Economic Stimulus: Tax Cuts vs Government Spending

[Trample the Elderly]

It really doesn't matter anymore. They're going to do what they want to do regardless. Governments never stop spending and rarely give tax cuts. So screw it. I was thinking, if you can't beat them might as well join them. Can I have a house now? Can I have a new car? I'd also like my social security and some spending money. How about another rebate. I'll promise to spend it, because I'm a good little consumer. And all of you smart people sure know how to do things better than me. Shaz-am!

[Schneed10]

From a macroeconomic standpoint, the goal is simply to get money into the hands of the people so that they in turn spend it, which in turn creates jobs.

As long as the money goes to someone who will spend it, it will be the best way to kick start the economy.

[The Goat]

Originally Posted by saden1

Crowley only has superficial knowledge of economics and a host of other subjects. Her attempt at being serious and knowledgeable on The McLaughlin Group is truly sad. Perhaps Jack Germond was right.

Sometimes sad and sometimes hilarious. She sort of sounds like a bimbo stripper/porn star among intellectuals LOL. Anyway i'm pretty convinced the only reason she gets any credit is from being Nixon's toady all those years.

[Trample the Elderly]

Originally Posted by Schneed10

From a macroeconomic standpoint, the goal is simply to get money into the hands of the people so that they in turn spend it, which in turn creates jobs.

As long as the money goes to someone who will spend it, it will be the best way to kick start the economy.

I'd like to know if this scenario is truthful. I'm not B.S.ing you Schneed. The government borrows money from China, Japan, and or Dubai. The government then gives that said money to the public. The public then goes out and buys goods manufactured in China and Japan. Is that a logical statement?

[The Goat]

Originally Posted by Trample the Elderly

I'd like to know if this scenario is truthful. I'm not B.S.ing you Schneed. The government borrows money from China, Japan, and or Dubai. The government then gives that said money to the public. The public then goes out and buys goods manufactured in China and Japan. Is that a logical statement?

I see what you're saying but think it would only work that way if every dime consumers spend went to China and Japan (or on imports for that matter).

... you're right too about how much it sucks borrowing money so much money as a nation.

[firstdown]

Originally Posted by Trample the Elderly

I'd like to know if this scenario is truthful. I'm not B.S.ing you Schneed. The government borrows money from China, Japan, and or Dubai. The government then gives that said money to the public. The public then goes out and buys goods manufactured in China and Japan. Is that a logical statement?

Put that way it seems kind of funny.

[Trample the Elderly]

Oh I forgot. Our government has to pay interest on that money it borrows. I don't see anything in my office that wasn't made in China, even my little American flag.

[saden1]

Originally Posted by Trample the Elderly

I'd like to know if this scenario is truthful. I'm not B.S.ing you Schneed. The government borrows money from China, Japan, and or Dubai. The government then gives that said money to the public. The public then goes out and buys goods manufactured in China and Japan. Is that a logical statement?

Yes, we do that all the time too and we're the biggest player in the IMF (we're the lone country with veto power plus 17% voting power) and World Bank (the institution's head must be an American). Of course we also have USAID which is our "charitable" arm where money given/lent has an implicant requirement of "Buy American." BTW, the stimulus package contains a clause that says buy American which is stupid.

We're at the center of the world economy. If we go down, everyone goes down. China will revert back to an agrarian society if we went poof.

[saden1]

The question is what will people be doing with the tax cut money in the next two years? Will they be buying essential goods (food, school supplies, and cloths) or non-essential goods (cars, big screen TVs, and that nice new shaver)?

[steveo395]

Tax cuts are definitely the way to go, not more government spending, which is already way too high. Government spending does not help the economy, especially this $800 billion "stimulus" package thats in congress now. It is just a huge grow government spending bill that isn't going to work. Giving more money to welfare and government healthcare and bailouts is just going to make more people dependent on the government.

If you want people to have more money to spend, cut their taxes so they will be able to keep more of the money they earn. It really isn't that complicated. They have worked in the past and they will work again, but government spending also needs to be cut, so we don't add on even more to our ridiculous debt, unlike what Bush did.

[Trample the Elderly]

Originally Posted by saden1

The question is what will people be doing with the tax cut money in the next two years? Will they be buying essential goods (food, school supplies, and cloths) or non-essential goods (cars, big screen TVs, and that nice new shaver)?

That depends on who's asking. If it is to get the money, I'm all ready to be a good consumer for the cause. If it is after I've gotten the money, it will go into my retirement account where I can make interest off of it.

I'll have to do my homework on the IMF and the World Bank. I've heard of them but I just assumed they were currency cartels set up ny the central banks to manipulate the real value of money.

Why does it have to be either or? Why have tax cuts or bailouts? Why can't we just stop spending?

[Schneed10]

Originally Posted by Trample the Elderly

I'd like to know if this scenario is truthful. I'm not B.S.ing you Schneed. The government borrows money from China, Japan, and or Dubai. The government then gives that said money to the public. The public then goes out and buys goods manufactured in China and Japan. Is that a logical statement?

Yeah but you make it sound like that's a bad thing for the US. It's not.

Many of those companies employ our workers, many assemble or make their products here, many of those companies' shareholders are US citizens, and they all pay taxes in some form or another to the US government (albeit with plenty of loopholes).

The US derives more overall benefit by buying the product that brings the most value for the money, regardless of the company's origin.

[Schneed10]

Originally Posted by saden1

The question is what will people be doing with the tax cut money in the next two years? Will they be buying essential goods (food, school supplies, and cloths) or non-essential goods (cars, big screen TVs, and that nice new shaver)?

Like I said, poorer people will feel financial pressure to tap into that money for essentials. That will boost earnings, profits, and ultimately stock prices.

Stock prices are the biggest driver of consumer confidence. Once the stock prices start coming back up, a lot more people will feel easier about opening their wallets. And before you know it the nation's velocity of money is at full tilt again.