Thursday, January 31, 2008


Just a few comments of many below:

Economic stimulus package clears House, faces Senate hurdle: "The House approved a $146 billion economic stimulus package Tuesday afternoon by a wide, bipartisan margin, but the package had an uncertain future in the Senate. The vote was 385-35, with one representative voting present. The bill needed two-thirds of the voting members to pass. The bill calls for one-time tax rebates to go primarily to individuals making less than $75,000 and to married couples making less than $150,000. It would also provide temporary tax breaks that would let businesses deduct more of their investments in plants and equipment more quickly, and it contains two measures aimed at helping homeowners get or refinance mortgages"

Mainstream Media Gleefully Celebrate Nonexistent "Recession": "In a poorly-concealed effort to facilitate electoral change, irresponsible mainstream media voices cannot contain themselves in prematurely celebrating a non-existent recession. In the first two weeks of 2008 alone, the broadcast media referenced an economic recession some 54 times, according to the Business and Media Institute. There's only one problem: we are not in a recession, and it's far from certain that we will be anytime soon. In the third quarter of 2007, the most recent quarter for which Commerce Department GDP estimates are available, the American economy expanded at a remarkable 4.9% clip. Even more remarkably, this estimate constituted an upward revision from the Department's initial 3.9% estimate. More remarkable still, this 4.9% GDP expansion was the fastest pace in some four years. Indeed, the American economy hasn't even seen a decline in GDP since the third quarter of 2001. In other words, it is absurd to assert that we are somehow in a recession, given the fact that America has enjoyed six years of uninterrupted GDP growth. Beyond straightforward GDP numbers, however, other benchmark measures also reveal a fundamentally strong economy, contrary to the hysterical media chorus."

An Unstimulating Idea: "It's like taking a bucket of water from the deep end of a pool and dumping it into the shallow end. Funny thing -- the water in the shallow end doesn't get any deeper." That's how George Mason University economist Russell Roberts describes the logic -- rather, illogic -- of the economic "stimulus" proposals that everyone and his uncle are proposing. If we needed further demonstration of the folly that is the American political-economic system, there it is. The leaders of the interventionist state and the candidates who aspire to command it will continue to produce this inanity until people see it for the balderdash it is and resoundingly reject it. The problem is that most people don't see it for what it is. When told economic activity is slowing down, they demand that their "leaders" and candidates assure them there is a Plan to keep them safe. The politicians are more than happy to oblige. Details don't matter much."

What the Economy Really Needs: "The American economy is staggering under the weight of taxes, regulations, rising interest rates and lack of funds to borrow for growth. American entrepreneurs, the people who spy out the opportunities before others do, need capitalists, who can provide the funding, whether saved or borrowed. But they cannot implement their job-creating new projects. They cannot put their new products and services on the market. We need to get government off the backs of business, off everyone's backs. We need to get government out of the monetary system, out of the economy. We need separation of the economy and state just as much as separation of church and state. Ayn Rand, Atlas Shrugged - on the last page - was right in suggesting this constitutional amendment: "Congress shall make no law abridging the freedom of production and trade."

A Leftist comment on the "stimulus": "Barbara Ehrenreich memorably called the talk about the stimulus "clitoral economics." And that was before we got screwed. The stimulus deal just announced is being praised more for its existence than its content. Much lamented partisan bickering was overcome; bipartisan cooperation that got it done. With Wall Street bankers in panic, better something than nothing. So the parties came together and split the difference and created an agreement (which still has to survive the minefield called the U.S. Senate)."

A silver lining? ""We're so used to Democrats pushing tax hikes as the answer to all of America's problems that we were taken aback to find the following words buried in Pelosi's release on the stimulus deal: `Economists estimate that each dollar of broad tax cuts leads to $1.26 in economic growth.' Gee, that sort of sounds familiar. It's almost, though not quite, like what the much-reviled supply-side economists have been saying for, oh, 30 years or so. Pelosi, and other Democrats now suddenly touting tax cuts, may be on to something. We might demur on the notion that all tax cuts must be `broad' to be effective. Evidence really lies more strongly with giving tax cuts to those who would start new businesses or expand old ones. But it's refreshing to hear a Democrat admit the obvious-that tax cuts work. It's no secret that high tax rates act as a deadweight on the economy by creating absolute losses from which no one gains. Martin Feldstein, head of the National Bureau of Economic Research, estimates that a $1 tax hike costs the economy 76 cents in output. That explains why the economy jumps each time there's a tax cut."

Posted by John Ray

1 comment:

Always On Watch said...

I agree with Professor Roberts. The pool analogy is quite appropo, I think.

But I'm not holding my breath for the people to say "No!" to the stimulus. The people want something from Uncle Sam--never mind that the government has no money except what it extracts by force from the taxpayers' pockets.