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Why am I not stimulated?

I want to encourage you with good news about the federal stimulus package passed in the U.S. House yesterday. I want to, but I can’t!

My hopes had been that President Obama’s team would come up with a sound plan and Congress would act responsibly. However, in effect, the plan is nothing more than a jumbled mess of a few likely ineffective short-term stimulus ideas and massive long-term spending plans that won’t help our current economic problems now.

Apparently they just don’t get it in Washington, do they? These, and only these, should be the points of the stimulus package: (1) immediate jobs creation through major tax breaks and financial incentives for businesses, and (2) major spending only that directly and immediately stimulates the economy, not years down the road. I mean, spending for basic research, or special education programs, or home weatherization, or new grass on Capitol Mall may be worthy but they have little to do with stimulus and the only people hoodwinked into thinking they do are the politicians who stuff this into such a critical bill!

Why, even the Congressional Budget Office (CBO) has said, for example, that less than 50 percent of the money for infrastructure would be spent by October, 2010. So much for immediate stimulation.

 Now, in the “news-I-like” department, the CBO “Budget and Economic Outlook Report for 2009-2019” predicts an end to the current recession in the third quarter of 2009, albeit the recovery will be slower than normal due tight credit, continued stresses on housing and a reduction in household spending due to the large declines in wealth experienced in 2008.

However, the CBO forecasts much of that negative might be offset with an $800 billion stimulus package, increases in discretionary income from lower gasoline prices and lower mortgage payments as people refinance during 2009.

Of course, there is a price for all this. The CBO projects a $1.186 trillion deficit for 2009. That number is so big — equal to about 8.3 percent of U.S. GDP — that it’s hard for someone like me to fathom. It certainly makes last year’s $455 billion deficit look like a lawn party. But here’s a scary thought . . . the CBO estimate does not include any stimulus package. So, when the $825 Billion package passes, the ultimate budget deficit for ’09 will blow past $2 trillion! The stimulus better work this time!

Is such enormous red ink a problem that will soon go away? Sorry, says the CBO Report. It projects red ink as far as the eye can see. But, there are two scenarios that could bail us out of this black hole of debt:

First, the Obama administration AND Congress could really clamp down on spending from now on to halt the tide of red ink. Or, second, the stimulus plan could be so well crafted that it would offset all the credit, real estate, and economic problems, and result in windfall tax receipts in the future.

 Looking at the two scenarios above, I think we’d have a better chance of selling cell phones to scuba divers!

Comments

26 comments on “Why am I not stimulated?

  1. Doug Reimel

    Has anybody in Washington ever understood it! The problem is, everyone in Washington eats from the elitest entitlment buffet. I for one an trying to get involved. Politics always has money. And it is recession proof. After all It sure looks like I will have time on my handswhile our leaders squander away oportunity on programs for everyone except the tax payer. The tax payer is the one who funds goverment not welfare recepients.

  2. Arch

    NORM, now you are seeing a little more clearly. What happened to your 2 TRILLION REASONS TO BE OPTIMISTIC that you wrote a week or two ago?
    Cell phones to scuba divers……that is funny. I’m going to steal that one.

  3. Bentley Collins

    Norm I see your proposal as creating short term possibilties for US companies but the fact still remains that US infrastructure needs attention. We cannot continue to ignore the 800 pound gorilla. The only way to restore our status as the leading industrialized country in the worlk is to invest in infrastructure, education and technology. Sorry if you don’t have the time to wait for it but f we don’t do it we’ll soon be in even worse shapoe than we are today

    Tax cuts don’t work for poeple who don’t have jobs

  4. David

    The American Reinvestment and Recovery Bill is a sham of the worst kind. The Obama Administration along with the ilk of Pelosi and Reid have fashioned funding initiatives for a liberal wish list and have the audacity to try and convince the American public that it will be good for them. Is this what Obama means when he speaks of “The Audacity of Hope”? The plan is reflective of what Carter tried to do in the 70s but the plan was so un-balanced that it lead to hyper inflation and large interest rates. The house version of the Obama Plan will do no less. Lets hope the Senate version balances a mix of tax rate decreases, tax incentives for business to make capital investments, direct infrastructure spending which can include a myriad of projects (military and civilian) that will produce a tangible return on investment. A balance such as this will put people back to work. I encourage all readers to contact their elected delegation and voice their concerns. Otherwise, we will all be sheep and hearded toward the cliff.

  5. Ted Wade

    First Lie: I am from the government and I am here to help you.
    Other lies: See 1st lie.

    Is this a form of Ponzi (Sp) operation against our children and grandchildren?

  6. John Post

    Wel put Norm. To bad most of the rest of the press will never write abou that.

    Bentley, Tax Cuts do put people back to work though.

  7. David Roberts

    The bill for the last 8 years has come due. It’s too bad that some people think they are entitled to a country that defends them and provides them with unlimited opportunity, but then don’t want to pay for it. Or want to pay for everything with someone else’s money, except it turns out that “someone else’s money” didn’t really exist, it was just so much paper. So we have at least another couple of trillion in bank writedowns to go, and no one knows where the bottom is yet. Then there’s that 40 trillion in credit default swaps out there, no one knows where, but they’re worthless.

    So yes, this stimulus package is much, much too small. Not a single Republican will vote for it anyway, so Obama might as well get going on the next phase. Time to start repairing the damage, the incredible neglect of our infrastructure, and the destruction of our regulatory agencies and justice system.

    The deficit comes from spending more than the government receives in taxes. Taxes come from employment. Time to rebuild our industries, rebuild our employment base, and get back to work. An end to 40% of our corporate profits coming from the financial sector, like it did last year, profits to the people who produced and directed the current disaster, and still have the money to buy their own jet airplanes.

  8. zyxw

    Business tax cuts have always been an extremely ineffective way to create jobs. Tax cuts for individuals, particularly those who are poor or unemployed and will spend the money immediately, are better. The point of a stimulus package is to spend money, which generates income for businesses, income for workers, and eventually more jobs. The most effective spending is on infrastructure. We can argue over what the government should spend money on, but all economists agree that a lot of money has to be spent and fast. Putting new grass on the mall is stimulus if you’re in the grass-planting business. You might have to go out and hire extra workers, buy more grass, buy more tools, buy a new truck, etc. Some of those grass-planting workers might decide to go buy a boat now that they have more money in their pockets.

  9. Jon

    Well here we are on the 29th and more facts are coming to light about this Porkulus package put together by the dems. I am all in favor of rebuilding infrastructure, especially when it comes to waterways, docks etc., but as it appears 5% of this package has been appointed to infrastructure, and the majority of it is so laden with pork, it makes one sick. Bentley, I must disagree with you. Letting the free market work it’s way out on it’s own and letting tax cuts stimulate the economy will help build this country up again much quicker than throwing money at infrastructure. Besides, we don’t have the money and borrowing more and printing more is just going to create sky high inflation. I am not sure there are many people out there who can afford a $1 million dollar Sabre 38. Once private enterprise gets rolling again the other pieces will fall in to place. Private enterprise does more in technology research and promoting education than the government does. Tax cuts also work for those who don’t have jobs. Look at what the past tax cuts did. We had some of the lowest unemployment ever thanks to the Bush tax cuts. The 800lb gorilla on our backs is the absolute corruption that is going on in DC and in the financial markets and the media that ignores it. We would not be having this conversation right now if it weren’t for corruption.

  10. Capt Skip

    To Bentley This ,in theory, is to stimulate people to start buying things!!
    Some of those things will need to be financed which means barrowing.

    You want stimulus here is the simple most cost effective action that can start next pay period.
    It will require no government over sight or ear marks. It’s so simple a ….. can understyand it & it provides immideate results.

    The federal Gov’t. stops collecting all income & related taxes including SS for 6 months.
    The Employers will also pay their portion to the employee.
    All working people get stimulated. (90+ percent of us)

    If the feds need money let them print as they are now & loan it to themselves…

    Infrastucture takes to long & has to bid out to the cronnies that supported the politians that got us into this situation….
    Bentley: there is no way you own any recreational business or work in any Recreational field.
    Large scale base industry manufacturing in this country left decades ago.. look at the bottom of your latte cup Made in China….
    Welcome back from the dark side Norm- we were all praying for you to return. can we still pray in this country oh yea but not to loud….

  11. Larry Keeter

    Norm, your good buddy Irwin Jacobs is thrilled no end about this president and his program. What does he know that the rest of us don’t?

  12. Jon

    Capt. Skip,
    I hate to break it to you, but Bentley runs Sabre Yachts in Maine. It’s not entirely his fault, I think he is from Canada.

  13. dave boso

    None of this will do any good if you guys don’t get it to your 3 Stooges; 2 Senators and a Rep. find out who they are and fax or write them. don’t call. I have my 3 on my quick dial fax. Remember they work for you.

  14. Bill Kearns

    We are paying now for eight years of total incompetency at the hands of George Bush. A trillion dollar war with no results, longer than WWII, killed more Americans than the trade center attrack.

    Two weeks in and everbody is hammering Obama – where have you been for the last eight years? Sitting by idly and watching boat shows dwindle to nothing? The NYBS down 50% in attendance this year. Year over year in the past eight probably 70% down. Forget “Grow Boating” – recapture the entry level market – 13K starter boat as Irwin Jacobs has introduced. It’s going to be a long ride where only the positive and strong will survive.

  15. Capt Skip

    Bill Kearns– It wasn’t the cost of a war that got us here. You may be a Bush hater but we have not been attached in this country since 911. All agree Al Qiuda is severly damaged and defeated around the globe. Those are results. The BO bailouts in less than 3 months will eclipse the cost of the entire Iraq & Afghani wars. Yes there is reason for concern Commrade.

  16. dave boso

    Ain’t freedom great we can say what we want right here without any fear of a reprisal.

    Well use it while you can Obama and the libs are in charge

  17. Capt Skip

    Dave Boso that’s not exactly true I have had post to this thread that did not pass the Moderators filters…& never apeared?????????

  18. Half Tide Rock

    Over the past 25 or more years there has been a Paradigm Shift in how economic decisions are made. Paradigm Shifts are caused by “Agents of Change” ever since the British in WWII started intentionally introducing propaganda political science has moved increasingly toward decision making models that separate themselves from decisions made on the basis of the disciplines of science and economics. There have become two corrects, politically correct and rigorously correct. When a decision is chosen which is politically correct and at the same time not supportable by knowledge in the relevant discipline, it is a fantasy world decision. Never the less there are real world consequences for fantasy world decisions.

    We are living the consequences of fantasy world decisions. It is an irresponsible diversion to attack the consequences of the decisions rather than work our way back to the actual causes…so we must learn our lesson and recognize the error in order to not repeat it.

    It is absolutely impossible to get a good long term result from government consumption. Governments consume and businesses produce. There is a huge economic negative multiplier when fundamental resources are squandered. We are going to get so kicked in the !$%%%%!! by this foolishness that down is going to look like up.

  19. AnonymousBob

    Capt. Skip:
    “W” was on the watch when we were attacked (not “attached”) on 9/11. He ignored government intelligence indicating an attack on American soil because it was part of his, Rove’s, Rummy’s, etc. grand plan to finish Daddy Bush’s “war”. Just thought you might want to rethink those Republican talking points.

    Now to the point of this thread:
    I’m seriously afraid these stimulus plans, bailout plans, recovery plans, or whatever we want to call them, are NOT going to help stimulate things. Consumers are not buying anything right now, even with all the promotional incentives that are flooding the airwaves. All the boat builders and engine manufacturers have some sort of retail promotion in place. But sales are still down (check out Brunswick’s Q4 results, Fountain being de-listed, and all the boat companies that are still shuttered) and I don’t see things changing for some time. I have not seen the marine industry struggling like this ever before and I really don’t know when things are going to improve. I know it sounds repetitive, but I am very interested to see how the people do at the Miami show. Best of luck to all.

  20. Arch

    BILL KEARNS, you might be write about the 13k boat, but you are ENTIRELY wrong about this being Bush’s fault. If you are against the war and don’t like Bush, no problem, but to blame this on the war, and then bring up the fatalities….wow. Very ignorant.

  21. Joe

    And don’t forget anonymous bob that W wouldn’t have had to worry about 911 at all had your hero slick Willy not been too busy golfing to give the order to take out Osama when he had the opportunity.

  22. AnonymousBob

    Joe:
    Isn’t it funny, though, that Bush 41 was friendly with Osama prior to Slick Willy getting in office. I also don’t remember saying that Mr. Clinton was my hero. I was merely saying that Capt. Skip fell hook, line, and sinker for the Republican talking point about W “keeping us safe” after 9/11. Also, why did W let members of the Bin Ladin family leave the USA moments and days after the attacks? It doesn’t matter who the Prez is, it’s the players in the background that really pull the strings. And none of them care about us as voters or boaters.

    So, do you think these stimulus plans are going to work? Your only post so far was to comment on my post.

  23. Capt Skip

    Hey! A Bob, I’m not a fish or a leming. Nor am I a died in the wool political party guy. I just stated the truth, That you could not deny so you try to besmurch the messenger instead, truely classless. All I ask from the government is to provide safety from those that desire to damage our way of life including the wall street terriorists, enviromental wacka doodles, etc. etc. These stimulus (pork barrel) items will not do it. They could however stimulate high inflation, and other very bad things.
    got to go now… just sold 10 boats to GTMO See Bob if you can’t beat the players in the background sell to them!!!!

  24. Jim Burroughs

    Now you’re talking Bob and we can agree they are all crooks, liars and thieves. Stimulus plans funded by the receivers—sure, that oughta work eh?

  25. LARRY RODRIGUEZ

    WE NEED TO BE AWARE OF SOME SIMPLE TRUTHS!
    THE AMOUNT OF PRESENT CORRUPTION, DUE TO THE GREED OF THE PAST, HAS SUBSTANTIALLY EXCEEDED ANY RESTRAINT WHICH EXISTED BEFORE NOW.
    THOSE IN GOVERNMENT DO NOT KNOW HOW TO FIX THE HIGHLY & EXTREMELY COMPLICATED PRESENT STATE OF FINANCIAL CHAOS.
    THOSE IN POWER AND MANY OTHERS IN OUR FREE MARKET ECONOMY HAVE GRADUALLY TOTALLY LOST RESPECT FOR THE HARD WORK OF EARNING A DOLLAR AT A TIME, THE FACT IS, TODAY EVERYONE TALKS ABOUT “BILLIONS” AS NOTHING MUCH MORE MEANINGFUL THAT GOING TO MCDONALDS!
    THOSE WE HAVE ELECTED TO REPRESENT US, ARE SO BUSY WITH THEIR OWN AGENDA, FAILURE TO SEE THE BIG PICTURE HAS RUN RAMPART, WORSE YET, PUSHED BY THE WAY SIDE, AS FAR AS THEY ARE CONCERNED.
    YOUR HOME HAS BEEN TRADITIONALLY THOUGHT OF AS BEING THE BEST INVESTMENT ANYONE COULD MAKE, AND THE MAJORITY OF PEOPLE KNEW THEY COULD ALWAYS COUNT ON HAVING A SUBSTANTIAL RETURN FROM IT, A SORT OF “SAVING ACCOUNT” IF YOU WILL.
    A REASON WHY WE UPGRADED, BOUGHT BIGGER OR NEWER HOMES, SEEKING THE COMFORT AND SECURITY IT BROUGHT AS A RESULT. IN FACT MANY BORROWED AGAINST IT, TO FURNISH EDUCATIONS TO THEIR CHILDREN, PAY OR CONSOLIDATE CREDIT DEBT, ETC., AND EVEN PURCHASE THAT “DREAM BOAT” AND/OR FISHING/DIVING/SKIING GEAR TO GO ALONG.
    MUCH OF OUR ECONOMY HAS EXPERIENCED GROWTH AS A RESULT OF HOMES RISING IN VALUE OVER THE PAST 50 YEARS, IN FACT THE HOME PROVIDED A SUBSTANTIAL JOB MARKET, WHICH IN TURN PROVIDED DISPOSABLE INCOME TO MAKE AMERICANS AFFORD MANY OTHER THINGS, AND SO ON, AND SO FORTH.
    EVERYONE SEEMS TO HAVE MISSED, OR CONTINUES TO IGNORE THE REASON WE ARE IN THE MESS WE ARE, WHY? IS BEYOND ME!
    THIS ENTIRE PROBLEM WAS A RESULT OF GROWTH IN FORECLOSURES, WHICH CAUSED SUBSTANTIAL HOME VALUES DEPRECIATION. ALL THIS DUE TO “QUICK LOANS” WITH VARIABLE OR CONFUSING INTEREST RATES AND TERMS, COUPLED WITH OVERBUILDING OF HOMES, & COMMERCIAL REAL ESTATE BY DEVELOPERS WITH EASY MONEY, & LOW RATES FROM BANKS.
    THE BANKS GOT GREEDY & COMFY GIVING AWAY SOMEONE ELSE’S MONEY (after all they quickly sold their mortgages to each other making a quick buck all around, and slowly creating a bubble!)
    ONCE THE HOUSING MARKET GOT WACKED, THE ENTIRE REST OF THE ECONOMY STARTED IT’S DOWNWARD SPIRALING ABYSMAL ROUTE, WHICH UNTIL SOMEONE ADDRESSES IT, WE’LL CONTINUE TO SINK DEEPER.
    BEAR IN MIND THE UNLIMITED AMOUNT OF INDUSTRIES WHICH REVOLVE AROUND THE HOME, & RELY ON THE HOME OWNER (and sometime renters-landlords) FOR REVENUE & JOBS;
    STEEL, REFRIGERATION & HEATING, CEMENT, ASPHALT, CONSTRUCTION, GLASS, FLOORING, STONE & BRICK, WINDOWS & DOORS (plus those in window treatments), PLUMBING, ELECTRICAL, ROOFING, REAL ESTATE, PEST CONTROL, APPLIANCES, LIGHTING, LEISURE, GARDEN & NURSERIES, FURNITURE, HOME CENTERS & RETAIL, PAINT & FINISHES, TRUCKING/TRANSPORT, (delivery of all these goods) & MECHANICS-DEALERS-BODY SHOPS-REPAIR SHOPS, ELECTRONICS, DECORATING, ALARMS, COMPUTING & TELECOMMUNICATIONS, ENTERTAINMENT, UPHOLSTERY, CITIES-COUNTIES & STATES (from licensing & taxes), (and yes-EVEN BOATING……… AND THE LIST GOES ON AND ON.
    THERE’S NO DOUBT, WHEN PEOPLE ARE IN FEAR, BOATING, OR BUYING A BOAT IS NO LONGER A PRIME OBJECTIVE!
    YOU COULD BLAME THE BANKS, AND ITS PROBABLY SO, YOU CAN BLAME THOSE IN GOVERNMENT, AND THEY HAVE MUCH TO BLAME, OR THE MEDIA FOR PLACING INFOMERCIALS ABOUT GET-RICH SCHEME THROUGH BUYING HOMES WITH NO MONEY, FLIPPING, ETC.,=
    BOTTOM LINE THOUGH IS; TILL THE HOME BECOMES ONCE AGAIN THE “HIDDEN SAVING ACCOUNT” MOST FOLKS HAVE ALWAYS COUNTED ON, AND PEOPLE AGAIN FEEL COMFORTABLE SPENDING MONEY TO FIX , UPGRADE, AND TRADE OR BUY NEW ONES, WE CAN TRY ANY STIMULUS WE WANT AND ACCOMPLISH PEEING ON OUR LEGS…….
    “And after the celebration party, now that the mice realized the CAT was the problem and the solution was placing a BELL around the CAT’s neck, so they can hear it coming…….the question was which mice was going to give up, or risk his/her life in performing the task at hand!

    WELL, AT LEAST I’VE MADE AN EFFORT TO KEEP MY SENSE OF HUMOR, SINCE PRETTY MUCH EVERYTHING ELSE IS UP FOR GRABS!

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