Stimulus vs Bailout
Where are your tax dollars going, and how is the money being spent?
Well, it depends upon who you ask.
Go to Recovery.gov, and they focus on the economic impact:
The American Recovery and Reinvestment Act targets investments towards key areas that will save or create good jobs immediately, while also laying the groundwork for long-term economic growth. The charts and numbers below give you an idea of where the money is going.
Over the upcoming months, we will provide more information on the distribution of funding by Federal agencies. In order to give small businesses and Americans across the country a chance to apply for recovery dollars to create and save jobs, some funding may not be distributed until this summer.
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Go to right.org, and they focus on how much it is going to cost you:
Family earning $50k in salary
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Funny thing is, they both tell the same story — just different sides of it . . .
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February 24th, 2009 at 2:07 pm
Good thing for us we have corporate taxes as well as a progressive tax system, or Right.org wouldn’t be full of shit.
February 24th, 2009 at 2:12 pm
How to pay for it all?
(a) devalue the currency, (b) impose a “carbon tax”, (c) significantly reduce social security benefits, and (d) eliminate medicare benefits for all but a few.
February 24th, 2009 at 2:29 pm
Barry,
I hope that your inclusion of a clearly deceptive graphic from a website with private registration is just meant to be provocative. It identifies itself as a grassroots organization just like the many others run by big business or the rich.
I haven’t seen anything regarding regarding a substantial tax increase in the stimulus bill for people making $50k. That is, unless the Republicans get control again and cut taxes on the rich and impose them on the middle class as they are wont to do.
I suppose I could come up with a graphic showing substantial tax cuts for everyone making below $100k based on the assumption of confiscatory rates on the rich.
February 25th, 2009 at 2:14 pm
I feel like I’m missing something, but the bailout bill is $8.4 Trillion?
February 25th, 2009 at 2:21 pm
The stock market and the GOP are acting like a ‘dry drunk’
February 25th, 2009 at 2:24 pm
fraud guy…
I think Barry inserted an extra 0…. not like it matters… it’s only money… and it’s only matter of time until the US currency is the next balloon that pops.
February 25th, 2009 at 2:57 pm
I don’t think Barry inserted an extra 0. Like the rest of the doomsayer crowd, he opines that ‘at risk’ = ‘down a black hole with no prospects of any recovery’. That new school they’re building down the street. We’ll name that black hole elementary.
February 25th, 2009 at 3:00 pm
I heard from “”reliable” sources that there was some “stimulus” in this bill.
February 25th, 2009 at 3:26 pm
Why do they use the “total population” and not just the “total workforce” as the denominator? Since when are any taxes paid by those not working?
February 25th, 2009 at 3:43 pm
It looks like the right.org group came up with the number, so in addition to being over the base amount by about $60 billion, they then multiplied it by a factor of 10.
Fearmongering, indeed.
February 25th, 2009 at 3:45 pm
Where is the ‘bailing out egregious errors and free handouts to our buddies’ gobstopper in the picture above? That one seems to be missing. Or should it be a faded gobstopper in the back that takes a portion out of the all the other ones. I hope the US taxpayer doesn’t choke trying to get through those. Better not run with those things in your mouths kids. They’re liable to crack some teeth if you stumble and take an economic face plant and no amount of Heimlich is going to get those balls out of your windpipe
February 25th, 2009 at 3:48 pm
Why do they use the “total population” and not just the “total workforce” as the denominator? Since when are any taxes paid by those not working?
uhhhh….opportunity cost? ;)
February 25th, 2009 at 3:53 pm
OT: All’s well in banking. Why? Because Kenneth Lewis sez so. From Bloomberg:
“Bank of America Corp. Chief Executive Officer Kenneth Lewis said Merrill Lynch & Co. and Countrywide Financial Corp., the two acquisitions that some analysts say helped push down the bank’s share price, have been “stars” so far this year. ”
http://www.bloomberg.com/apps/news?pid=20601087&sid=actIPFvq9_uY&refer=home
Well jeepers. Glad to know it. Wanna give back some of the money now?
February 25th, 2009 at 3:55 pm
One thing is clear: The elctrial engineering departments of most universities will get an enrollment boost.
For those of you who love your hummers, you can get a bunch of loudspeakers fitted under the hood so the elcctric engine sounds like a fire breathing dragster. It’ll be a drag on your atomic batteries but you can’t have evreything. LOL
February 25th, 2009 at 4:03 pm
Thanks BR. These numbers show how really shameful the bailout has been.
February 25th, 2009 at 4:21 pm
This is totally disingenuous. Here’s why:
(1) Sober version:
For the 35k – 200k crowd, commonly thought of as middle class, the downside risks of a spike in crime, loss of good public schools, or loss of healthcare far outweigh the costs mentioned above. Even considering the fact that the costs are borne by multiple generations, a child born today would have a significant interest in growing up in a society whose basic fundamentals mentioned above are kept intact and would be willing to pay for it in future dollars.
(2) Angry version:
As a late Gen Xer-early Gen Yer earning towards the upper end of this income range, I am perfectly OK paying for the extra taxes to clean up the mess and am pissed off with the rhetoric around here. I was too young to partake in your stock market party in the 90s. I did not need to buy a house until 2006 after the greediest of the subprimers had already bought. I’m sick and tired of a bunch of Boomers who partied their way through the 60s and 70s and destroyed the fabric of society in the 80s and 90s with their selfishness to tell me what is worth saving and what isn’t. Talking about class warfare, here is an alternative generational warfare: Liberal boomer? We’ll cut your social security payments and make you suffer for your sins. Conservative Boomer? We’ll milk you in taxes and pave our roads with it and inflate the dollar until the rest of your savings are worth nothing.
February 25th, 2009 at 4:31 pm
Check this out: $4bil creates 4,000 jobs…you do the math. This stimulus is going to be the biggest boondoggle in U.S. History.
http://money.cnn.com/news/newsfeeds/articles/marketwire/0477340.htm
February 25th, 2009 at 4:32 pm
We all know that numbers are meant to support an argument. That 8.5T is mostly bogus, with majority of it, not actually walking out the door.
February 25th, 2009 at 4:34 pm
DMR
Can’t we have both? Sober and angry? There aren’t mutually exclusive, are they?
I like your scenarios but would like to know what the drunk, drunk and angry, and sh*tfaced and indifferent scenarios might look like. (just joking around)
There is a fundamental problem in our national discourse. We are unable to generate a mutually agreed upon description of reality. If one group asserts a description and defends it empirically, what is the point of talking to the other group which is waiting for Jesus to come riding in on his dinosaur to sweep the righteous off to Disney Heaven (that’s where Bobby Jindal and his band of junior exorcists went)?
February 25th, 2009 at 4:38 pm
off topic- didn’t Bernanke say that after the stress test were done then banks that needed deemed to need more capital would get a capital injection. However, I just read read that banks can now have IMMEDIATE access to more bailout funds. So . . . where’s the stress test??? This is the absolute worse thing to do on so many levels but my biggest complaint is that it rewards these banking fools for being complete failures. The USG, through the Treasury and Fed are going to guarantee that this country limps along for years to come- a la Japan. The economy will never recover. They simply cannot do what is required. When will they stop dicking around? AND- if these banking CEO’s were anyway honorable which they aren’t they would step down and admit they are failures.
February 25th, 2009 at 4:42 pm
The bailouts haven’t cost $8.5 T. There are $8.5T in commitments we’d have to pay if a meteor hit the earth and the entire world economy went absolutely belly up, but $8.5T has not been spent.
It’s sad that Barry posted this bit of right wing wacko misinformation.
February 25th, 2009 at 4:47 pm
All very entertaining but what does it accomplish other than getting bloggers hot under the collar. The sheer inanity of the whole exercise is highlighted by the fantasy involved in much of info contained in these things…as others have pointed out. BR: get rid of this tripe….you have a reputation to maintain.
February 25th, 2009 at 4:47 pm
Anybody watching the bond market today?
Did Hillary really manage to threaten the Chinese into buying?
If not; how are we going to finance all this Porkulus?
February 25th, 2009 at 4:49 pm
Maria Busharomo just had Carlos Gutierrez on to complain about Obama. Apparently Mr. Gutierrez is unaware that until a month ago he was the Secretary of Commerce of the United States of America.
Hey Carlos! Didn’t anybody tell you that were a cabinet official? If you knew the answer to the credit problem it would have made sense to tell President Bush — you know, the guy who was there for all four of your years, and the four years before that!
Perhaps most amazing is that it never occurred to Maria to ask such an obvious question. On the one hand it’s laughable, but on the other hand it’s astoundingly incompetent. Just another day in the alternate universe known as CNBC.
February 25th, 2009 at 4:55 pm
DC,
Don’t be so hard on Maria. When’s she due to deliver her baby? :X
February 25th, 2009 at 4:59 pm
One way to get some more tax dollars is to bring home all the assets hidden in offshore accounts, but in today’s WSJ, the opinion editors are actually against going after off shore cheats. It is against the law not to disclose any and all foreign bank accounts. Yet, they think it’s OK, (standing on its head their disregard for international treaties on torture (ironically written in Geneva) yet they defend international treaties that claim a distinction between tax evasion and tax fraud. There is no distinction when you must fill out those forms.
http://online.wsj.com/article/SB123552750424466041.html
February 25th, 2009 at 5:10 pm
DMR,
Don’t fight the Boomers. Until they’re dead, they’ll always have more votes than your generation. Unless, of course, you sweep open the borders. Barring that, once they die out, so do we, slowly. Demography is destiny.
And quit whining. If you are a gen x or y’er, you’ve really never known hardship. (I’m a tweener). Not that I or the the Boomers have either. The seventies/early eighties sucked, but nobody starved. But I expect we all might get a taste of real hardship before this is through. I know this, I shan’t be counting on social security or any other form of government largesse to fund my dotage. It ain’t gonna be there, and I don’t care how much the Beltway idiots try to claim otherwise. Hell, it might not even be there for the Boomers.
February 25th, 2009 at 5:12 pm
A rate of 5% is ludicrous. The long run short term real rate for government has been 0%. It is more likely to be negative than positive.
February 25th, 2009 at 5:30 pm
Those numbers seem like crap, it would be nice to see this kind of analysis done with real numbers, though.
David Brin’s “Earth” was set in a near future where secrecy had been mostly outlawed because how it had caused the collapse of financial markets and how it was mainly used to foster crime and fraud. They had to nuke Switzerland to make it happen… I think the Cayman’s might be a better target.
I do love the irony that I will be paying for my “tax relief” in the form of higher taxes for the rest of my life!
Oh, and wnsrfr – we pay the corperate taxes too; all of that money starts with us and the corporations charge us more for goods and services to pay for it.
Hey, on a related note of generating “taxpayer outrage” – calculate the extra cost every citibank customer pays each year to support the paychecks, perks and bonuses of their executives. I bet it is more than any middleclass taxpayer pays for any given government program through income (not payroll) tax.
February 25th, 2009 at 5:43 pm
VennData @ 4:59
You are correct that U.S. citizens are obligated to disclose all foreign holdings. But the Swiss government is not obligated to follow U.S. laws, except for those that it has agreed to follow.
If the Swiss can be bullied into providing names of U.S. citizens with bank accounts, the Swiss will lose all of that business. What’ll they have left? Chocolate?
All the banking business will migrate to places like Antigua, Panama, Isle of Mann, the Caymans, the Bahamas (even more than it already has). It’s a perpetual “cat and mouse” game.
February 25th, 2009 at 6:09 pm
My wife and I are outraged that Obama has not chosen to stimulate the economy by giving more money to the Pentagon. Unlike government agencies, the Pentagon is run like Wal Mart, with rigorous procurement standards and an impeccable logistic system. Every cent that goes to the Pentagon is spent wisely and has the added benefits of providing a multitude of jobs for our young people.
February 25th, 2009 at 6:19 pm
Where did the 8.4 Trillion value come from in the second graphic. That is pathetic fear-mongering!
February 25th, 2009 at 6:22 pm
fraud guy said: “I feel like I’m missing something, but the bailout bill is $8.4 Trillion?” Ans.: No, the “stimulus bill” isn’t, the total bailout is.
Hulkster said: “I don’t think Barry inserted an extra 0. Like the rest of the doomsayer crowd, he opines that ‘at risk’ = ‘down a black hole with no prospects of any recovery’.” Ans: True, but this is February 2009 and we have a long way to go. Stimulus II anyone? Coming. But fear not, our community organizer-in-chief had a church-basement planning-session in the White House a few days ago and no doubt came up with some great ideas for cutting the deficit in half, like he promised.
TrickStyle said: “We all know that numbers are meant to support an argument. That 8.5T is mostly bogus, with majority of it, not actually walking out the door.” Ans.: Says you. We don’t “all know” that.
franklin411 said: “The bailouts haven’t cost $8.5 T. There are $8.5T in commitments we’d have to pay if a meteor hit the earth and the entire world economy went absolutely belly up, but $8.5T has not been spent.” Ans.: I’m mightily reassured. Until your post I thought the Democrat’s actually intended to spend money. What a relief.
ottovbvs said: “All very entertaining but what does it accomplish other than getting bloggers hot under the collar. The sheer inanity of the whole exercise is highlighted by the fantasy involved in much of info contained in these things…as others have pointed out. BR: get rid of this tripe….you have a reputation to maintain.” Ans.: Absolutely right. Can’t have people find out what this bailout–just one month into the Obama administration– is going to cost them, so far. They might not like it. Gotta keep em distracted. Happy talk only: Isn’t Michelle beautiful? And, how cute are those kids? Look at Obama’s poll numbers.
I think the real issue begins with questions like these: How much can government ultimately borrow? Will people buy all the debt the government puts out? Who stops buying? Where do they put their money when they do? What happens after the government starts borrowing from itself, i.e. really just printing money?
Obama missed a chance to put together a responsible stimulus package. Instead he let Peloisi and friends produce a liberal pig-out. That’s what these charts show.
February 25th, 2009 at 6:47 pm
Dear DMR,
I will apologize. I thought rock n roll would prevail .. enlightening us. I myself got wrapped up in making a living .. building and remodeling factories and stuff like that, for our survival, pay’g into existing financial systems that my mom is surviving on. I missed a bigger picture tho.
For 25 years .. didnt push my own ideas .. or couldnt.
Stuff this big .. is trial and error. We are not talkg turning the Titanic away from an iceberg .. even tho thats a popular metaphor.
I’m sorry .. I failed. I/we missed a bigger picture. I’m doing the best I can now.
February 25th, 2009 at 6:50 pm
Richard,
Your post displays a level of ignorance that is simply shocking.
February 25th, 2009 at 6:58 pm
Curmudgeon, Demographics may be destiny, but therein lies the problem with the second chart Barry posted. For the money that has been saved in the past to be used, a willing counterparty is required in the future to produce something of utility.
Given the output gap that is in the trillions these days, the opportunity cost of going to work and doing something (anything) is essentially the cost of sitting at homr doing nothing (i.e. zero) Boomers are bullying the younger generations to accept high unemployment and deflation since it is in their best interest as consumers in retirement. From the perspective of the producers, the people who expect to work past 2020, including currently unborn future citizens, the cost of the lost productivity essentially falls on them. Using this unproductive labor to do anything is better than having them sit idle. Expenditures on many of the bubbles in the first chart (schools, roads, communications, health) directly help in building the infrastructure for the future. The second chart should use the 800bn and use a 0% interest rate to compute its future cost.
February 25th, 2009 at 7:03 pm
The conservatives are complaining about lack of stimulus for itmes that amounts to a total of less than 1 % of the total stimulus bill. That is like me complaining about the quality of the icecream my daughter got because there was a small scratch in the yellow color of one of the rainbow springles. Get real; this thing was put together by humans so it is not going to be perfect, complaining about the bill because of something that amounts to less than 1% is another pathetic politrick.
It’s pretty easy for those fat rich Repugs sitting in their big governors mansions with their big fat-cat salaries to turn down federal help for poor unemloyeed people. They are not the ones suffering the consequences for their political stunts and never will be unless the voters wake up and refuse to participate in these divide and conquer games that rich people use to suck money out of everybody.
February 25th, 2009 at 7:16 pm
Deficit spending does not have to be repaid. Misunderstanding the money creation and destruction process is what got us into this mess. So the numbers shown on that conservative propaganda website are completely wrong. We are going to spend until we cure this mess, either over 20 years or over 3. Hopefully, it will be over 3.
Net money is created by government deficit spending. Banks do not create net money, as every asset is offset by a liability. The money creation process that most people believe, eg. fed buys treasuries and injects money, is wrong. Simple accounting will show you this is the case. Start in a system with no money, and work from there using accounting. Soon, you will determine that the federal government must spend first, prior to borrowing or taxing.
I know, I know it is crazy, but 5 years from today, you all are going to be saying the same thing…
February 25th, 2009 at 7:18 pm
I find it interesting that the Republicans, who insisted on including tax cuts which they say is giving the American people back their own money, include the amount of the tax cut in the cost of the stimulus and the amount taxes are going to increase. Why didn’t they mention that the tax cut would increase my taxes when they proposed their stimulus bill?
They are also confusing accounting entries with actual cash.
February 25th, 2009 at 7:25 pm
Here’s a stimulus link with a lot of data:
=======================
How do you use Stimulus Watch? Watch the video tour!
StimulusWatch.org was built to help the new administration keep its pledge to invest stimulus money smartly, and to hold public officials to account for the taxpayer money they spend. We do this by allowing you, citizens around the country with local knowledge about the proposed “shovel-ready” projects in your city, to find, discuss and rate those projects. These projects are not part of the stimulus bill. They are candidates for funding by federal grant programs once the bill passes. Learn more by reading the FAQs.
http://www.stimuluswatch.org/
February 25th, 2009 at 7:29 pm
DMR, my sentiments exactly.
As a 50 year-old at the end of the BB generation, I too believe that those who reached majority with respect to age during the mid 1960′s and spent the 60′s free fucking and preaching everyone love everyone matured in to becomming one of the most corrupt, greedy and spendthrift mother fuckers imaginable and who while at the levers of power in business and government over the last 25 years destroyed our once great country.
These people were given a great country by those who survived WWII, worked hard, denied themselves of things for the sake of their families and saved throughout the 5o’s all with little or no entitlements.
My belief is it is liberalism and the nobody is accountable for their actions mindset. We’ll we existed before liberalism pretty well and we will exist after it.
I hope your generation and the President who wears no clothes expedites an end to the It-wasn’t-my-fault-entitlement-nation.
We’ll know that day is comming when politicians, ball players, government employees, union honchos and people paid millions to read news off a teleprompter are paid real world salaries and we see and end of Socialism for the rich and Capitalism for the rest of us.
February 25th, 2009 at 10:05 pm
There needs to be some serious de-leveraging of many minds and the tired and warped perspectives that seep out of them.
So many “perspectives” out there, from CNBC’s quick-fix – where’s the bottom? there’s the bottom! – the government has to tell me exactly what it plans to do now at the expense of of the future so I can make a trade today nonsense to the GOP’s we must return to the policies that have got us here nonsense to the Dems’ it’s our turn, even if it comes at a really bad time, it’s our turn nonsense to the overall it’s their fault and their fault and I don’t want to bail them ou… what happened?! Where did society go while I was complaining? nonsense are useless and will make the impact much more severe.
The thing about Obama is he’s a smart dude. He knows what’s going on. If you read his inauguration speech he essentially said “I can’t actually say it but since last August I’ve been briefed on our financial situation daily and we’re completely f*ucked. So remember that Americans have endured bad times before and toughen up, ’cause your whole world is about to implode. I believe that Americans can get through this because I have to or else why would I be standing here in the cold after swearing on the Bible to work for you.”
Our neglected infrastructure borders on disgraceful so let him build and renew schools, fix roads and bridges, streamline healthcare :), and get some solar wind & fire up in this sucka. Maybe it will lead to a shiny, fancy-lookin’, competitive USA. Or if the ship sinks, at least it’ll be pretty for the fishies.
February 25th, 2009 at 11:39 pm
@wnsrfr: Bravo. A short sarcastic point nails it. How very sad that most don’t seem to get it.
@DMR: Hey. Lighten up a little.
You’re pulling down far more than most Boomers could have ever dreamed to be making. You’ve got far more than most Boomers ever dreamed of having. And you did not have to live with the draft and the Vietnam war. Most Boomers have paid their dues and then some.
And I really get tired of the railing against Social Security as an “entitlement”. A huge amount of money was paid in by individuals and employers. More than enough to cover the promised benefits. So let’s quit poisoning the water with that one. Unless you want to ask your Congressman where the money went: creating a situation you get to enjoy.
Finally, the most tragic element is simply the reality of the job market for young people. And that includes those that compete with off-shoring and China and India. That is a fairly recent development that is a very, very bad one. This has been bad for some time.
There’s a very simple test for the stimulus bill that Obama will not put in place. It would measure the velocity of the money it throws at the crisis, and the trickle. All of this money is going to wind up in the hands of a very few companies and government agencies. Have them file a very simple quarterly report listing their stimulus receipts and their payroll increases. Then we could put the lipstick on the Obama pig. Want my guess?
February 25th, 2009 at 11:47 pm
Wow. A lot of comments on this one, though a lot of them seem political. Who’s got their bloggers out running defense today?
February 26th, 2009 at 2:46 am
What the heck? This used to be a serious blog. Now you’ve got 2 sardonic comics, and you’re posting right.orgs chart calling $8T ‘bailout’ a cost that taxpayers will have to pay?
I’m not for bailouts, but let’s at least be honest. A guarantee is not a cost to taxpayer anymore than your parents co-signing on a loan is a cost to your parents. And when USG pays to borrow money to pay for assets they also acquire the ASSET, which means they acquire an income stream that will pay (most?) of it.
Of course the govenment (taxpayer) will take a loss, and of course that sucks. I hate it and write my congresspeople frequently to stop the madness.
But to pretend the bailout cost will be $8T is just stupid and dishonest.
Not a serious blog at all any more.
February 26th, 2009 at 6:09 am
The Iraq numbers look low and the baliout at 8.6T$ is really stretching it; this will get you a lot of comments, but not much agreement on accuracy.
February 26th, 2009 at 9:56 am
But to pretend the bailout cost will be $8T is just stupid and dishonest.
And when USG pays to borrow money to pay for assets …–marksf
or, differently, to pretend that the cost is capped could be, equally, misguided..
for instance, if the increased USG borrowing Demand pushes past the Markets’ willingness to Supply, we could, readily, experience a rate-reset that crashes any semblance of Balance in our Balance Sheet..
care to guess the ‘Cost’ of that?
February 26th, 2009 at 11:08 am
What’s the cost of the stimulus bill vs the total money handed out to banks? Simply throwing a total up there is vastly distorting the fact that the majority of the bailout money is Bush-related.