American Recovery and Reinvestment Act of 2009: What Would You Do to the Bill?

[Cutlass]

You know, on second thought how about we not spend anymore danged money on this 'recovery'. Let the chips fall where they may and we'll scratch and claw our way back to prosperity over time.

We would have much farther to climb. When you want to go up, it's best not to start by running downwards.

 

[GoodGame]

Most of it is unavoidably necessary. Public infrastructure, especially bridges, is a well-known problem. Energy investing is needed as well.

Individual income tax cuts are just a good idea for stimulating the economy. Even better than free gifts, since they reward working.

I'd cut the Healthcare investments and try to merge some of the Welfare programes into Education under the title of "retraining". The Education funding beyond basic education has to be in line with projected economy growth though---seeding the future economy pragmatically.

If pragmatic, merge Welfare into the Infrastructure and Education spending as well.

Restarting the economy and directing it to long-term sustainable growth, preserving national transportation, and preparing for future energy supply shock are all needful things.

 

[Neomega]

Give it to the bankers, they no what is right for America.

 

[Atlas14]

More funding for science and research, Obama's Energy stimulus package is weak imo. I wish Obama would actually read up on the different fuel sources we currently use and the potential ones we should invest in, and specifically explain in detail to the nation why one fuel source is a better investment economically and environmentally.

 

[Sidhe]

Give it to the bankers, they no what is right for America.

Seeing as they caused the problem in the first place, I doubt it. They know what's right for the shareholders, and they messed even that up.

 

[pop daddy]

If pragmatic, merge Welfare into the Infrastructure and Education spending as well.

I'm not sure I see how this is possible. For one, education is so decrepit right now that I don't really see how it can be merged with anything, but I guess I don't see what you mean when you suggest merging Welfare with Infrastructure spending. I mean, any good conservative would agree that Welfare needs a hell of a lot of reform.

 

[Irish Caesar]

Make sure the gov't has the stones to run a surplus once the growth process starts up again.

 

[Integral]

This is the Obama stimulus package as it stands before congress. There should be no doubt in anyone's minds that something must be done to fix the US economy, but is this the way to go about reform? What changes would you implement if you could? Why?

The bill as it stands can be broken into three basic components. The first is spending that, for all intents and purposes, must be done; this includes aid to the states and expansion of medicare and unemployment benefits. The second is discretionary short-term stimulus projects like investment and the rebate checks. The third involves programs that, while not necessarily desireable for the short-run stimulus, are part of Obama's longer-term goals.

There should be a clear distinction between the first two components and the last component. We also need to distinguish between the needs of the moment (stimulate aggregate spending) and the needs of the near future (moving to a more savings-oriented economy that relies less on consumer spending). Balancing those two will be tricky, and I'm not delusional enough to think that I have the answers.

Nevertheless, here's what I'd do to the stimulus bill. The three keys: timely, temporary, and targeted. Provisions should be timely in that they should come on line as quickly as possible while minimizing waste. Provisions should be temporary and sunset after the recesssion is over; no new permanent increase in government spending. Finally, provisions should be targeted towards those who need the most and/or are the most harmed by the recession.

Tax rebates - Pros: they get out the door quickly. Cons: if done incorrectly, they will be mostly saved rather than spent. I don't see much role for tax cuts in the current climate except to boost confidence. Mostly they will just add to the debt. The other tax option floated about, permanent rate cuts, is not an effective way to deal with the temporary recession. For now, I'm axing the tax cuts altogether. If I were to include tax cuts, it would be better to temporarily rebate payroll taxes than to rebate income taxes.

Primary aid to the states - I'd be in favor of setting aside $90bn specifically to provide aid to ailing state governments. Such funds would stabilize the situation and help the states avoid cutting expenditures in key areas like medicare and unemployment benefits. However, the states would need to revert to balanced-budget status after this is over (say, by late 2010 to mid 2011).

Automatic stabilizers - another $60bn over two years could be used to shore up the nation's automatic stabilizers (minus medicare; that's provided in the state aid). This would go towards the EITC, TANF, food stamps, unemployment insurance, and things of that nature. This satisfies the criterion of being targeted; and I'll break my temporary criterion to advocate for a permanent boost to the EITC.

Education and retraining - for workers laid off from the recession, $50bn over two years to go towards providing loans and grants so that these workers can regain skills. Some of that could plausibly be siphoned off into other types of student loans as well. This provides direct relief to those hit hardest by the recession and will come on line quickly. A further $20bn would go towards funding basic research, NSF grants, and things of that nature.

Infrastructure - Peter Orszag, Obama's budget director, testified last year that the US could complete most of the repairs needed for its infrastructure network with an expenditure of about $80bn. So I'll use this time to make that appropriation, front load it, and spread the remainer out over two years. Most of those projects are shovel-ready and will come on line within a few months. They are timely and in some respects targeted; further, these projects will be subject to reasonable cost-benefit tests to avoid excessive waste.

Further aid to the states - Now for something a bit more controversial. Provide $150bn to the states, apportioned by working-age population. The state governers could then decide whether to take it as tax cuts or as further state aid/infrastructure funding/etc. This allows each state to tailor its aid package to its own specific needs.

Cost
- Primary aid to the states: $90 billion
- Automatic stabilizers: $60 billion over two years
- Education: $70 billion over two years
- Infrastructure: $80 billion over two years
- Secondary aid to the states: $150 billion

total: $300bn in direct expenditures; $150bn for the states to take as they see fit; total, $450 billion. As an aside, scrap all "buy American" provisions in the bill.


Everything else - the energy provisions, the health care technology provisions, and the long-term infrastructure spending, should be placed in a seperate proposal. Same goes for Obama's "Making Work Pay" tax credit. Some of those long-term investments are necessary, but they don't belong in a temporary stimulus package.

 

[innonimatu]

Good. This will give keynesians too a bad reputation, soon.

I'd use it for toilet paper. Also, I'd add a few extra lanes on all the highways around Minneapolis.

The way this is going you'll be using dollar notes and bonds as toilet paper - it'll be cheaper. Zimbabwe is gonna get some competition.

 

[MagisterCultuum]

I'd scrap the bill and start over. Actually, I don't think we should be doing anything specifically to stimulate the economy, only to address the underlying problems.

First, I'd completely abolish payroll taxes. I would not send out any rebates, except possibly the Fair Tax Prebates if I then decide to proceed to get rid of the current tax system completely.

I'd stop taxing money received from medicare, unemployment insurance, etc.


I'd establish a commission to consider how best to reform or replace the Federal Reserve System.

I would probably still pass bills providing for infrastructure project funding, as the nation does need that and since I'm a civil engineering student.



I would lead and effort to dramatically reform how credit reporting works. Canceling credit cards should not hurt one's credit, for example.

 

[Integral]

First, I'd completely abolish payroll taxes.

Temporarily or permanently? And if permanently, how do you propose we fund social security?

 

[Godwynn]

I would abolish all of it and start from scratch. Only spend the money on actual PROJECTS. TVA scale stuff. Oh, built that damned canal between Brownsville, TX and San Diego, CA.

Would it look something like this?

 

[Cutlass]

Temporarily or permanently? And if permanently, how do you propose we fund social security?

One Republican Senator mentioned suspending it for 2 years, but didn't use my idea of offsetting that by 2 years older retirement age. So while mine would be somewhat close to revenue neutral, his wouldn't.

 

[mrt144]

How do you know? For all you know doing nothing and letting them fall on each other like ravening dogs might be the best solution, no ones ever tried it AFAIK.

Consider all the businesses that have gone bust for want of a loan, and as soon as the banks with their self inflicted greed and stupidity mess up, we bail them out. It's just patently arse. Live by the sword die by it. You can't become socialist on a whim or whenever you feel like it. I'm with the libertarians on this, screw 'em.

I say screw em too, but the answer as to why they are doing it is factual. There is little motivation to lend no matter how cheap the money is if you're facing a balance sheet default of your own.

 

[bhsup]

Would it look something like this?

Yeah, probably, if they use union labor.

 

[Narz]

o $30 billion for highway construction
o $10 billion for transit and rail to reduce traffic congestion and gas consumption

Holy crap is that backwards.

o $19 billion for clean water, flood control, and environmental restoration investments

Also, that is not nearly enough but probably better than Bush's plan (did Bush even have a plan?).

Also, where's all this money coming from if there's to be so many tax cuts? From withdrawing troops from Iraq maybe? Perhaps we could reemploy our serviceman actually serving America (instead of just killing time in the desert).

 

[Bigfoot3814]

Also, where's all this money coming from if there's to be so many tax cuts?

I'd like to know this too.

From withdrawing troops from Iraq maybe? Perhaps we could reemploy our serviceman actually serving America (instead of just killing time in the desert).

Radio says the big BO's putting 10,000 more guys into Afghanistan.

 

[sonorakitch]

Building roads helps more than merely construction...

How is building a road going to get us out of this mess? Do you have any idea how long the planning and entitlement process is just for building one mile of roadway?

If we want to inject some steroids into this economy, building a road isn't going to do it. But at least Obama admits that too.

~Chris

 

[Merkinball]

It's not too hard to figure out why the banks aren't lending.

It's a little more hard to figure out how this is good for long term prosperity when we're spending it all on borrowed dollars.

How is this, or Social Security for that matter, any different than Maddofs ponzy scheme? In the end the money is gonna run out and we're not going to be able to pay our debt back.

It is nice to see all the people who bemoaned Bush for wrecking the budget surplus lauding Obama for adding an incredibly grotesque amount to the debt as his first major policy move.

The only thing worth spending in this bill electrical grid construction. That is something that absolutely must be done at this point. We're essentially operating and trying to maintain a third world grid. Maybe some modest transportation infrastructure, but screw the light rail. Light rail is a dismal failure everywhere it is tried in NY, sparing the absolute largest cities.

 

[Merkinball]

How is building a road going to get us out of this mess? Do you have any idea how long the planning and entitlement process is just for building one mile of roadway?

If we want to inject some steroids into this economy, building a road isn't going to do it. But at least Obama admits that too.

~Chris

No, he doesn't know any of that.

Nor is he taking into consideration that adding a road does not necessarily equal a better economy. Our poor planning over the past few decades in regards to road infrastructure is a good example of that. You don't just plop a road down, and wwuuuup! Traffic and economy got a little better!