A better way to kick start the USA
Discussion
On Bloomberg today, a commentator suggested a better way of spending the $1.2 Trillion Dollars, would be to give every taxpayer an income tax holiday for a year. He argued that this would really give spending a boost and be a much more efficient way of getting the economy moving again. The net effect would still be $1.2 Trillion of extra federal debt. I think this is a pretty compelling argument, am I wrong?
ianash said:
On Bloomberg today, a commentator suggested a better way of spending the $1.2 Trillion Dollars, would be to give every taxpayer an income tax holiday for a year. He argued that this would really give spending a boost and be a much more efficient way of getting the economy moving again. The net effect would still be $1.2 Trillion of extra federal debt. I think this is a pretty compelling argument, am I wrong?
Why are people going to spend when they have so much debt to pay down?BigJonMcQuimm said:
Yes probably wrong.
Why would anyone spend the extra if they think prices will come down?
Why would prices come down ?Why would anyone spend the extra if they think prices will come down?
Injections of wealth are usually inflationary.
It would need the States to be in on the act. Or a law to prevent the individual States to up their "takes" thus negating any positive effect.
Part of the current plan is to put an extra $50 in a persons paypacket per month. This will already be negated in my State by increased school spending which is part of my Real Estate Tax.
You are aware we have Democrats in Office
Firstly, not everybody is in debt. I seem to remember reading somewhere that it takes 7 savers to fund 1 mortgage. If those people who were heavily in debt paid down their borrowings,this would see an avalanche of money washing into the banking system.
The VAT cut in the UK was to little, particularly because stores were already discounting in 10's of %.
The VAT cut in the UK was to little, particularly because stores were already discounting in 10's of %.
NoelWatson said:
ianash said:
Firstly, not everybody is in debt.
But the average levels of debt are at a record IIRC, and we are talking about trying to get the average person to spend.BigJonMcQuimm said:
Yes probably wrong.
Why would anyone spend the extra if they think prices will come down?
BullsWhy would anyone spend the extra if they think prices will come down?
t. People want stuff, they don't stand about watching prices interminably, that is the whole basis of consumerism. The price reduction deflation theory applies to houses and damn all else. And even then, people are just waiting until a. they have enough money and b. prices look as if they might go back up. Then there will be a tsunami of housebuying. When people want a car, they want a car, they will do the best deal they can at the time. The only question is can they afford it. Governments have no idea how to spend money to stimulate an economy. They just give it to big corporations who use it to hide all their mistakes and excesses and shore up their finances. GI Joe is the one who needs the money, he will spend when he is confident he can, and until that happens we are in the shyte.cardigankid said:
BigJonMcQuimm said:
Yes probably wrong.
Why would anyone spend the extra if they think prices will come down?
BullsWhy would anyone spend the extra if they think prices will come down?
t. People want stuff, they don't stand about watching prices interminably, that is the whole basis of consumerism. The price reduction deflation theory applies to houses and damn all else. And even then, people are just waiting until a. they have enough money and b. prices look as if they might go back up. Then there will be a tsunami of housebuying. When people want a car, they want a car, they will do the best deal they can at the time. The only question is can they afford it. Governments have no idea how to spend money to stimulate an economy. They just give it to big corporations who use it to hide all their mistakes and excesses and shore up their finances. GI Joe is the one who needs the money, he will spend when he is confident he can, and until that happens we are in the shyte.Why would it be that Japan is suffering such a sharp GDP shock????
ETA : Consumerism is great so long as people can afford it.
Edited by BigJonMcQuimm on Tuesday 17th February 18:11
Do we actually disagree? All I'm saying is that this concept that deflation occurs because people will not spend money on products whose price appears to be dropping applies to houses and very little else. It is one of those nice but oversimplified ideas which lazy economists are so fond of. If the average man feels he can afford a car and he wants it he will buy it at the best price he can at the time. So the solution, which naturally politicians ignore, is to return his money to him, or even better not take it off him in the first place. Then he will judge how best to spend it. Giving it to multinational corporations to shore up their balance sheets achieves very little. It buys them a little time while they cut jobs which aren't required because people aren't buying things.
Germany and Japan are suffering because of a fall in demand. That isn't news. But stagnation in those economies occurs because of financial caution and a saving ethic which is long gone in the UK. They have got the money and they could spend it but they won't. That has always been the case in those countries, and it has nothing to do with falling prices. What they need to do is get out and buy more stuff preferably their own stuff. What we need to do is become more efficient, and that involves reducing the size of the public sector and taxes with it. Unfortunately we have a double whammy. If we do spend, we make so little that the money mostly goes abroad anyway.
Germany and Japan are suffering because of a fall in demand. That isn't news. But stagnation in those economies occurs because of financial caution and a saving ethic which is long gone in the UK. They have got the money and they could spend it but they won't. That has always been the case in those countries, and it has nothing to do with falling prices. What they need to do is get out and buy more stuff preferably their own stuff. What we need to do is become more efficient, and that involves reducing the size of the public sector and taxes with it. Unfortunately we have a double whammy. If we do spend, we make so little that the money mostly goes abroad anyway.
cardigankid said:
Do we actually disagree? All I'm saying is that this concept that deflation occurs because people will not spend money on products whose price appears to be dropping applies to houses and very little else. It is one of those nice but oversimplified ideas which lazy economists are so fond of. If the average man feels he can afford a car and he wants it he will buy it at the best price he can at the time. So the solution, which naturally politicians ignore, is to return his money to him, or even better not take it off him in the first place. Then he will judge how best to spend it. Giving it to multinational corporations to shore up their balance sheets achieves very little. It buys them a little time while they cut jobs which aren't required because people aren't buying things.
Germany and Japan are suffering because of a fall in demand. That isn't news. But stagnation in those economies occurs because of financial caution and a saving ethic which is long gone in the UK. They have got the money and they could spend it but they won't. That has always been the case in those countries, and it has nothing to do with falling prices. What they need to do is get out and buy more stuff preferably their own stuff. What we need to do is become more efficient, and that involves reducing the size of the public sector and taxes with it. Unfortunately we have a double whammy. If we do spend, we make so little that the money mostly goes abroad anyway.
Even the average man will hold off buying if he knows he can get the same goods cheaper in 3 months time.Germany and Japan are suffering because of a fall in demand. That isn't news. But stagnation in those economies occurs because of financial caution and a saving ethic which is long gone in the UK. They have got the money and they could spend it but they won't. That has always been the case in those countries, and it has nothing to do with falling prices. What they need to do is get out and buy more stuff preferably their own stuff. What we need to do is become more efficient, and that involves reducing the size of the public sector and taxes with it. Unfortunately we have a double whammy. If we do spend, we make so little that the money mostly goes abroad anyway.
Why then can you buy a bigger faster better equipped BMW 3-series for significantly less than you could for the equivalent product in 1998, and until this credit crunch hit, there haven't been queues of people standing outside BMW garages eating crisps and waiting for prices to fall again. On the contrary they have been selling like hotcakes. It's a modern myth, this.
Yes, if someone wants a car, and he is told authoritatively that if he waits three months he will get the self same thing cheaper, a fair percentage but not all, will wait the three months. But not six months or a year or two years.
All I am saying is, its OUR MONEY give us it back and we will spend it, sure as eggs.
Yes, if someone wants a car, and he is told authoritatively that if he waits three months he will get the self same thing cheaper, a fair percentage but not all, will wait the three months. But not six months or a year or two years.
All I am saying is, its OUR MONEY give us it back and we will spend it, sure as eggs.
cardigankid said:
All I am saying is, its OUR MONEY give us it back and we will spend it, sure as eggs.
They dont have to (give it back) - they're going to print some more apparently - you can have that.Sit and wait for the brown envelope to land on the mat.
Better buy your foreign currency before this happens as the pound will suffer.
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