Economic Stimulus: Tax Cuts vs Government Spending

The question "with the economy needing a jump start which form of economic stimulus do you want to see more of and why?" still remains.

The question "with the economy needing a jump start which form of economic stimulus do you want to see more of and why?" still remains.
Tax cuts. Here in Tidewater Va. all the local cities are putting together projects they want paid for in the curent stimulas package the minute its passed. I looked at what the cities want to do and most are pork projects. Thats just 5 0r 6 cities and they have like billion dollars they will for from the federal goverment. Now take the entire US and all the cities and states fighting for this money and its going to add up to a bunch of waisted money.

I think you need a mixture of both, but I'd like to see it have a heavier slant to tax cuts.

On one hand, you can't go giving all the money to the taxpayers because consumer confidence is so low right now. That's a sure sign that many people would take that money and simply save it for a rainy day (ie job loss). If the money sits in people's savings accounts it will do little to create jobs.

But on the other hand, the government will not infuse the money in the most efficient manner. You have to ensure that lenders are solvent enough to confidently lend money - so I agree with bank bailouts. And you have to give a push to companies to incent them to pursue alternative energy sources - so I agree with building energy infrastructure. But bailing out Detroit? Bad idea in the long run; if GM is failing to compete with the Toyotas of the world, it's because of their own bad decisionmaking, and propping them up is only postponing their inevitable demise. The only reason to bail out Detroit? Millions of jobs depend on it, and if they go under, our unemployment goes up into double digits.

But governmental spending in the form of auto bailouts is the ultimate short-term, short-sighted fix. Taxpayers may indeed initially hoard a tax rebate as the consumer confidence index indicates, but over the next two years most low-income households will spend through that money, gradually infusing it back into the economy. They'll have little choice, because in the face of rising costs they'll need to tap that money. That infusion of cash will help jobs and earnings pick back up, the stock market will begin to improve, which will ultimately spur improvement in consumer confidence. Low, middle, and high income households will begin ramping up their spending in kind as their fears begin to fade, and the economy will be back on track and humming along by the middle of 2010.

unless alot of stiff rules and regulations follow those tax cuts, im against them. corporate greed is at an all time high. handing those C.E.O's more money, without a checks and balance system, turns into a big joke. just look at wall street, and all of the bonuses that followed the bailout

unless alot of stiff rules and regulations follow those tax cuts, im against them. corporate greed is at an all time high. handing those C.E.O's more money, without a checks and balance system, turns into a big joke. just look at wall street, and all of the bonuses that followed the bailout

The CEO bonuses and corporate greed are kind of an unrelated issue to tax cuts, but you still make a good point. You could direct the tax cuts/rebates to the bottom 95% of earners in the country. That would keep the money out of the hands of the very rich. It's the bottom 95% who would be most likely to spend it.

The very rich (the top 5%) would be most likely to hoard the money, doing very little to kickstart the economy.

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!

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.

Crowley only has superficial knowledge of economics and a host of other subjects (http://www.slate.com/id/1003470/). Her attempt at being serious and knowledgeable on The McLaughlin Group is truly sad. Perhaps Jack Germond (http://en.wikipedia.org/wiki/The_McLaughlin_Group#Criticism) 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.

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?

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.