A trillion in new spending...sound like a good idea to anyone?

[Kratos]

Obama Team Is Seeking Stimulus Bill by New Year
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By JACKIE CALMES
Published: December 18, 2008
WASHINGTON — President-elect Barack Obama’s advisers hope to finish an economic recovery blueprint by Dec. 25 so that Democratic Congressional staff members can draft legislation by the new year, as the two branches of government try to converge on a two-year plan by late January that could total just under $1 trillion.

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“The goal for completing action on this important legislation should be as close to Jan. 20 as possible,” said an e-mail message from Senate Majority Leader Harry Reid’s office to senior Senate Democratic staff members.

Some Obama advisers have sought to tamp down expectations that Mr. Obama could sign a package immediately after he is inaugurated. The opposition of some Senate Republicans and House and Senate negotiations on a final compromise could force delays into February.

Democrats familiar with the early deliberations say the preliminary price tag has grown to about $800 billion from the roughly $600 billion that House Speaker Nancy Pelosi had estimated in recent days.

Mark Zandi, a Republican economist who is advising the Democrats, said in an interview that the worsening economy could push his updated recommendation in January up to $1 trillion for a two-year government stimulus.

About a fifth of the Obama package could go toward health care, Democrats say. The biggest piece would be up to $100 billion to subsidize the states’ growing Medicaid caseloads of the poor. Mr. Obama also will call for a down payment on the $50 billion he proposed during his campaign to help medical providers buy information technology and save costs on health records.

Mr. Obama is considering roughly $200 billion in tax relief for low-wage and middle-class workers, including a payroll tax holiday to fatten paychecks and encourage Americans to spend more and spur economic activity, according to several people with knowledge of the options he is weighing.

The Obama plan has five main parts, according to Democrats in Congress and the Obama transition office. Besides the health care financing, it would propose billions of dollars for energy-saving programs, public works projects, school construction and renovation, and expanded jobless aid and food stamps for “the most vulnerable,” as well as tax cuts.

The scale and speed of the emerging package could exceed anything in recent memory, according to White House and Congressional veterans, in keeping with Mr. Obama’s admonition that the size of the stimulus must be proportionate to the economy’s ills.

The president-elect, in a four-hour meeting on Tuesday, made a number of decisions to guide his senior advisers while he is on a two-week vacation starting on Saturday; more than once he goaded them to think bigger and “bolder,” participants said.

The Obama plan could end up at about 15 pages, an adviser said, leaving precise legislative language and some details to Congress. The House and Senate will be working simultaneously to draft separate but similar measures.

Ms. Pelosi hopes to have the House finish in the second week of January. The Senate Finance Committee has scheduled votes to begin on Jan. 8; subsequent debate on the Senate floor could take more than a week.

The Senate leadership e-mail message on Thursday, which outlined the Obama team’s plans and set a Jan. 20 goal for completion, also sought to limit senators’ add-ons that could inflate the package and violate Mr. Obama’s vow against pork-barrel spending.

“Only those items that spend out quickly, create jobs and constitute sound national policy should be considered for inclusion in the package,” the message said.

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[MuscleScience]

How are we suppose to pay for this?

[T_Own]

the same way bush pays for the war? i don't get how people make such a big deal out of 1 trillion in domestic spending, when bush has been spending 10 billion a month in iraq for the last few years

[Kratos]

the same way bush pays for the war? i don't get how people make such a big deal out of 1 trillion in domestic spending, when bush has been spending 10 billion a month in iraq for the last few years

Well, the way I see the war in Iraq isn't exactly the opposite of domestic spending although I'm sure the price tag bothers most American's as it does me. The soldier's pay checks, money spent on the war machines, and the gvmt contractors are mostly going back to the US.

1 trillion is 1000 billion if I'm not confused. That's many months of 10 billion, so not exactly chump change. Not to mention the war isn't ending despite the campain promises. So, for those concerned about deficit spending it's a very big deal.

Domestic spending on things we don't need like for example upgrading gvmt buildings to stimulate the economy is no different than welfare. It bouy's wages and decreases unemployment as an economic loss, because it's payment for non economic production. It's news if you ask me. A huge increase in gvt spending both as a dollar amount and as a percentage of GDP. How big a % of the US population should be employed by the public sector?

[MuscleScience]

the same way bush pays for the war? i don't get how people make such a big deal out of 1 trillion in domestic spending, when bush has been spending 10 billion a month in iraq for the last few years

I think they thought that cheney and Halburton would get some pretty big oil royalties out of it.

[jimmyinkedup]

the same way bush pays for the war? i don't get how people make such a big deal out of 1 trillion in domestic spending, when bush has been spending 10 billion a month in iraq for the last few years

IMO the point is its not right now in iraq and it wont be right if this goes through ...the old adage - 2 wrongs dont make a right .....the easiest way out of a hole isnt usually to dig thorough to the other side!

[T_Own]

I think they thought that cheney and Halburton would get some pretty big oil royalties out of it.

well of course

kratos, yes 1000 bill = 1 tril, and for the last 6-7 years (72-84 months) we've been fighting the war. so very close numbers.

i agree the government should stimulate the economy by doing things OUTSIDE of themselves, but like musclescience said above, every break goes to a govt employee (or family of). even if it does just fluctuate the market into a false sense of well being, its better than it is now with billions being lost on seemingly nothing. the average american won't think twice about why their stock has gone back to the way it was, even if it means the US is sinking deeper in debt.

the point is, at least with that plan, money is being spent to improve the country. i'm not getting any richer by blowing billions over seas, i spent the entire summer paying the highest prices ever for gas! but if the same money stimulated the economy and my parents made back the 6-7 figures lost in the market, at least it will help them sleep well at night.

[Kratos]

well of course

kratos, yes 1000 bill = 1 tril, and for the last 6-7 years (72-84 months) we've been fighting the war. so very close numbers.

i agree the government should stimulate the economy by doing things OUTSIDE of themselves, but like musclescience said above, every break goes to a govt employee (or family of). even if it does just fluctuate the market into a false sense of well being, its better than it is now with billions being lost on seemingly nothing. the average american won't think twice about why their stock has gone back to the way it was, even if it means the US is sinking deeper in debt.

the point is, at least with that plan, money is being spent to improve the country. i'm not getting any richer by blowing billions over seas, i spent the entire summer paying the highest prices ever for gas! but if the same money stimulated the economy and my parents made back the 6-7 figures lost in the market, at least it will help them sleep well at night.

what do billions being spent over seas have to do with gas?
what's the difference between building a submarine we don't need or building a gvt building we didn't need economically speaking?
Who says the market will go up from this plan, and what good are stock market gains if a steak costs $100?

[run_n_fool]

I think the main points are that money needs to be spent to stimulate the economy. Sorry if this seems over simplified, but the slow down in the economy has a lot of trickle down effects.

If we build a gov't building, that project occurs in the US. These project put architects, civil engineers, carpenters, steel workers, equipment operators, even accountants, and finance people to work. It puts money in their pockets, and food on their tables. They spend their money on their mortgage, car payments, etc and the circle of life continues. Think of all the raw materials and services that are needed to build a building.

Same with health care spending. Joe Unemployed who can't afford medical insurance has to go on medicaid. If he has medical issues it is hard for him to find a new job and become "productive". Health care spending (in theory anyway) helps them get back on track. It also employs people in the health care industry so that prices for people with jobs do not continue to rise at a higher rate than inflation.

I'm not sure that this is the silver bullet we need but I think it is a step in the right direction.

[RA]

Tax cuts stimulate the economy not govt spending...if that were true it would awesome to live in Cuba.

[run_n_fool]

tax cuts do stimulate the economy but you can only cut so far and taxes are historically low. yes, they could be lower for the groups that need it most, but you still have to have spending to stimulate the economy. in this case, it is the gov't doing the spending.

[RA]

its fiscally irresponsible for the govt to spend more money right now...were just going to go further into debt. now i know there is manageable debt but were getting to the point of no return. if we keep going down this path we are going to be cuba/russia/ etc..get ready for bread lines.

[Kratos]

spending a trillion dollars we don't have pushes us closer to the day when forgein banks and investors refuse to lend us anymore money. On that day the economy shits the bed. It's already like $1300 a year for every tax payer just to cover the anual interest on the money we've already borrowed. It doesn't take a math genious to realize we're never going to pay anyone back.

Yeah spending does stimulate the economy except it's no different than welfare unless the value of production has a market. You left out kickbacks and bribes from contractors in your list of economic stimulus. Wasteful healthcare spending is an economic black hole just like gvmt waste.

This is not a step in the right direction and it's unsustainable.