Can the market alone fix the economy?

[DrClapeyron]

The US government must spend money. Large banks love to sell their mortgage-backed securities to Fannie and Freddie, same with other federal credit banks which essentially purchase loans that banks make (who says the government cannot change/control the money supply?). There was a serious case of overlending in US by the FED. If you trade a certain volume of debt notes (US Treasuries, mortgages, etc) too quickly the exchange rate of the debt note quickly becomes larger than the return rate of that debt notes.

Both sides are guilty of overlending, but were we not supposed to have the SEC to watch these sorts of things? *cough*Madoff*cough* But don't worry, the US can solve the problem by printing more money to cover the debt. Finance debt with more debt, brilliant! And what happens when the baby boomers retire? Our largest income earners (GDP) are going to retire within the next 15 years. Dare I say it...print money for entitlements?

 

[mheslep]

...Just be glad the Democrats are now running the show so
that we can do some nationbuilding at home.

Does this qualify for nation building at home:

Mr. Obama is preparing to increase the number of American troops in Afghanistan over the next two years, perhaps to more than 60,000 from about 34,000 now.

http://www.nytimes.com/2009/01/28/us/politics/28policy.html?ref=worldspecial

How about this in the House ARRA:

DIGITAL-TO-ANALOG CONVERTER BOX PROGRAM
Notwithstanding any other provision of law, and in
addition to amounts otherwise provided in any other Act,
for costs associated with the Digital-to-Analog Converter
Box Program, $650,000,000,...

http://www.rules.house.gov/111/LegText/111_hr1_text.pdf

 

[mheslep]

The Medicare prescription drug benefit signed in 2003 by President Bush has cost less than expected, but that is because it has triggered competition among drug companies.
...

Less than which estimate of the cost? All of them?

Bush first announced it would cost $400B (over 10 yrs)...

So, is there a newer estimate that is lower than the original $400 billion? Should we make David Walker eat his words?

LINKS:

Here's the wiki:
http://en.wikipedia.org/wiki/Medica...ement,_and_Modernization_Act#Changes_to_plans

More on the cost numbers and related issues:
http://www.washingtonpost.com/wp-dyn/articles/A9328-2005Feb8.html

And for some fun, how the GOP tried to bribe their way into passing the bill:
http://www.usatoday.com/news/washington/2003-12-04-dem-inquiry-bribe_x.htm

Prescription Drug Benefit is another entitlement disaster:

from table 1.:
http://www.cbo.gov/ftpdocs/56xx/doc5668/07-21-Medicare.pdf

 

[mheslep]

...So what is the best way to create jobs?

What is best way to stimulate the economy?...

Here's something that passes my filters on what won't work, for what that's worth:

...I would institute an immediate and permanent reduction in the payroll tax, financed by a gradual, permanent, and substantial increase in the gasoline tax. I would make the two tax changes equal in present value, so while the package results in a short-run budget deficit, there is no long-term budget impact. Call it the create-jobs, save-the-environment, reduce-traffic-congestion, budget-neutral tax shift...

and for the state governments, who are in danger of major layoffs:

I recognize that some state governments are now struggling in light of the macroeconomic crisis. For the next two years, I would let each state governor have the authority to divert a portion of the payroll tax cut in his or her state and take the funds instead as state aid. This provision would essentially be giving governors the temporary authority to impose a payroll tax on his or her citizens, collected via the federal tax system. Those governors who think they have valuable infrastructure projects ready to go would take the money. When designing a fiscal stimulus, there is no compelling reason for one size fits all. Let each governor make a choice and answer to his or her state voters. It is called federalism.

http://gregmankiw.blogspot.com/2009/02/my-preferred-fiscal-stimulus.html

Why not spending stimulus? Per J.M. Keynes late in life, well after the General Theory:

Organized public works, at home and abroad, may be the right cure for a chronic tendency to a deficiency of effective demand. But they are not capable of sufficiently rapid organisation (and above all cannot be reversed or undone at a later date), to be the most serviceable instrument for the prevention of the trade cycle.

http://thinkmarkets.wordpress.com/2009/01/25/keynes-as-public-works-skeptic/
M. Friedman said once that if Keynes had lived another year, he likely would have seriously curtailed the big government policies derivative of his work.

 

[Gokul43201]

Yes he did promise those, but this bill and the emergency path its taken are about the recession and immediate job creation, or so we are told in the bill's title. If the issue at hand is just education, infrastructure and clean energy it can go through the normal legislative process, otherwise its a fraud.

The issue at hand is not just education or infrastructure. The point I was making though, in response to Russ, was that some people involved in this bill had seen the need for certain measures before this emergency arose (as opposed to the assertion that everything in this bill is unnecessary since no-one involved in the drafting saw them as necessary before now).

And just because something falls under education or infrastructure, that doesn't disqualify it from this bill. There are a large number of infrastructure projects, for instance, with high stimulative potential in the fairly short term.

 

[WhoWee]

I'm not feeling the love for Obama here...

Remember the commercial..."it's MY MONEY and I want it NOW!"...(it's irritating I know- but relevant).

As he's stated a few times (and he's correct)...Obama won and this Bill is exactly what he promised...why question it now?

 

[WhoWee]

By the way...he also stated during the election that he wanted more troops in Afghanistan...remember?

 

[Astronuc]

As he's stated a few times (and he's correct)...Obama won and this Bill is exactly what he promised...why question it now?

I don't think he promised this Bill as explicitly written. He was promising action or some stimulus. The Bill came from congress and more specifically the democrats in congress. I don't see a viable alternative from the republicans.

Perhaps if the $1+ trillion spent so far was working, or rather Fannie Mae, Freddie Mac, AIG, and all the other financial institutions were functioning or driving the economy, a stimulus package such as the current Bill would not be necessary.

We've seen a lot of criticism about the Bill will not work, or what people think will not work, but I don't see much in the way of "what will work".

So for those who claim "what won't work", how about offering a viable alternative!

 

[WhoWee]

You're right, Pelosi stuffed everything she could into this Bill...and I doubt Obama expected all of the nonsense.

On the other hand, Obama is already talking about additional stimulus requirements beyond this one.

We need the "surgical strikes" he sold everyone on during the election...not giant spending packages with a few targeted programs.

 

[WhoWee]

The debate of tax cuts versus stimulus is tired at best...and (as Obama stated) of course stimulus means spending.

The real question is who to help and when...what are the priorities?

How is this Bill is going help the 1.5 million people who've lost their jobs in the past 3 months...and I don't mean COBRA, food stamps and unemployment benefits...all good in the short term, but not the long term solution.

On this point, Robert Reich made some comments last month that didn't exactly ease the concerns of many financial sector workers who've lost their jobs recently.

The question remains, how will this stimulus package get these people back to work at the jobs they just lost? How will the employers that laid off these workers be helped? Where are the tax incentives or loan programs for existing employers?

We need loan guarantees for existing businesses to improve plants, purchase capital equipment, fund R&D, and be competitive in the world economy. At the same time, small and micro businesses need assurances that they won't be unionized and forced to pay benefits they can't absorb.

Do we let the existing businesses fail to create new "green" industries?

There's a lot of help to save/create government jobs in this Bill. But the government doesn't create anything...the government lives off of the private sector.

We need targeted private sector stimulus. Tax cuts do help to spur investment, but loans/guarantees are also necessary...tax cuts alone don't work. The banks and leasing companies need to do their part. We need to ATTRACT capital investment into business expansion and growth...which might also mean chasing capital away from derivatives and unproductive speculation (unrestricted gambling).

 

[russ_watters]

You can't really say that Obama never deemed any of these projects necessary, can you? He promised during his campaign to invest in education and infrastructure and cleaner energy.

So then the Economic Stimulus Package isn't an economic stimulus package, it is just an excuse to fund the the things that Obama wanted funded?? That sounds like bait and switch to me.

I don't watch much Cspan, but caught a little the other day when an economic advisor was being interviewed by a congressional committee. One congressperson who questioned him pointed out that much of the Economic Stimulus Package is going to things - such as education - that are not being harmed by the recession.

And Congress may have just been waiting for the changing of the guard before pushing for projects that they may have expected the old guard to veto. And until a month ago, the Dems didn't have a strong enough majority in Congress to do very much.

Now you're getting it! Congress/Obama is now jamming down the throats of Americans all the pet projects they couldn't get passed before - because they aren't necessary - under the guise of an economic stimulus package that is a lot more than just an economic stimulus package.

one could just as well use your argument that all the spending in this bill is unnecessary because Congress never chose to spend it before now, to every single spending bill ever passed).

The vast majority of the spending that the federal government does is small tweaks on what it did last year. This is something entirely different - entirely new.

Don't misunderstand me: we're in a deep recession, which is a new thing in the past few months. And it requires new and big action to stimulate the economy. But to really stimulate (fix) the economy, you need to do things that target the sources of the problem. Why are we in this mess? We're in this mess because of the credit crunch making cash less available. So naturally, the primary solution to the problem needs to be things that address the availability of credit and supply ready cash to people to spend. This bill doesn't address those issues at all.

I will say this, though: it is looking a lot better than it was a week ago. They've trimmed a lot of fat from it.

 

[russ_watters]

You have got to be kidding! We've been fighting a $trillion war, remember?

I remember people like you complaining about the cost of the $ trillion war... And now I'm laughing at the irony that you guys are not even batting an eyelash at an immediate spending of cash that far exceeds any deficit Bush ever had.

What scares me is that we are spending money in a way that won't help the economy much in the short term and will do great harm (by increasing the national debt) in the long term.

 

[mheslep]

I don't think he promised this Bill as explicitly written. He was promising action or some stimulus. The Bill came from congress and more specifically the democrats in congress. I don't see a viable alternative from the republicans.

Perhaps if the $1+ trillion spent so far was working, or rather Fannie Mae, Freddie Mac, AIG, and all the other financial institutions were functioning or driving the economy, a stimulus package such as the current Bill would not be necessary.

We've seen a lot of criticism about the Bill will not work, or what people think will not work, but I don't see much in the way of "what will work".

So for those who claim "what won't work", how about offering a viable alternative!

Again, Mankiw's plan.: https://www.physicsforums.com/showpost.php?p=2065865&postcount=179 Care to comment?
Mankiw:
-Gets the money out there almost immediately via the payroll tax. A semi-permanent change like this is notthe same as a one time check in the mail ala last year.
-Gas tax revenue balance so the deficit/debt doesn't go ballistic.
-Can be turned off by date certain.
-Plan for state aid doesn't corrupt the states via moral hazard, federalism survives.
-Gas tax helps wean US off foreign oil, but payroll tax break eliminates the usual hurt a gas tax puts on the poor.

Congress can still do energy, infrastructure policy, fix housing through the normal hearings and committees process and get it right, later.

 

[mheslep]

You have got to be kidding! We've been fighting a $trillion war, remember? Also, the Republicans controlled the government - the party that brings prosperity to the country. :rofl:

I remember people like you complaining about the cost of the $ trillion war... And now I'm laughing at the irony that you guys are not even batting an eyelash at an immediate spending of cash that far exceeds any deficit Bush ever had.

What scares me is that we are spending money in a way that won't help the economy much in the short term and will do great harm (by increasing the national debt) in the long term.

http://www.cbo.gov/ftpdocs/86xx/doc8690/10-24-CostOfWar_Testimony.pdf" so far (does not include Afghanistan):
Includes Military Operations, Indigenous Security Forces, Diplomatic Ops & Foreign Aid projects, Veterans Benefits.
Does not include interest payments on the debt incurred.
(billions)
2003: 49
2004: 68+5+15
2005: 53+6+1
2006: 89+3+3
2007: 113+6+3+1
Total $417B for Iraq over five years, $540B '03 to '08 if 2007 costs repeated in '08.
By comparison, Paulson et al let fly the first $350B/$700B TARP money in a couple of weeks., followed now by a spending bill of ~$900B outside the normal budget.

 

[Skyhunter]

Now you're getting it! Congress/Obama is now jamming down the throats of Americans all the pet projects they couldn't get passed before

Isn't that why we have elections?

 

[Astronuc]

Some veteran Democrats say Obama could have made it easier for himself.

"I think it is important that he reached out. But lesson learned: It would have been better for him to send up his idea of a bill," instead of having House Democratic leaders initiate the process, said Sen. Dianne Feinstein, D-Calif.

Analysis: Obama may learn from slips on stimulus
http://news.yahoo.com/s/ap/20090208/ap_on_go_pr_wh/obama_congress_analysis

I wonder what a McCain administration would have done?

Again, Mankiw's plan.: https://www.physicsforums.com/showpost.php?p=2065865&postcount=179 Care to comment?
Mankiw:
-Gets the money out there almost immediately via the payroll tax. A semi-permanent change like this is notthe same as a one time check in the mail ala last year.
-Gas tax revenue balance so the deficit/debt doesn't go ballistic.
-Can be turned off by date certain.
-Plan for state aid doesn't corrupt the states via moral hazard, federalism survives.
-Gas tax helps wean US off foreign oil, but payroll tax break eliminates the usual hurt a gas tax puts on the poor.

Congress can still do energy, infrastructure policy, fix housing through the normal hearings and committees process and get it right, later.

A payroll tax break dribbles out - month by month or biweekly - and a payroll tax break doesn't help the unemployed. I personally don't need a tax reduction. I pay a reasonable amount (enough to support a family of 4 above the poverty line), and probably should pay more.

The states need to raise their own revenue. It's ridiculous for the federal government to tax individuals only to turn around and give the taxes back to the states. The states need to raise revenue and perhaps cut the perks to officials, e.g. expense accounts, pensions, etc.

Anyway, with respect to the stimulus package -
Bipartisan Deal Eases Way For Stimulus Bill in Senate
http://www.washingtonpost.com/wp-dyn/content/article/2009/02/06/AR2009020602097.html

The bipartisan deal was cut after two days of talks and would cut more than $100 billion from the $920 billion bill, dropping its cost to about $820 billion, if amendments added on the Senate floor are retained.

The Bill was originally ~$820 billion, then about ~$100 billion was added, then ~$100 billion cut. The stimulus may work, but probably only if the banks lend or finance big projects, e.g. in energy or infrastructure.

Now the House and Senate versions need to be reconciled.

 

[Astronuc]

I received this in an email from Slate.com

"Put This Plan In Motion"
By Lydia DePillis
Posted Sunday, Feb. 8, 2009, at 6:04 AM ET

The New York Times leads with continuing stimulus debate in Congress, where the Senate proposal is set to collide with a House bill that currently does more to help states avoid catastrophic cuts in services. House Speaker Nancy Pelosi is "very much opposed" to the cuts being made to the Senate version, which was trimmed down from a high of $900 billion to about $827 billion through slashing aid to states, funding for priorities like school construction and broadband wireless in rural areas, as well as President Barack Obama's promised middle-class tax cut.

The Los Angeles Times leads with the impact of those cuts in aid to states, which are facing a collective $47.4 billion shortfall this year and $84.3 billion in 2010. On a state-by-state basis, the gaps are often breathtaking in size: Nevada's amounts to 38 percent of its general fund, while Washington's governor made a no-new-taxes pledge in her tough reelection campaign, leaving few options to fill that state's hole besides closing state parks, releasing low-risk prisoners, and "shredding" the state's generous social service programs.

The states are supposed to tax their residents in order to support the services their residents demand (or maybe the residents don't really want the services). Otherwise, the states can simply run themselves like a business and cut services in line with revenues.

It seems people just expect the government to indefinitely borrow and lay out more funds/subsidies than revenue collect. I think Washington needs to start sending out statements of how much each of us owes on the debt and interest.


Update (CNN): What got cut from the stimulus bill
http://www.cnn.com/2009/POLITICS/02/07/stimulus.cuts/index.html

 

[mheslep]

...A payroll tax break dribbles out - month by month or biweekly - and a payroll tax break doesn't help the unemployed.

Creating jobs will help the unemployed. Taking collectively the payroll tax break is not a dribble. To get people to spend, start companies, take out loans, etc, they need to see a permanent change in their income which this would do. The payroll tax also has an immediate effect on businesses as they pay half - company wide that is a lot of money - immediately hitting the balance sheets of businesses.
http://en.wikipedia.org/wiki/Permanent_income_hypothesis

I personally don't need a tax reduction. I pay a reasonable amount (enough to support a family of 4 above the poverty line), and probably should pay more...

to some bureaucrat that will spend that money more effectively than you can?

 

[jal]

The payroll tax also has an immediate effect on businesses as they pay half - company wide that is a lot of money - immediately hitting the balance sheets of businesses.

Yes,... and under present economic conditions they will do like the banks and keep the money. No hiring. More money in their pockets.

It would be better to put saving in the hands of the workers. The saving of individuals would get invested by the banks where they will get a multiplier of 10 as they lend it out to the good businesses.
jal

 

[Proton Soup]

i think it's silly to just throw money out there without getting anything done. at least FDR got some **** done with the WPA. we've got a ton of crumbling bridges and sewers that need fixing. just pay people (with stringent requirements that workers be citizens, btw) to do that work. these people will then put that money to work in the economy when they spend it, and you also accomplished something along the way. rebates are just stupid, imo.

 

[Astronuc]

to some bureaucrat that will spend that money more effectively than you can?

We have to pay off the debt the republicans ran up.

If Spending Is Swift, Oversight May Suffer

The Obama administration's economic stimulus plan could end up wasting billions of dollars by attempting to spend money faster than an overburdened government acquisition system can manage and oversee it, according to documents and interviews with contracting specialists.
. . . .

I understand the desire for swift action on the economy, but reckless spending will not help or solve the problem.

GOP Sees Positives In Negative Stand
Leaders Seize On Spending Issue

Funny that they didn't see a problem with deficit spending or supplemental spending before. These must be 'born again' conservatives?

Obama Wants [Bank] Bailout To Go Private - now there's an idea.

The New York Times and the Wall Street Journal's world-wide newsbox lead with details on what the new bailout plan will look like. It seems the White House wants private investors to play a big part in helping banks get the bad assets out of their balance sheets.

U.S. Bank Bailout to Rely in Part on Private Money
http://www.nytimes.com/2009/02/09/business/09bailout.html

Personally, I think the economic stimulus needs to be supplied by corporate/private investment too, with the government playing some role, e.g. identifying priorities in infrastructure, improving foreign policy, . . . . .

 

[WhoWee]

President Obama is going to Elkhart Indiana today to talk about his stimulus package...lots of unemployed workers (15% approx) mostly from the RV manufacturing segment. Frozen credit markets had a big impact on this segment..

Now the ongoing problem is this...other than unemployment benefits, COBRA payments and food stamps...how will the stimulus bill get the RV manufacturing industry stimulated...loan guarantees to purchase RV's, tax credits to purchase RV's, loan guarantees or tax incentives to RV sales companies, government purchases of RV's to provide to people who lost their homes in the Katrina disaster that are still in hotel rooms?

My guess is that unemployed assembly workers from an RV manufacturing facility are not readily trained to work on "shovel-ready" construction projects.

Unemployment benefits will prevent soup lines, but only delay the need to create or re-establish long term private sector jobs.

 

[mgb_phys]

loan guarantees to purchase RV's, tax credits to purchase RV's, loan guarantees or tax incentives to RV sales companies, government purchases of RV's to provide to people who lost their homes

Paint them green, sell them to the Army for $1M each as forward command recreational support facilitation units.
How dare you question it as a waste of money - what are you some sort of communist/terrorist/peacenik ?

 

[Astronuc]

Paint them green, sell them to the Army for $1M each as forward command recreational support facilitation units.

or paint them 'desert sand' and send them to the Middle East. :rofl:

 

[WhoWee]

I'm glad we can joke about it...but really, how CAN these companies and their laid-off employees be helped.

 

[mgb_phys]

I'm glad we can joke about it...but really, how CAN these companies and their laid-off employees be helped.

I wasn't joking - this is standard procedure.
The army here is getting new trucks, they are completely different to the trucks they already have and will need mechanics retraining, separate stocks of spare parts and different load pallets. But they are built in a factory here in a swing constituency.

The UK and Germany are building a hugely expensive air superiority fighter to counter East German MIGs - they are committed to buying more than they have pilots for and most will be mothballed as soon as they are delivered. The 'East' German MIGs will be scrapped to make room for them. But the workers jobs will be secure.

The US built an international space station because with the end of the cold war Boeing was looking at risk from competition in the airline business.

It's basically just paying people to dig holes and then others to fill them in - but as long as it's painted green it's not socialism.

 

[Astronuc]

As long as the US government is spending money on corporations, I'd like to see the automobile companies move away from large vehicles into more fuel efficient cars, including hybrids. Let the government finance the retooling.

I'd like to see small companies like e-solar and byogy, which are already demonstrating their technologies, get some investment. But let the investment firms do that, with the government standing by. I'd like to see the several hundred $billion that goes to imported oil go to domestic energy sources - particular solar and wind, and even nuclear.

I'd like to see forest, agricultural (food), and marine stewardship programs in which people could take a piece of land, or marine areas, and develop/maintain them as caretakers.

 

[WhoWee]

As long as the US government is spending money on corporations, I'd like to see the automobile companies move away from large vehicles into more fuel efficient cars, including hybrids. Let the government finance the retooling.

I'd like to see small companies like e-solar and byogy, which are already demonstrating their technologies, get some investment. But let the investment firms do that, with the government standing by. I'd like to see the several hundred $billion that goes to imported oil go to domestic energy sources - particular solar and wind, and even nuclear.

I'd like to see forest, agricultural (food), and marine stewardship programs in which people could take a piece of land, or marine areas, and develop/maintain them as caretakers.

All good ideas...I just don't think nuclear expansion is possible...unless we build on military bases.

Not to stray too far from the thread, but...is anyone aware that Delphi (GM/Packard electrical division in Chapter 11) sent their union retirees notice that health benefits will be terminated in March/April? Coincidentally, the stimulus package will continue health benefits at a yet to be determined rate/time.

http://finance.yahoo.com/banking-budgeting/article/106558/Next-Steps-on-Stimulus-the-Key-Issues

Is it possible some of the Big 3 retiree costs are being shifted to the stimulus plan? I guess the transparency IS there...if you look close enough.

 

[Astronuc]

All good ideas...I just don't think nuclear expansion is possible...unless we build on military bases.

A number of utilities have applications before the NRC for new units. I believe all proposed units are cited at existing sites which have room for expansion. Many sites were designed for 2, 3 or 4 units. The French utility EdF has numerous sites with 4 units.

Not to stray too far from the thread, but...is anyone aware that Delphi (GM/Packard electrical division in Chapter 11) sent their union retirees notice that health benefits will be terminated in March/April? Coincidentally, the stimulus package will continue health benefits at a yet to be determined rate/time.

http://finance.yahoo.com/banking-budgeting/article/106558/Next-Steps-on-Stimulus-the-Key-Issues

Is it possible some of the Big 3 retiree costs are being shifted to the stimulus plan? I guess the transparency IS there...if you look close enough.

Health care and retirement/pensions are among the biggest labor related costs, in addition to direct compensation. Certainly any company in Chapter 11 is going to give those up to reduce cost, and many companies have done so, which is one of the reason the PBGC was established. http://www.pbgc.gov/

What concerns me is that corporations shift the burden of employee benefits onto the government, which is really us.

Ultimately the question becomes - who's going to pay for pensions/retirements and healthcare. Or do we simply accept some people will not get access to healthcare and will have no significant source of income in retirement. Some people may not be able to retire. Alternatively, should the state and federal governments set up pauper villages, which the poor can live in a subsistence type of living.

 

[WhoWee]

A number of utilities have applications before the NRC for new units. I believe all proposed units are cited at existing sites which have room for expansion. Many sites were designed for 2, 3 or 4 units. The French utility EdF has numerous sites with 4 units.

Health care and retirement/pensions are among the biggest labor related costs, in addition to direct compensation. Certainly any company in Chapter 11 is going to give those up to reduce cost, and many companies have done so, which is one of the reason the PBGC was established. http://www.pbgc.gov/

What concerns me is that corporations shift the burden of employee benefits onto the government, which is really us.

Ultimately the question becomes - who's going to pay for pensions/retirements and healthcare. Or do we simply accept some people will not get access to healthcare and will have no significant source of income in retirement. Some people may not be able to retire. Alternatively, should the state and federal governments set up pauper villages, which the poor can live in a subsistence type of living.

I certainly hope all of the approved nuclear facilities are built. I just don't think any new installations will ever be approved...again, unless it's done on a military base.

As for pauper villages, there is quite a lot of money allocated in the stimulus package to upgrade public housing. However, as we all know, public housing projects are rarely successful for the people who live there.

I think the better alternative is to go back into the cities and recycle abandoned properties. In N.E. OH, there are hundreds of building lots available for the cost of processing the paperwork. If AFFORDABLE GREEN HOUSES are built ($50,000 to $75,000 for instance), then low income people could reclaim inner city neighborhoods and own a home...without causing another housing bubble. If land is basically free ($1,000) the speculators can't run up the price. The key is locking in the manufacturing/production cost of the homes and limiting the initial options until the original loans are paid back.

As for do-ability, I have a friend in Cleveland that sells 1,000 square foot houses with an R-50 insulation factor on the roofs and R-30 on the walls in this price range. He's also built 10,000 square foot McMansions that are so well insulated the highest utility bills they've ever had (in Cleveland, OH) are about $150 per month winter or summer. A 1,000 square foot design can be heated/cooled very efficiently with geothermal (68 degrees year round with a water tank buried at 15', a circulating pump, heat exchanger and a fan).

As for the GM people, I've spoken directly with a few of the Delphi union retirees in Warren, Ohio, that's how I found out they are losing their health care in the Chapter 11. I don't think they qualify as poor though. The ones I've spoken with average $3,400 per month in pension benefits, plus roughly $1,500 in social security and about $850 per month in company paid health care (the few I spoke with pay $178 for 2 persons).

 

[Gokul43201]

So then the Economic Stimulus Package isn't an economic stimulus package, it is just an excuse to fund the the things that Obama wanted funded?? That sounds like bait and switch to me.

Oh jeez! Isn't it just possible that there are infrastructure and energy and education projects that could also stimulate the economy?

This is getting a little silly.

If the bill includes spending meant to stimulate, you call it 'pork', and if it includes spending on projects that have been in need of investment, you call that 'bait and switch'!

 

[Gokul43201]

You have got to be kidding! We've been fighting a $trillion war, remember?

No one says it better than Jon:

http://www.thedailyshow.com/video/index.jhtml?videoId=217693&title=clusterf#@k-to-the-poor-house

 

[Skyhunter]

WhoWee,

I think the better alternative is to go back into the cities and recycle abandoned properties.

Bingo. But don't miss the forest while focusing on the trees, or the city for the buildings. Rebuilding our cities to be not only more energy efficient, but more livable would be a good long term investment that could also provide jobs now. Cities need to be livable. That means that most goods and services should be within walking distance of anywhere. Public commons, IE the streets should be made more available to people and less available to automobiles. In a properly designed city there is absolutely no excuse for dragging a 4 ton SUV with you wherever you go. Invest the infrastructure money to improve walkablity and you restore livability.

It seems the Republicans are clueless. I got this in an email from bikeleague.org

Senator DeMint (R-SC) has offered an amendment to SPECIFICALLY prohibit funding for bicycles, walking and offroad vehicles. The amendment ONLY goes after bicycle, walking, and offroad vehicle funding.

 

[WhoWee]

WhoWee,


Bingo. But don't miss the forest while focusing on the trees, or the city for the buildings. Rebuilding our cities to be not only more energy efficient, but more livable would be a good long term investment that could also provide jobs now. Cities need to be livable. That means that most goods and services should be within walking distance of anywhere. Public commons, IE the streets should be made more available to people and less available to automobiles. In a properly designed city there is absolutely no excuse for dragging a 4 ton SUV with you wherever you go. Invest the infrastructure money to improve walkablity and you restore livability.

It seems the Republicans are clueless. I got this in an email from bikeleague.org

I think you've nailed one of the biggest problems with public housing projects...they typically don't provide for a high quality of life...and I'm not talking about crime.

A city does need to be livable. Housing needs to be in close proximity to TRANSPORTATION to: shopping/groceries, medical treatment, schools, recreation and of course have access to employment centers.

The city I cited as having hundreds of inner city lots available for $1,000 each, only has 4 grocery stores in or on the border of the city limits. There are a few dozen c-stores, but the selection is limited and prices inflated. Bus routes no longer service the housing projects and don't run to the shopping centers. The older neighborhoods are primarily populated with the original home owners, most 70 years or older. There is a lot of crime, but the city does it's best to tear down abandoned houses used for a variety of illegal uses.

Most of the vacant lots are within a mile of the downtown business district. These neighborhoods were the choice real estate in the 1920's through 40's...some were burned in the riots in the 60's and abandoned in the 80's and 90's. The city took action in the late 90's and 2000 (after Clinton's crime Bill was enacted).

You are correct, until the neighborhoods are more livable, a re-population will not be achieved.

 

[WhoWee]

Here is something else to think about.

I just did a data base look up of businesses with 1 to 99 employees in the Rustbelt/Great Lakes States of Ohio, Pennsylvania, New York, Illinois, Indiana, Iowa, Michigan, Wisconsin, New Jersey and Minnesota. The result is over 3,300,000 total employers. The source was GoLeads, a paid data base service. I didn't figure out the total employment of these businesses...let's assume an average of 10 employees per business...that's approximately 33 million jobs total (some people work more than 1 part time job).

These companies could be defined primarily as low cap, closely held/owner operated and private. This is the heart of American business. Many of the Elkhart businesses will fit into this category. These companies don't run to Wall Street for funding...they go to the local bank. Their credit has been frozen for months. The ripple effect of Big 3 problems also arguably have a direct impact on many of these businesses.

After listening to the Obama speech tonight and all of the conservative counter positions, it's obvious that nobody has any direct incentives planned for this segment of business. I suppose it could be argued that a few contractors will be able to bid on stimulus projects or the factories will have a chance to supply something to companies that win projects, but that is a narrow opportunity at best.

Everyone likes to focus on big labor and big corporations during political/philosophical discussions, but this segment is also too important to fail. This is the segment of private industry that actually hires the working poor. The owners of businesses in this segment take personal risk. Many owners have their homes pledged at the bank, and can earn a good living when the economy is strong. When the economy is weak, many just tread water and maintain as much employment as they can...loyalty often has meaning in the smaller shops.

If this segment ever totally fails...we'll need soup lines. Someone needs a specific plan to address the problems of this business segment.