Stimulus Issues: What's The GOP's Answer?

[djm99]

Huh?

Maybe I'm reading too much into your post. I too want to stay on track, but I was insulted by that entire program. It's insulting that most children are in bed at midnight, yet the government offers midnight basketball as a means of getting inner city youth off the streets. Their behinds should have been at home like everybody else. The whole bill was insulting. I'm sorry for jumping to conclusions. My humble apologies.

 

[Mr Man]

I'm not sure? Have the Republicans submitted the bill for their version of the stimulus bill yet?

I do not believe they are being given floor time to do this.

At least I havent seen it (not very transparent in Congress).

Tut tut

 

[DawnCt1]

The richer the government, the poorer the people.

 

[Free4Life11]

The plan is to reduce taxes permanently. Sending someone a one time check for $500 ($10 per week) does nothing to stimulate the economy. The savings rate has gone up so people are hanging on to their money. That is what they will do when given a one time check. Lowering the capital gains tax will spur investment. Investors are more willing to take a risk if they can keep more of their reward. Investment dollars fuel industry. Lower the corporate tax. The US corporate tax is one of the highest in the world. A lower corporate tax would spur investment and make it more affordable to hire workers.

I agree with all of this, BUT if 70% of our economy is driven by consumer spending, shouldn't the income tax rates be lowered? If you take less from consumers, they will have more to spend.

 

[DawnCt1]

Maybe I'm reading too much into your post. I too want to stay on track, but I was insulted by that entire program. It's insulting that most children are in bed at midnight, yet the government offers midnight basketball as a means of getting inner city youth off the streets. Their behinds should have been at home like everybody else. The whole bill was insulting. I'm sorry for jumping to conclusions. My humble apologies.

I think most of us felt the same way you did about the program. It was insulting, and no doubt Mr. Man mentioned it because it was useless.

 

[djm99]

One thing that I have noticed over the years is that house prices are inversely proportional to mortgage rates. Low mortgage rates lead to inflated housing prices. While it would be good to stablize the housing market; at what price? The current prices? What they were in 2007? What is the ideal price? When do they become affordable or unaffordable? The bottom line is always what is available to the buyer at the end of the month to pay the mortgage, interest, tax and insurance. If they are going to offer a 4% mortgage guarantee, then how about going back to the old standard of 28/33% of gross income for mortgage/other debts?

I didn't know that has changed. My DH and I just purchased a home in June 2008. Our mortgage guy was VERY specific of how much house we could afford. Me being me - only purchased a house on my DH's income - He only made a few thousand more than me. I'm so glad I did that. I resigned from my job within 2 weeks of closing.

 

[DawnCt1]

I agree with all of this, BUT if 70% of our economy is driven by consumer spending, shouldn't the income tax rates be lowered? If you take less from consumers, they will have more to spend.

Absolutely. My first line was to make the tax cuts permanent. Reducing them gives consumers more to spend. The rate of savings is up right now, which is a good thing, people should be in the habit of saving money, BUT I think in part, many people are saving because they cannot count on taxes NOT going up in the near future. There is also job insecurity. I don't think it is helpful for leaders in government to constantly beat the drum that "things are going to get worse, much worse". It becomes a self fulfilling prophecy and people hunker down waiting for that other shoe to drop. Japan endured a 10 year recession, perhaps prolonged by government over involvement. Again a wealthy government has poor people.

 

[ntsammy5]

The Republican alternative makes sense tome.

http://www.cnn.com/2009/POLITICS/02/02/stimulus/index.html

 

[DawnCt1]

I didn't know that has changed. My DH and I just purchased a home in June 2008. Our mortgage guy was VERY specific of how much house we could afford. Me being me - only purchased a house on my DH's income - He only made a few thousand more than me. I'm so glad I did that. I resigned from my job within 2 weeks of closing.

Years ago it was 20% down. Then 5% down. Then no income verification. Then 110% loan to value. All backed up by Fannie and Freddie and banks lending under threat of the federal government. No wonder it all fell apart.

 

[djm99]

I agree with all of this, BUT if 70% of our economy is driven by consumer spending, shouldn't the income tax rates be lowered? If you take less from consumers, they will have more to spend.

To me this makes since. If FICA didn't take so much I could literally pay a bill or go to my favorite restaurant, or buy those boots in my favorite shoe store. This I can see.

 

[Mr Man]

Maybe I'm reading too much into your post. I too want to stay on track, but I was insulted by that entire program. It's insulting that most children are in bed at midnight, yet the government offers midnight basketball as a means of gettin\\\\\\\\\\
g inner city youth off the streets. Their behinds should have been at home like everybody else. The whole bill was insulting. I'm sorry for jumping to conclusions. My humble apologies.

No prob at all. In all sincerity, I did not consider this particular program based on anything other than an example of what govt does (in a ham-fisted, inefficient yet sincere fashion. It did have the best of intentions after all).

Peace from me to you.

Maybe I better stick with analogies

Let us say a car is the USA & our motor isn't running right and is low on fuel.

We take the car to the mechanic (Fed Govt) and they look at the car and tell us we need an all new interior to the car, new seats, new lights, extra air bags, GPS, safety lights on 8 sides, environmentally friendly emission systems & we can get all the work done in the 4 years for a cost that is roughly double what the car is worth.

Yet, we have ignored the motor (business) and the fuel (taxpayers).

This is my concern with the stimulus.

Regards,

 

[djm99]

Years ago it was 20% down. Then 5% down. Then no income verification. Then 110% loan to value. All backed up by Fannie and Freddie and banks lending under threat of the federal government. No wonder it all fell apart.

I think income should be verified and I agree that you should be able to afford your house but 5% and even 3% down IMO is okay - again if income is verified. Houses are way too expensive for those 20% down payments now. Everybody is not blessed with inheritable income. VERY few individuals would be able to do that. I have a modest home. No glamour - only paid $130,000. It would have taken us 10 years to save $26,000 + closing on a house. The closing on this house was $9000 - just to close. And that didn't include the ernest money - which went toward the house.

 

[Free4Life11]

To me this makes since. If FICA didn't take so much I could literally pay a bill or go to my favorite restaurant, or buy those boots in my favorite shoe store. This I can see.

I think suspending FICA taxes for the rest of the year would be wonderful! AND maybe it would spur Congress to get the ball rolling on changes to the white elephant in the room....Medicare/SS! Wait, who am I kidding Hey, a taxpayer can dream, can't he!

But really, I'm tired of all these credits and rebates and nonsense. Just make it SIMPLE. Suspend FICA, lower the marginal rates, etc. don't attach so many stings to it. Then again, if they don't they are accused of "tax cuts for the right." I always loved people with kids would cry foul over the "Bush tax cuts." Hey, I'm single, so I'll glady take the increase of the "go forth and multiply" tax credit you got!

 

[wonderlanne]

they could also try temporarily lowering the payroll tax-the only problem with that is once people get used to having more of their money, they're sure not going want to allow that tax to go back up.

right, but people would have more pocket change and would likely spend it, and sales tax would benefit locally. that's an excellent way to stimulate the economy.

 

[djm99]

I am in total agreement with getting rid or lowering significantly FICA. My biggest concern is the issues with individual States. How would that help the states? My state MO - is having some real financial woes (like many others). Teachers are even getting laid off - how can teachers get laid off. Especially in districts when the average teacher has 26 students in the classrooms. Gibbs (Obama's Press guy) said some state had to lay-off police officers before they even graduated from Police Academy. How can this be address? Can individual states get a loan?

 

[DisneyMomOK]

A tax credit for purchase of a new car made in the US by US workers. I would certainly buy one, if that incentive was available. It would be an immediate spur to the economy and dry up some of the oppressive inventory now sitting on dealers' lots.

 

[djm99]

A tax credit for purchase of a new car made in the US by US workers. I would certainly buy one, if that incentive was available. It would be an immediate spur to the economy and dry up some of the oppressive inventory now sitting on dealers' lots.

Well, I'd qualify. I only buy American cars. The one foreign car I bought gave me the blues. I believe a tax credit is still being offered if you buy a hybrid. At least in MO it was. I don't know if that is still true, but I think it is.

 

[Disneycrazymom]

Correct me I may be wrong but I think there is a component to lower the 10% tax rate to 5% and the 15% rate to 10%. That would certainly help. It is too bad the congressional leadership doesn't seem to be listening as this seems like a good beginning plan. IMHO the variety of tax breaks coupled with some needed infrastructure projects could really turn this around.

The rest of the social spending needs to be worked out in the budget, just like it is every year. It doesn't need to be rushed through with this part.

 

[DisneyMomOK]

Well, I'd qualify. I only buy American cars. The one foreign car I bought gave me the blues. I believe a tax credit is still being offered if you buy a hybrid. At least in MO it was. I don't know if that is still true, but I think it is.

I agree; I think the hybrid tax credit is still in effect. However, this was to be a significant portion of the purchase price for any new car, which would be a real incentive to purchase. I can't find anything on this on the internet, but I know it was a Republican Senator that suggested this last fall. I wish the Big 3 would list their vehicles online and let people bid. Put in a reserve, give the purchaser the option of buying a warranty or not, let the highest bidder win.

 

[SorcererDonald16]

djm99, you might be interested in some of the less publicized details of the House GOP's version of the bill. It has some really good components to it, but the news barely gave it any coverage. It's not that they're just opposing the bill as it is; they have actual plans on what to do instead. These details are tax related, but it would help a lot of people, especially those really hurting right now. The tax credit for those buying a home with some money down would also encourage spending.

1. A permanent five percentage point reduction for those who qualify for the 10% and 15% tax brackets
2. A 20% tax deduction for all small businesses
3. Remove the tax on unemployment benefits
4. A $7,500 tax credit for anyone who puts down at least 5% on a house

http://marcambinder.theatlantic.com/archives/2009/01/republicans_to_introduce_econo.php