Stimulate this
So, the powers that be spending your money have decided that the economy needs to be stimulated. Remember when you got the $300 check? You might get one again. Is it an election year? They’re gonna refund you some of your own walking around money. Don’t get me wrong, I want my money back. IIRC, last time you didn’t actually get it back. You got it, claimed it on your returns, and were taxed on it. Dunno if this is the same thing or not. If it is, this is just stupid.
Additionally, there will be tax breaks for businessess. Hey, they’re onto something now.
And the .gov backed lenders will have their cap on lending raised.
And they’re gonna extend the amount of time people can draw unemployment.
Whoopie! We are saved.
So, here’s the question: If the government can stimulate the economy and that is allegedly good for the economy, why don’t they do it every day?
Need a hint?
The government can’t control the economy. They’re a player in it, of course, but it’s beyond their control. Period. If they could control it, we’d never have depressions, recessions, inflation, stagnation and all those other -essions and -ations. The .gov also cannot control unemployment, other than to the extent that they hire people. Period.
The only controls over the economy they truly have are tax rates. And the impacts of those are debatable.
January 24th, 2008 at 12:36 pm
I once heard the government/economy relationship described thus:
The economy is a semi-wild horse. Government is a man with a rope around the neck of the horse. The man can pull on the rope, somewhat guiding the horse, but always choking it. Or it can release the tension on the rope, letting the horse breathe. But releasing tension on the rope doesn’t mean the horse is going to move, and certainly not in the direction you want.
Thus government has the power to restrain and even kill the economy, and that is the ONLY control it has.
January 24th, 2008 at 12:59 pm
My recollection of the rebate was that it wasn’t taxed as income. We had to declare it on our returns because there were undoubtedly some that didn’t get a check, but should have. Those folks got to reduce their tax/increase their refund by the appropriate amount.
IIRC.
January 24th, 2008 at 2:45 pm
From what I’ve seen, I’m means-tested out of the rebate, but at least I have peace of mind knowing my tax dollars will help send a $300 check to someone who pays no income taxes and in fact gets a rebate evey year via the EITC. So much for compassionate conservatism. Maybe if I promised I’d spend and not save the money……
January 24th, 2008 at 3:25 pm
What do you mean the government can’t control the economy? They controlled the hell out of it in the ’30s and Nixon did so well with the wage and price controls in the early ’70s. Their controls on the economy have a lot in common with controlling rioters. Blind it with pepper spray, throw it to the ground and hog tie it till the powers that be calm their fear of losing control.
January 24th, 2008 at 4:59 pm
They can’t control the economy but they can influence it. That doesn’t mean that I think anything that’s been suggested will actually work. Ironically, the best thing the government can do to spur the economy is to spend money, in particular on infrastructure (which desperately needs fixing anyway), but we’re so far in the deficit hole already that this simply isn’t an option.
January 24th, 2008 at 5:18 pm
Just crank up the Fed’s printing presses…so they can create money out of thin air…loan it to us and collect the interest…by their collection agency, the IRS. And what happens when you create money backed by NO goods and serivces? It devalues our currency so that the FRN’s (Federal Reserve Notes) you already got become worth less. Whatta scam!!
January 24th, 2008 at 5:53 pm
The best way for the government to stimulate the economy would be to lower the tax rates across the board and let people keep more of the money they earn. This rebate stuff is all crap designed to make some feel obliged and thankful to the .gov.
January 24th, 2008 at 6:12 pm
The income limits mean that the tax rebates are targeted at people who didn’t pay the tax to begin with.
January 24th, 2008 at 7:59 pm
The best way for the government to stimulate the economy would be to lower the tax rates across the board and let people keep more of the money they earn.
Bzzt, wrong answer. Such cuts result in a temporary spike, with the economy then quickly returning to what it was going to do anyway.
The income limits mean that the tax rebates are targeted at people who didn’t pay the tax to begin with.
Not totally true, although there is some merit to this. A large majority of the people who will receive the “rebates” are themselves taxpayers. Also, those with lower incomes will receive smaller rebates.
January 24th, 2008 at 8:48 pm
I think you’ve confused them with minimum wage.
January 24th, 2008 at 9:52 pm
Aaaaand if it ends up that way anyway, then returning taxpayer cash for the temporary bump is just the right thing to do.
That’s a fair chunk of (American made) ammo or frozen apple pies from the
Church bake sale!
January 24th, 2008 at 10:01 pm
RonPaul2008.com/prosperity has a true economic stimulus package.
The first commenter has a great analogy. Taxes only hinder what individuals make the choice to do; that’s the whole point of taxes – to make you give up your money when you’d rather keep it. How fucked is that concept? I have a bachelors and make million-dollar decisions monthly, but i’m not ‘smart’ enough to spend my money they way I see fit?
And of course the is the doom and gloom that the country would immediately fail without the omnipotent powers of our ‘leaders.’ I’m sorry, but only I know what is best for me.
Check out Paul’s new economic adviser too – smart man. When hillary wins because McRomney911 is tapped, the forum warriors will tell us that is was better than supporting such a constitutional radical.
He took at least 2nd place in Louisiana too..
Go freedom! Good post too Uncle. Economics can be very complicated – especially when the government propagandists obfuscate what’s really happening.
January 24th, 2008 at 11:14 pm
Most of this is smoke and mirrors. The situation now is as it has been, the only exception being this is an election years and the sudden emphasis on what all of us uneducated have known for a long time is to aid the self-anointed agents of change.
Remember past elections, this same thing has been floated out there in all of the last four or five. Sometimes not actually coming true until the agent of change took over (think Jimmy Carter).
January 24th, 2008 at 11:15 pm
God, a Ronulan liked my metaphor…
January 25th, 2008 at 3:49 am
Taxes inhibit economic growth – that is what they have always done, that is what they will always do. If you cut taxes, people will still somehow manage to spend the money that the government is “giving” back to them – people are like that. And when people spend money (or save it, or invest it, or whatever), the economy gets “stimulated”.
I know that is a remarkably dumbed-down view on the situation, and it is considerably more complicated than that, but historically, it works more often than not.
And, oddly enough, the few times the government has cut taxes in the past, within a few years, it was actually raking in more revenue than before the cuts… Funny how that happens.
January 25th, 2008 at 11:53 am
The only controls over the economy they truly have are tax rates.
That is such a load of crap. The government plays a major role in assuring our markets are free and has many tools at its disposal, from courts and law enforcement to licensing and certification to anti-trust to consumption and severance taxes to income taxes to fees to infrastructure development to flood control to schools.
January 25th, 2008 at 12:52 pm
persimmon, those tools don’t control the economy. they control certain actors in the economy. Their anti-trust rules have no impact on recession.
January 25th, 2008 at 1:52 pm
Aaaaand if it ends up that way anyway, then returning taxpayer cash for the temporary bump is just the right thing to do.
Unless, of course, you don’t match the tax cuts with spending cuts. A dollar spent is a dollar taxed, either now or later. By simply deferring the tax until later, you’re merely robbing Peter to pay Paul.
January 25th, 2008 at 1:54 pm
And, oddly enough, the few times the government has cut taxes in the past, within a few years, it was actually raking in more revenue than before the cuts… Funny how that happens.
Funny how the only way you get to that conclusion is by failing to correct for inflation. Once you correct for currency variations and the like, that “more revenue” actually turns out to be quite a bit less. Lies, damn lies, and statistics.
January 26th, 2008 at 1:36 am
This is what physicists must feel like when laymen try and talk about string theory…