More Active Posts
Front PageRebate = Band-Aid?
 |
 32 Comments |
In light of a sagging economy, everyone seems to have their own ideas about what can fix the nation’s financial woes. President Bush is set to unveil a fiscal stimulus plan later today, which is said to include the possibility of a tax rebate up to $800. Additionally:
In a key concession to Democrats, the U.S. administration appeared willing to accept stimulus legislation that does not include an extension of Bush’s tax cuts, the [Wall Street] Journal said.
Congressional Democrats, meanwhile, are suggesting they would be willing to suspend their own budget rules and accept a tax break without first figuring out how to pay for it, the Journal said.
A spokesman said Bush believes “short-term temporary measures are needed to help the economy through this period.” Do you agree? Or are short-term measures just Band-Aids and a waste of time for gaping wounds?
 |
Topic: WorldMagBlog |  |
Email a friend |
 |
Keywords: economy |  |
RSS 2.0 |
 |
You can skip to the end and leave a response. Pinging is currently not allowed. |  |
Share this: |
President Bush should not cave on this, IMO. The tax breaks have done wonders to our economy, and since both Congress and Bush are rushing to send checks to taxpayers he should be able to insist on extending the tax breaks as well.
The rebate would be a band-aid, but making the tax breaks permanent would be a real fix.
The President’s tax cut worked - revenue poured into the US Treasury. The problem is Congress spent and earmarked more money than the government took in.
Wow they want to give me back some of my own money. Oh how wonderful of the government!
I like Michelle Malkin’s idea for solving the housing crisis - SUCK IT UP!
On this issue the President has become a lame duck - quack quack
Outkast is right about the band-aid. No short-term stimulus will solve the basic economic problems. caused by earlier easy money, low savings, and the fallen dollar.
The problem is that this is an election year and it is difficult for the Republicans to resist caving to
economic hysteria.
Economic hysteria is correct, but Congresses in both DC and in state capitals, have been part of the problem by their incessant meddling. I’m sorry for the troubles people are going through, but there is a lot of blame out there and government should be front and center for finger pointing. Right after the individuals who made foolhardy decisions.
Who, ultimately, will pay for this borrowing? Doesn’t anyone realize borrowing is a large part of this mess?
And could someone please ask another elephant-in-the-living-room question, at least for those of us out here where casinos are springing up right and left: “Do gambling losses play into any of the money problems people are having?”
If it looks and sounds too good to be true, it probably is. That maxim has saved me many times.
An additional thought - how much of the stock market slide of late is due to the presidential prospects from either party? I mean Wall Street does pay attention to the polls and to the primaries. This is an issue I’ve not seen discussed. Ooops, I forgot, it’s “W’s” fault.
Bernanke (who opposes long term tax cuts on the grounds that they destabalize the economy) favors the short term aid, has said that inflationary pressure will be lifting soon, and hinted as more interest rate cuts.
I’m not sure Ivan, but I am definitely waiting to see if McCain gets elected before I invest in anything not FDIC insured! War has not been good for the economy.
Ivan, you are terrible. just joking, bro. Actually, if memory serves me correctly, isn’t the name IVAN russian for John? (my real 1st name)
Not far into President Bush’s first term in office, I received a tax rebate check for $300. I was astounded! Never had I received a tax rebate before…….and I thought, “This guy knows the value of American people.” However, I have found President Bush to be a disappointment, in other ways, naturally. The thought of a new rebate makes me glad. It is a slight band-aid for something that is easily done while still in office……..LOWER THE TAX RATES!!! President reagan cut them across the board, and even made Congress understand that it’s our money, not theirs!
Luke - IMO McCain’s anti-pork stance is fine; but the rest of his positions are slightly to the right of Hillary.
Bernanke’s position supports bigger government. I’m not certain the war is sinking the economy - consider unbridled government spending, earmarks and entitlements aka creeping socialism. We have got to wean people from the government feedbag.
Is this a band-aid? Yes
Is it a bad band-aid? Not at all.
To say that just a rebate will help solve the economic woes is less than honest. This is a small part of what needs to be done to stimulate the economy. Namely, we need to get our debt under control and paid off, encourage people to save, and to open up free markets to stimulate growth.
I am all for getting back more. Yet, it is a small solution to a bigger problem.
It is a teeny-tiny band-aid for an arterial bleed.
*We need to stop having income tax used to fund local projects.
*We need to dismantle or ruthlessly downsize most of the government departments and agencies.
*We need to create a fair tax system that allows business to grow and individuals to prosper.
*We need to wean people off their dependency on redistributed income and expect them to rely on themselves or on their families, their neighbors, and private charities.
*We need to stop bailing out companies and industries that fail.
*We need to decrease our dependency on foreign oil.
These measures would be a pretty good start. However, I’m not going to hold my breath. Until a worse crisis forces us to take some or all of these measures, we’ll go on thinking that the solution is to shift money around from the people to the government and from the government to the people.
Malkin is right and people need to suck it up - not just in housing, but using credit in general. Stop using credit and going into debt and save and invest.
I used to be amazed that so few people cared that the government spent so much and ran up huge amounts of debat until I realized the average American does the same thing.
Most importantly, Bush and Congress should not bail out the banks and other financial institutions that are reeling from the credit crisis. They need to take their lumps and be held accountable.
I like BandAids for my owies.
I don’t think the rebate even qualifies as a temporary fix. It’s a slight of hand transfer payment from current or future high income earners to those with lower income. And yes, the Fed eschews tax cuts because we blow out the budget with deficit spending. Balance discretionary spending and maintain a reasonable level of infrastructure debt and they may favor tax reductions. Someone has to play grown-up for Congress.
I pretty much agree with Outkast’s original post. Keep the tax breaks and send the rebate. If nothing else, the band-aid rebate will give people a psychological lift.
I also liked the following ideas from KyleA:
*We need to wean people off their dependency on redistributed income and expect them to rely on themselves or on their families, their neighbors, and private charities.
*We need to stop bailing out companies and industries that fail.
*We need to decrease our dependency on foreign oil.
We need a much more progressive tax system. As taxes on the wealthy have dramatically declined (from 80+% to 30%) over 40 years and taxes on the poor have virtually disappeared, an increased burden has fallen on the middle class and our chronic deficits have been financed by foreigners. Of course the share of the tax burden born by corporations has also dramatically declined.
Government dollars that are invested here, in infrastructure, incubators and the like do produce results, and for many people direct subsidies are the only thing between them and starvation or homelessness; those who scream for spending reductions ignore this and then generally advocate more government spending to arrest prosecute and imprison those who have been rendered desperate when the “safety net” is withdrawn.
By far the biggest current economic problem we now have is dependence on foreign oil; it drains tens of billions from our pockets every day. Much of it goes to the foreign producers, but a lot remains in the hands of oil companies and their executives, lobbyists and chief honchos including the Bush family.
A massive, “this really is going to hurt for a while” government program to develop, foster and require alternative energy sources and usage is the the first prescription for our long term economic survival.
The second is require a much more substantial contribution to our collective well-being from those who benefit the most from our very stable, predictable and massive economy and wealth protection schemes, yet persistently outsource jobs, offshore their profits and firmly believe that taxes are only for the little people.
A slow economy needs people to spend money. That is why this is a good idea. Yet, it is not the sole solution. The solution to the problem is not just a rebate and not printing more money. The solution is to stimulate the economy in various other ways including limiting the spending of government so to balance the budget, creating free markets, and becoming a more responsible society with money.
BTW, at best estimates, we will be dependent on foreign oil for another 20 years (probably more). I agree this is a problem, but to say this will solve our current financial woes is less than honest. Current financial problems must be faced with the understanding that oil is a long term solution to the economy as a whole, not a short term solution to the current economic problems.
Band-Aid . . . too little, too late . . . not worth the effort . . . whatever. At least OUR money is headed in the right direction for once.
Arcadia,
Nice rant—straight from the playbook or did you ad-lib?
“By far the biggest current economic problem we now have is dependence” . . . on the federal government to “solve” a limitless number of personal problems stemming from our inability to recognize and accept personally responsibility for our decisions and actions.
Victimhood has become an art form, which attracts government fix-it junkies and their lawyers like flies. It’s practiced by those making no monetary contribution to the solutions they seek and are enabled by the Arcadias of this world who would have us believe those solutions are required.
The problem is neither part, R or D, has the stones to rid the federal government of its entitlement programs, which is causing the fiscal mess with our federal government finances.
It would be a political kiss of death for any presidential candidate to announce he/she would cut SS, Medicare and Medicaid - or even to cut back the benefits drastically.
Even if elected, that candidate would have to ram it through a reluctant Congress.
Rebates and tax cuts will only work for so long. Pretty soon, we are going to have to either 1) cut entitlements or 2) pay for them directly from our pockets - no more deficit spending.
Foreign borrowers are beginning to worry about the dollar’s falling value and have started to cut back. They own too much of our debt already. Why would they want more when it just decreases in value?
Who knows, maybe the Communists in China and the Islamofascists in Riyadh will ensure we get rid of our entitlement programs - they’ll stop loaning us the money.
Ivan (and most likely others),
How do you justify claiming that $800BILLION in deficit spending for the war is not bad for our economy? Compared to Iraq spending, earmarks are chump change.
If we could get that money back, I would gladly give corrupt Republican senator Ted Stevens all the transportation funding he wants for that little island.
According to a recent WSJ editorial, close to half of all americans do not pay income tax thanks to our progressive rates and the child tax credit.
#16 ARCADIA
What would be so unfair about a 10% Federal tax rate and 5% State sales tax rate? No deductions, everybody pays. No government borrowing.
Everybody can vote so everybody should pay taxes. Everyone in the US is equal so everyone should pay equal rates.
Just about all other tax systems leave some “wiggle room.” This means that some people can cheat.
Only real live people should pay, not companies. The only company money that should be payed is on money that goes out of the US.
answer to Luke # 21: Because beefing our already strong military assures us that 9-11-2001 never happens agin. Yes, I agree it is not the only thing that helps our economy, but so do lowering taxation, simplifying the tax code, appointing Constituion constructionists judges to the federal bench, et al.
I also do NOT support the rate of fed spending as it has been the last 8 years, it’s to the point of governmental pornography.
I agree with Bob’s idea of a 10% fed tax and the 5% state tax. That is actually more realistic than a national sales tax. Nice idea Bob. Let’s pray we can get a president who can impliment it.
The stock market fell 300 points after Bush spoke Friday. That’s resilience, Republicans!
Hillary proposed a $110B package so Bush comes in with $156B. He also scolds the Democrats for the recession. Hey, might as well make some lemonade!
In his radio address for New Year’s, Mr. Bush declared, “One of our greatest blessings as Americans is that we live in a country with a growing economy.”
Many economists think the United States entered a a recession in December.
I’m for a flat-rate tax on only one condition: End social security, which is already a flat-rate tax that kills lower-income self-employed people. Right now, I pay more in social security than in federal taxes because I don’t make all that much and social security doesn’t recognize exemptions. So any across-the-board tax would hurt me. Being self-employed (paying full social security, not just half), I already pay too much in taxes and don’t want to pay more. But end social security’s mandatory nature, even if I never receive a penny of the many thousands I’ve already paid in, and it would be OK with me to pay more federal taxes. Another across-the-board tax that starts with the very first dollar I make, no.
End social security, which is already a flat-rate tax that kills lower-income self-employed people.
Please. Do you know how much disability insurance would cost you? Do you know how much it would cost you to take care of your old folks, if they didn’t have social security?
Lester, no one can ram social security or medicare cuts through the Congress. Congress won’t do it. The people won’t let them. The only thing I think would get through would be a cap, i.e., if you make a certain amount of money, you don’t get a monthly check. Take federal judges. Why should a guy making $175,000 a year get social security, too? He shouldn’t. (When judges look for an increase in salary, they don’t tell you about their retirement “plans” which we’re also paying for, any more than our dear Congresspeople do.)
Neo-con myth
#1 Tax cuts stimulate the economy
#2 Debt/Deficit is caused social programmes.
Reality;
In the late 80s, interest rates were in the double digits, deficits were increasing and the debt looked unbeatable. Most economists argued that social programmes needed to be massively cut and the politicians delivered yet nothing improved and the tight monetary policy caused stagflation. Some leftist argued for the lowering of interest rates which in turn would lower debt repayment and thus fixed the deficit the first step. Under the liberal regime in Canada, they allowed the CAD dollar to drop to 65 cents as they continued to lower interest rates so prime was 3-4% at one point. Budgets were balanced in little less than two years and debt repayment has continued unabated as Canada has the lowest debt to GDP ratios in the G-8.
AS soon as the budget was balanced, neo-cons no longer cared for the debt and began to demand massive tax cuts to stimulate an economy which didn’t need a stimulus. The liberals who had been convinced earlier of the importance of debt repayment wondered why the neo-cons had changed their mind. Gradually they understood that the neo-cons would never be happy until there was a minimal state and would advocate any policy which would bring this about. Tax cuts are advocated not to stimulate the economy but to starve the state until it has to strip itself to the bare essential.
Tax cuts were delivered in the last five years, beginning in the the last few years of the liberal gov’t and has continued under the conservatives. Tax cuts were given because social programmes had been refunded and the debt was easily controlled. Once this occurs, Keynesian economics call for tax cuts as the money is no longer needed. If a recession occurs, the gov’t needs to keep the tax rate and use tax money to direct stimulus in appropriate areas.
Exactly my point, NJL. What needs to be done will never get done - until something or someone forces our hand. Increasingly, it looks as if the forcing will come from foreign countries, who lend us the money we need.
At some point, they will be tired of losing value on all the dollars they hold in reserve. Already, the Chinese, Saudis and other Gulf States have ordered their national banks to lower the amount of dollars they hold and increase the amount of euros. The Saudis have even toyed with replacing the dollar with the euro for oil purchases - forget petrodollars; it will be petroeuros.
Without the option of borrowing, the government will have to stop spending. And ending earmarks will do little. Our top expenditures are: military, social security, medicare/medicaid and debt financing.
And that’s where Congress and the President will have to trim the fat.
Or raise taxes.
I sure hope there’s a republican in the White House after the 2008 elections or our tax rates will skyrocket.
NJLawyer,
Why should that same lawyer be forced to pay into a system that is advertised as his retirement? I could pay off my home mortgage with the amount I’ve paid into social security through the years. I could then take every dime I’d pay to the mortgage, and to social security too, and save for my own “retirement.” (The idea that able-bodied people should simply stop working at a certain age and let other people pay their expenses bothers me, too.)
People should be responsible for their own savings. If government would stop taking it and reassuring us they’ll be there for us in the future, people would be more inclined to take the responsibility themselves–and would have more money to save! Yes, children might have to come alongside their elderly parents sometimes, and the church and the community might have to help out sometimes too. But I’d rather see that than have this forced giving of 15% of every dollar I earn!!