Republicans passed in 2017 without any Democratic votes. Shortly before the first House hearing on the tax cuts, Democrats on the Ways and Means Committee made a plan to brand the bill as a “tax scam” benefiting the rich and the powerful, before Republicans could sell it as a boon to the middle class.

Representative Tom Reed of New York was one of the moderate Republicans who initially spoke with White House officials in a bid to reach a compromise on the stimulus package. Mr. Trump’s tax cuts took a hit in public polling, and they gave little boost to Republican candidates in the 2018 midterm elections that followed. Republicans have found similar success in recent years driving the popularity of signature legislation under Democratic presidents, most notably President Barack Obama’s Affordable Care Act in 2010.

Representative Donald S. Beyer Jr., Democrat of Virginia, recalled the warning he heard from leaders in his party in 2017: “Republicans are great at talking in headlines, and we’re great at talking in fine print.” Democrats’ ability to pick a pithy message and stick with it in the tax debate, he said, was “one of the few times we ran against type.”

Many Republicans remain confident that their attacks will begin to resonate in this debate. One senior Republican aide, speaking on condition of anonymity, said that with attention focused on the legislation this week, members would continue to highlight provisions that are seen as longtime liberal priorities, as well as the money left over from previous relief packages. Republicans also plan to question whether the new funds would deliver on promises to improve the economy and reopen schools.

“I think we do have an obligation to ask questions,” said Representative Tom Reed of New York, one of the moderate Republicans who initially spoke with White House officials in a bid to reach a compromise. He predicted that once voters focused on individual provisions that demonstrated the package’s largess and overreach, they would sour on the overall proposal.

“It’s human nature, and I get it, but can we try to move forward in a much more productive manner?” Mr. Reed added, echoing the process complaints already percolating among Republicans in both chambers.

Polls suggest that could be a tough fight for Republicans, as many of the bill’s provisions are widely popular. In the SurveyMonkey poll, 4 in 5 respondents said it was important for the relief bill to include $1,400 direct checks, including nearly 7 in 10 Republicans. A similarly large group of respondents said it was important to include aid to state and local governments and money for vaccine deployment.

They split evenly on the question of whether they are more concerned that the plan is too big, further driving up the federal budget deficit, or too small, and thus unable to quickly spur economic growth.

The fractured debate over the plan in and outside of Washington has also been largely overshadowed by the tumult within the Republican Party itself, where the specter of Mr. Trump and his impeachment over the Jan. 6 Capitol attack looms large and threatens to continue upending efforts to focus on conservative efforts to frame the legislation as overreaching and ineffective. (Mr. Trump, as recently as this week, was hammering Republicans for an unwillingness to accept direct payments.)

Given their slim majority in the House and the strict parameters that allow them to avoid the filibuster in the Senate, Democrats can afford few, if any, defections in order to send the legislation to Mr. Biden’s desk before unemployment benefits begin to lapse in March.
DrMaddVibe Offline
#14 Posted:
Joined: 10-21-2000
Posts: 55,389
Biden's Coronavirus Relief Package Has Almost Nothing to Do With the Coronavirus


The president keeps insisting on the urgency of $1.9 trillion in spending. But much of it would be spent on non-urgent policies unrelated to the pandemic.

Over and over again, President Joe Biden has pitched his $1.9 trillion stimulus plan as vital to restoring a struggling American economy and recovering from the pandemic. Many households are struggling, he tweeted earlier this month, with desperate Americans wondering how they are going to eat. "That's why I'm urging Congress to pass the American Rescue Plan and deliver much-needed relief." Time, he has insisted, is of the essence. "We don't have a second to waste when it comes to delivering the American people the relief they desperately need. I'm calling on Congress to act quickly and pass the American Rescue Plan."

The fiscal response, he has argued, must be commensurate to the crisis at hand. "Now is the time we should be spending," he said at a CNN town hall this week. "Now is the time to go big."

Biden has certainly gone big. His $1.9 trillion deficit-funded plan would be among the largest stimulus/relief packages in history. But much of the spending he has proposed would do little or nothing to help actually struggling Americans. Instead, the plan is padded with non-urgent, pre-existing Democratic policy priorities that have, at most, only tangential relationship to the crisis at hand.

Take schooling, for example. The mass closure of schools has caused immeasurable chaos and frustration for families across the country, especially those with working parents, and it has set back educational advancement for children, especially in lower-income families with fewer resources or alternatives. Beyond the disruptions to family schedules and educational achievement, there is mounting evidence that school closures, in combination with other forms of isolation stemming from the pandemic, have taken a dark toll on student mental health. In the Las Vegas area, schools finally reopened following a rash of suicides in which 18 students took their own lives.

Biden ran on reopening most schools for in-person instruction within a hundred days—a promise his administration has both walked back and then kinda-sorta attempted to un-walk back. But reopening, he has insisted, is conditioned on schools obtaining sufficient funding in a relief package. Accordingly, his plan includes about $128 billion for K-12 schooling "for preparation for, prevention of, and response to the coronavirus pandemic or for other uses allowed by other federal education programs," as part of a $170 billion boost in education-related spending.

This is a dubious argument on its face, considering that private schools have largely reopened, as have public schools in some states, such as Florida, that have pushed for faster and more widespread reopenings.

But even if you think substantial additional funding is strictly necessary for rapid reopening, there's a problem: The vast majority of the relief plan's money for schools wouldn't be spent in the current fiscal year, or even next year. Previous coronavirus relief and congressional spending bills have already included more than $100 billion in funding for schools. But according to the Congressional Budget Office, "most of those funds remain to be spent."

As a result, just $6 billion would be spent in the 2021 fiscal year, which runs through September. Another $32 billion would be spent in 2022, and the rest by 2028. Biden is insisting that schools must reopen soon—and also that the only way for them to reopen is to authorize more than $120 billion in spending, most of which wouldn't roll out for years. It doesn't make much sense.

Similarly, Biden's plan calls for $350 billion to backstop state budgets, which were projected to be down as much as 8 percent overall this year. Yet according to The Wall Street Journal, total revenues were down just 1.6 percent for the 2020 fiscal year, and 18 states ended the year with above-projection revenue. As Reason's Christian Britschgi noted last week, Biden's plan would disburse money to every state—including California, which is set for a $15 billion surplus. Previous coronavirus relief bills, meanwhile, have already doled out $300 billion to bolster state budgets. The billions in extra funding Biden's plan would deliver to soaring state budgets would, in all likelihood, not be spent this coming year. So much for not having a second to waste.

There's more like this peppered throughout Biden's pandemic relief plan. Biden and his communications team raise the issue of food insecurity—then insist that checks should go to a two-earner family with stable jobs making $120,000 a year in a city with a roughly $40,000 annual median income for couples.

This is despite the fact that the average couple with comparable six-figure earnings has experienced no unusual job loss and has piled up record levels of personal savings. Even if the goal is just to pump more money into the economy, these checks wouldn't, for the most part, be spent. They'd just add to the savings.

As the Committee for a Responsible Federal Budget (CRFB) notes, half the spending in the coronavirus relief plan would go toward such poorly targeted measures. The plan also includes expansions to Obamacare subsidies and would hike the federal minimum wage to $15 an hour—in 2025. Ultimately, the hike would cost jobs rather than preserve them. But raising the federal minimum wage has been a Democratic policy priority for years, so it got stuffed into the relief bill grab bag.

How much of this alleged coronavirus relief plan is actually related to the coronavirus? According to CRFB, just 1 percent of the relief plan's spending would go toward vaccines, and just 5 percent would go toward pandemic-related public health needs. Meanwhile, 15 percent of the spending—about $300 billion—would be spent on long-standing policy priorities that are not directly related to the current crisis.

Biden keeps insisting that time is of the essence, that massive federal spending is urgently needed to speed America's recovery from its coronavirus-induced health and economic downturn. But the practical details of his plan say otherwise. The president's relief plan is an object lesson in non-urgent, non-vital policymaking. Biden is pitching a coronavirus relief package that has very little to do with coronavirus relief.

https://reason.com/2021/02/18/bidens-coronavirus-relief-package-has-almost-nothing-to-do-with-the-coronavirus/


If YOU had to authorize this spending would you???

They would get a double barrel middle finger from me. Its YOUR money that your grandkids and great grandkids are saddled with debt.

OPEN THE ECONOMY ALREADY AND STOP F'N AROUND!
deadeyedick Offline
#15 Posted:
Joined: 03-13-2003
Posts: 17,068
Can't we just pass it to see what's in it so I can pay off my handlers?
~Joe
DrMaddVibe Offline
#16 Posted:
Joined: 10-21-2000
Posts: 55,389
deadeyedick wrote:
Can't we just pass it to see what's in it so I can pay off my handlers?
~Joe


That's about it.
RayR Offline
#17 Posted:
Joined: 07-20-2020
Posts: 8,881
The Progressive motto—why settle for a small time robbery when the opportunity for grand larceny presents itself.
rfenst Offline
#18 Posted:
Joined: 06-23-2007
Posts: 39,251
It's a GREAT BIG giveaway with borrowed money. But, if I am eligible, I won't turn it down.
Gene363 Offline
#19 Posted:
Joined: 01-24-2003
Posts: 30,796
rfenst wrote:
It's a GREAT BIG giveaway with borrowed money. But, if I am eligible, I won't turn it down.



True, after all it's not like we haven't sent enough tax cash the other way.
rfenst Offline
#20 Posted:
Joined: 06-23-2007
Posts: 39,251
Gene363 wrote:
True, after all it's not like we haven't sent enough tax cash the other way.

I certainly earned my due paying taxes before I retired, even though I know I don't "deserve" or truly need it.
zitotczito Offline
#21 Posted:
Joined: 08-21-2006
Posts: 6,441
I have been against this so called relief package but what can I do. I write to my Congressman and Senator's but they could care less about what I have to say. So as Robert says, if I am eligible, send it to me. I am to old to worry about someone else having to pay the piper in the future.
Gene363 Offline
#22 Posted:
Joined: 01-24-2003
Posts: 30,796
rfenst wrote:
I certainly earned my due paying taxes before I retired, even though I know I don't "deserve" or truly need it.


You deserve to get back (your) money especially when the Feds would simply "set it on fire", e.g., stimulus funds to their corporate sponsors.
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