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President Barack Obama’s $819 billion stimulus package passed Congress Wednesday without a single Republican vote in its favor. The plan was heralded by the Obama administration as a breakthrough in policy, but it seems to have already fallen completely flat. The bill as it was originally intended was built toward infrastructure projects, energy investments, healthcare and welfare aid, and tax cuts.

However, after being coddled by “supply-side” Republicans much of the funding for infrastructure, energy and individual aid were dropped in favor of more tax cuts – tax cuts have failed for decades, but Congress wants to give it another shot. The bill went from being marginally acceptable to being almost utterly listless overnight. To make matters worse, after destroying the plan with their concession demands, the Republicans still stood as one block against it.

The United States needs serious infrastructure upgrades; from roads and rails to power grids and flood control, many systems are totally outdated. In 2005 New Orleans was devastated by a hurricane that destroyed its ancient levee systems. Somehow the Army Corps of Engineers was completely overlooked by the new stimulus plan even though it desperately needs funding to protect the city and its residents. In 2003 the United States narrowly avoided a national disaster when a blackout along the east coast nearly spread west to the Rocky Mountains. Over 10 million people lost power, yet the antiquated power grid has seen few upgrades. Every year the United States spends hundreds of billions of dollars acquiring foreign oil and we pollute our air, water and ground by burning millions of tons of coal in power plants around the country every day. Yet the new stimulus plan contains fewer provisions for “green” and “alternative” energy projects than were previously sold to the public.

Perhaps the worst offense of all is the lack of road and rail funding in the new project. President Obama promised the largest commitment to basic infrastructure in American history, but the new plan spends only five percent on vital projects that could revolutionize travel and guarantee the creation of thousands of permanent jobs.

We can take a look at other nations to see what they do with government appropriations during times of need. For example, central China had difficultly supplying power to its exploding population and the inhabitants lived in constant fear of the devastating annual flooding which had terrorized the region throughout its history. The Chinese government eventually stepped in with a massive project – the Three Gorges Dam – which directly provides electrical generation and flood control for the entire region. It also facilitates economic growth by increasing river-borne trade and it contributes funding to building projects throughout the area. There are major drawbacks to building a dam – particularly when the reservoir floods previously dry land – but it was proactive and the project will pay for itself within a few years time.

The U.S. doesn’t have to build a gigantic hydroelectric dam, but we need to do something appreciable. The new plan seems to be nothing more than a waste of $800 billion. The plan has roughly $119 billion in funding which has yet to be appropriated, but it is unlikely – given recent history – that the funding will go toward necessary infrastructure plans. Having given itself a blank check, the government could have gone down any route it chose in new and provocative ways. Any effort, even a failed effort, would have symbolized that our government is not going to approach this problem lying down. There is no limit to what could have been achieved with $800 billion. We could have perfected a super powerful fusion reactor to lead a new generation of energy technologies. We could have pumped funding into schools which ignore science and math, creating a wave of researchers for future projects. Our options were limitless.

If you are going to spend yourself into oblivion anyway why not try for the homerun? The American people needed a revolution, what Congress has given them is more of the same. We are all the worse for it.

http://www.opednews.com/articles/Roads-Rai...090202-784.html

Man is made by his belief. As he believes, so he is.

Filed: AOS (apr) Country: Philippines
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In 2005 New Orleans was devastated by a hurricane that destroyed its ancient levee systems. Somehow the Army Corps of Engineers was completely overlooked by the new stimulus plan even though it desperately needs funding to protect the city and its residents.

Obama hates black people.

David & Lalai

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Filed: Country: Philippines
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The condition of the money spent for the stimulus was that it had to happen as quickly as possible and not on anything that would take longer than 2 years to implement....hence, the word, 'stimulus'. It's not a fix all, but a jump start.

Filed: Country: Philippines
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Is this symptomatic of a problem with the way the government works, or just further proof that all politicians don't give a fnuck?

The Stimulus Plan's primary purpose is to inject money into the economy to get it kicked started again through ready to go projects and tax cuts. This was an op/ed piece so take it with a grain of salt. It's better to read what many of the leading economists like Paul Krugman are saying.

Filed: Country: Philippines
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It's better to read what many of the leading economists like Paul Krugman are saying.

You don't get to pick your economists, Steven.

Stimulus plan stimulating enough? Economists differ on its impact

Which economist? Gary Burtless or the guy from the Heritage Foundation?

I think the dissenting views have to be looked at in context. For example, no economist from the Heritage Foundation is going to say that any stimulus package beyond tax cuts are going to help. Granted, every economist has their own political bias, but it's up to us readers to discern actual constructive criticism over the plan vs. ideological arguments against it.

Filed: Country: Philippines
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Depression Economics: Four Options

By Bradford DeLong

When an economy falls into a depression, governments can try four things to return employment to its normal level and production to its 'potential' level. Call them fiscal policy, credit policy, monetary policy and inflation.

Inflation is the most straightforward to explain: The government prints lots of banknotes and spends them. The extra cash in the economy raises prices. As prices rise, people don't want to hold cash in their pockets or their bank accounts - its value is melting away every day - so they step up the pace at which they spend, trying to get their wealth out of depreciating cash and into real assets that are worth something. This spending pulls people out of unemployment and into jobs, and pushes capacity utilisation up to normal and production up to 'potential' levels.

But sane people would rather avoid inflation. It is a very dangerous expedient, one that undermines standards of value, renders economic calculation virtually impossible, and redistributes wealth at random. As John Maynard Keynes put it, 'there is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose...'

But governments will resort to inflation before they will allow another Great Depression. We just would very much rather not go there, if there is any alternative way to restore employment and production.

The standard way to fight incipient depressions is through monetary policy. When employment and output threaten to decline, the central bank buys up government bonds for immediate cash, thus shortening the duration of the safe assets that investors hold. With fewer safe, money-yielding assets in the financial market, the price of safe wealth rises. This makes it more worthwhile for businesses to invest in expanding their capacity, thus trading away cash they could distribute to their shareholders today for a better market position that will allow them to reward their shareholders in the future. This boost in future-oriented spending today pulls people out of unemployment and pushes up capacity utilisation.

The problem with monetary policy is that, in responding to today's crisis, the world's central banks have bought so many safe government bonds for so much cash that the price of safe wealth in the near future is absolutely flat - the nominal interest rate on government securities is zero. Monetary policy cannot make safe wealth in the future any more valuable. And this is too bad, for if we could prevent a depression with monetary policy alone, we would do so, as it is the policy tool for macroeconomic stabilisation that we know best and that carries the least risk of disruptive side effects.

The third tool is credit policy. We would like to boost spending immediately by getting businesses to invest not only in projects that trade safe cash now for safe profits in the future, but also in those that are risky or uncertain. But few businesses are currently able to raise money to do so.

Risky projects are at a steep discount today, because the private-sector financial market's risk tolerance has collapsed. No one is willing to buy assets and take on additional uncertainty, because everyone fears that somebody else knows more than they do - namely, that anyone would be a fool to buy. Although the world's central banks and finance ministries have been devising many ingenious and innovative policies to stimulate credit, so far they have not had much success.

This brings us to the fourth tool: fiscal policy. Have the government borrow and spend, thereby pulling people out of unemployment and pushing up capacity utilisation to normal levels. There are drawbacks: the subsequent dead-weight loss of financing all the extra government debt that has been incurred, and the fear that too rapid a run-up in debt may discourage private investors from building physical assets, which form the tax base for future governments that will have to amortise the extra debt.

But when you have only two tools left, neither of which is perfect for the job - credit policy and fiscal policy - the rational thing is to try both, at the same time. That is what the Obama administration in the United States and other governments are attempting to do right now.

Brad DeLong is professor of economics at the University of California at Berkeley.

http://www.realclearmarkets.com/articles/2009/02/depression_economics_four_opti.html

Edited by Mister Fancypants
Filed: Citizen (apr) Country: Brazil
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Posted
In 2005 New Orleans was devastated by a hurricane that destroyed its ancient levee systems. Somehow the Army Corps of Engineers was completely overlooked by the new stimulus plan even though it desperately needs funding to protect the city and its residents.

Obama hates black people.

:thumbs:

* ~ * Charles * ~ *
 

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USE THE REPORT BUTTON INSTEAD OF MESSAGING A MODERATOR!

 

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