My idea for a second stimulus package

[louis c]

First part. The federal government spends 140 billion dollars by sending money to struggling states to balance their budgets. This saves jobs and services and prevents tax increases that reduce buying power of the middle class. It also could be used to extend unemployment benefits until the lagging jobs market come back.

Second part. 360 billion dollars in one time national debit cards to individual taxpayers (120 million people, including SS recipients). These cards will be for 200 dollars each and can only be used to physically buy products or services in person. No over the phone or online purchases. You have to go to a store, a restaurant or any other outlet that can see an ID. It would work the same way as a gift card. The card would expire after 90 days, so the purchase has to be made during the fiscal quarter. This would put money directly into the economy and save and create service jobs, reduce inventory and spur manufacturing.

These two actions would revive a sagging economy until the slower moving, infrastructure stimulus takes effect.

[lindisfarne]

1. The 2nd part you propose is already essentially happening with lower fedwithholding rates from your

paycheck. Could up the reduction in tax, though.

[jclincali]

2. I like the first part. Don't know about the $200 debit cards though.

Or, using your math wouldn't that really be $300 each? Anyway, that seems more gimmicky than a real solution.

[louis c]

8. Reduced taxes is not spurring spending

although it is laudable to save and reduce your personal debt, we need people to buy things. Right now, Americans are so afraid of losing their jobs they are not spending any extra cash to spur this economy. The cards would Physically force the recipient to spend, thereby creating the jobs necessary to reduce unemployment. theoretically, those new job holders will reduce the unemployment rolls and spend, so that the economic cycle can stop its downward trend and move in the upward direction.

[lindisfarne]

18. 9/11/2001: Bush tells everyone to go out and buy. Sorry, consumerism is bad for the environment &

economy. Wasting money is never smart. Compared to most of the rest of the world, we already currently are wasting exorbitant sums of money on unnecessary things (and we've cut back from a few years ago).

It benefits corporations and only corporations (who pay a pittance and who keep driving down wages). People could buy and trade services (and even goods) directly, on a local scale. That's what benefits people.

[dkf]

25. Wouldn't it be nice if everyone bought energystar appliances though?

And got rid of gas guzzlers, installed solar panels and solar water heaters?

[lindisfarne]

31. Only when the ones they have die (old refrigerators are probably the one exception).

Manufacturing & shipping appliances (to & from a home) uses a great deal of energy too - in most cases, probably more than the non-EnergyStar appliance uses. So I've never been a fan of getting rid of most older, functional appliances.

An older refrigerator or freezer may be the one exception to this.

Selling a less fuel efficient car doesn't help unless you have it junked (and in that case, its parts will be used to keep other cars running). I had a friend who was very concerned about peak oil and who did the math, and said it was overall, more environmentally friendly to just keep driving an older, less fuel efficient car. (The new vehicles, with a few exceptions, only get mediocre gas mileage - relatively few average >30 mpg overall).

[abumbyanyothername]

Might be a temporary stopgap but really . . .

the price economy is broken.

Since we are able to produce more with less work, we need to figure out some other way to spur consumption besides giving people consumption credits in exchange for work. Otherwise stated, a recession is just the media's way of saying that we have produced too much and we don't have anymore need to produce until some of it is consumed.

Now if we were to give out the cards on a quarterly (or more frequent) basis . . . .

Which is strangely similar to the ideas of this group. These guys may be a little strange but they are right on target when they say that price economies of all sorts simply ignore the fact that as wealth concentrates, consumption concentrates and ultimately drops. They have some loonie ideas mixed in with a large number of good ones. But they are dead on when they say that technological advancement by creating abundance is destroying all the economic systems we currently know, which are based on scarcity.

Imagine if everyday the government issued "credits" (based on a pro rata distribution of all that had been produced the prior day) that expired at the end of the day (or the week, or whatever -- the key point being that they expire so they can't be saved). Also, you could not "own" anything other than small personal effects. You would "rent" (actually use the credits gifted to you to select) items, and return them to a central store when you were done using them so someone else could use them during your down time.

[Name removed]

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[Jennicut]

4. Well, that was helpful...33 posts and all.

[lindisfarne]

5. 3rd part: create jobs with another stimulus funds that deal with crumbling infrastructure: sewers in

many cities are collapsing; invest in communities the way the CCC & WPA did; repair bridges & roads; build quality, low-end housing with low interest mortgages. Expand Volunteers & Teach for America programs - helps the young college grads who can't find jobs, and helps our youngest & oldest citizens.

[louis c]

9. That's in the first stimulus package

But the bidding process takes time, and we won't see that benefit for another year.

[lindisfarne]

17. I specifically addressed infrastructure.&added jobs.Most states said they had more than enough road

projects ready to go before the last stimulus package-they just needed funds. It didn't take more than a few months in MN to start spending the stimulus money - nowhere near a 1-year bidding process.

[dysfunctional press]

6. people would use the cards to buy groceries...

and apply the money saved to pay the electric bill. in other words- no real effect on the economy.

one problem is that $200 is too low a number to get people to buy enough to stimulate the economy.

[lindisfarne]

7. I've never understood that logic. How is it better to waste money than it is to pay off bills?Paying

the electric company benefits everyone by keeping rates lower (someone has to absorb the cost of unpaid accounts). To me, yours seems like a corporate-centric view, rather than a view which evaluates what best benefits all of society (includes corporations, but also everyone else).

[louis c]

10. Buying children's clothing or dining out

is not wasting money. It's creating jobs.

Our saving's rate is over 7%, the highest in decades. The downside is that unemployment is also the highest in decades. People have to spend to create jobs.

[lindisfarne]

16. People have to pay off credit card bills that have 29% interest on them. I think that's better for

the economy.
I understand main stream economists don't agree, but I rarely agree with them. They're the reason for the mess we're in, they're the ones who argue against the value of a living wage (although a lot of research done in the last decade or so as states & cities increased minimum wage shows that increasing minimum wage because it gets money into the hands of a person most likely to spend it (on necessities, not unnecessary consumer goods), which stimulates the economy & generates more jobs), and so on.

[dysfunctional press]

28. "I understand main stream economists don't agree, but I rarely agree with them."

what kind of research have you done on the subject? do you have any books or literature on the topic that are available for people to read?

[dysfunctional press]

12. the idea of the 'stimulus' money is for people to buy goods and services...

thereby stimulating "demand", and possibly helping businesses lower inventories and/or have reasons not to lay people off and hopefully even hire on more.

[louis c]

13. Bingo

Thanks for understanding.

Sometimes I wonder if I'm making myself clear.

But I know you get it.

[lindisfarne]

15. I understand the idea. I just don't agree that the logic is correct. n/t

[dysfunctional press]

19. 'paying off bills' is generally money that has already been spent.

therefore there's no stimulative effect to the economy if people simply pay down their bills. in order to stimulate the economy NEW purchases have to be made.

[lindisfarne]

21. I don't agree with that. It stimulates corporations, not the well-being of people, as I've explained

in other replies in this thread.

[dysfunctional press]

27. that's how our economy is structured.

by 'stimulating corporations', you hopefully stimulate job creation, which in our economy is what people's well-being is all about.

but- if you have a different theory, i'd love to read any books or research that you've accomplished on the subject.

[sutz12]

11. Send a list of 100 names of people that made less than 25k last year...

Send a list of 100 names of people that made less than 25k last year to every person with a net worth over 10 million dollars. Have them send checks of $10,000 to each one of them. Tell them they can deduct the money from their 2010 taxes.

They want to play the wealth redistribution card? Play it.

:)

[dysfunctional press]

14. how fair is that to the people who made $25,001...?

let alone the people with the net worths above $10million.

[madville]

20. taxpayer lottery

Anyone that had taxable income under say 50k gets entered in a lottery. Take one trillion and have a million prizes of a million dollars tax free. Half the idiots will blow it all in a year on new cars, boats, booze and gambling. The other half will buy houses and pay down some debt maybe.

[marketcrazy1]

22. I like that madville

but why not spread it around a little more, maybe 10 million prizes of 100 thousand each................ if i got a million bucks handed to me i would take my time spending it maybe ten years or so same thing goes for a hundred grand, i would still take my time but i would still end up spending it alot faster... probably a year or two. see the difference!!

[AdHocSolver]

23. Stimulus packages will do NO good so long as most of what we buy is imported.

When almost everything we buy is made in Asia, the money you spend leaves the U.S. (less the profit kept by importers) and is replaced with DEBT.

The stimulus package money is supporting jobs in China. Americans are going into greater debt to support the Chinese economy.

Get rid of NAFTA, the WTO, MFN status for China, the IMF, the World Bank and all the other corporate cartel agreements and bring JOBS back to America, and the economy will take care of itself.

Put Americans back to work who will pay income taxes and the government will have lots of money for education, infrastructure, health care, research and development, and more.

Cheesh! Economics is easy when you stop listening to the "experts" (who are full of it), and start using the "little gray cells."

[earth mom]

24. They need to give the people some REAL coin. 5K or 10K or more.

That will stimulate the economy big time.

I would have no problem spending the money locally.

They should even earmark the money for green energy spending-solar panels, hybrid cars, etc.

Sorry, but 200 bucks is chump change and just a drop in a bucket.

[armyowalgreens]

26. Sorry, but $200 isn't going to help anything.

Instead of attempting to give chump change back to the individual, which has been the chant of conservatives everywhere, we need programs that actually help individuals get a leg up. Which I guess is part of your 1st paragraph.

[Jakes Progress]

29. Number One: Jobs

Number Two: Jobs
Number Three: Jobs

Make 'em up. Fund 'em. Or tax incentive 'em.

We need roads repaired, train lines laid, services for the elderly.

We do not need more banking millionaires or wall street moguls. Everything in the country works better when you have jobs. Nothing will get better until there are enough jobs. Everything else is spitting in the wind.

[louis c]

30. There are jobs in the service economy, too

and the infrastructure jobs in the first stimulus package are at least 6 months away.

We need to spur spending now.