Stimulus Package and Economic Questions

[DVC Sadie]

I have thought a lot lately about this "stimulus package" and the amount of money that is being bandied about is draw dropping to me.

After watching CNN this morning and hearing that another 350 billion dollars (on top of the 800 billion) will be going once again to banks to help with lending.

How will we ever be able to afford all this money that will have to be printed? How will we be able to pay just the interest on this money? How will all this effect inflation? Won't this be very dangerous to us (all of us)?

 

[DVCLiz]

I have thought a lot lately about this "stimulus package" and the amount of money that is being bandied about is draw dropping to me.

After watching CNN this morning and hearing that another 350 billion dollars (on top of the 800 billion) will be going once again to banks to help with lending.

How will we ever be able to afford all this money that will have to be printed? How will we be able to pay just the interest on this money? How will all this effect inflation? Won't this be very dangerous to us (all of us)?

The 350 billion going to the banks is the second half of the original 700 billion that was voted on in the fall ( remember the whole suspending the campaign brouhaha?) 350 billion has been spent already, but another 350 billion has been authorized from that original bill. In other words, that's not a "new" 350 billion.

As far as your other questions, no one knows. I would guess the answers would be I don't know, I don't know, I don't know, and yes.

IF the economy recovers and we have a more robust housing market, a solid financial sector, and good consumer confidence and spending, things will look much better. But we will have to pay for it all - and we'll do that by raising taxes and cutting spending, just like you do at your house when you get behind (or at least that is the idea!!)

 

[rabx5]

Deja Vu



Deja Vu

 

[AlexTina]

I have thought a lot lately about this "stimulus package" and the amount of money that is being bandied about is draw dropping to me.

After watching CNN this morning and hearing that another 350 billion dollars (on top of the 800 billion) will be going once again to banks to help with lending.

How will we ever be able to afford all this money that will have to be printed?
We won't

How will we be able to pay just the interest on this money? How will all this effect inflation? Won't this be very dangerous to us (all of us)?
Yes very dangerous!

Call me crazy but if my bank accounts were empty and all my credit cards were maxed out the last thing I would do would be to go out looking for more credit. Obama is pushing for this stimulus which he allowed Nancy Pelosi and Harry Reid to craft and he has no idea what the outcome will be. He is not an economist nor are any of the folks who crafted the bill, yet they are choosing to push this through instead of listening to the many economists and many many Americans who don't want this and who have said loud and clear that this will do nothing for the economy in the long term other than possibly making it worse. But what do we know, were just the unimportant little people who get to pay for it all.

 

[shortbun]

I think 'trickle up' economics would be the real solution here. Give the money to the people and allow them to pay their bills-sending the money to the banks and businesses that way - thus everyone is taken care of and we don't have the rich hording all the money - which is exactly what they do.

 

[DVC Sadie]

Deja Vu



Deja Vu

I'm sorry if my thread bores you or makes you upset. This thread isn't about bashing one side of the aisle or the other. I really am trying to figure out some things and wanted some feedback.

 

[DVC Sadie]

The 350 billion going to the banks is the second half of the original 700 billion that was voted on in the fall ( remember the whole suspending the campaign brouhaha?) 350 billion has been spent already, but another 350 billion has been authorized from that original bill. In other words, that's not a "new" 350 billion

As far as your other questions, no one knows. I would guess the answers would be I don't know, I don't know, I don't know, and yes.

IF the economy recovers and we have a more robust housing market, a solid financial sector, and good consumer confidence and spending, things will look much better. But we will have to pay for it all - and we'll do that by raising taxes and cutting spending, just like you do at your house when you get behind (or at least that is the idea!!)

Thanks for explaining the 350 billion.

 

[eliza61]

Call me crazy but if my bank accounts were empty and all my credit cards were maxed out the last thing I would do would be to go out looking for more credit. Obama is pushing for this stimulus which he allowed Nancy Pelosi and Harry Reid to craft and he has no idea what the outcome will be. He is not an economist nor are any of the folks who crafted the bill, yet they are choosing to push this through instead of listening to the many economists and many many Americans who don't want this and who have said loud and clear that this will do nothing for the economy in the long term other than possibly making it worse. But what do we know, were just the unimportant little people who get to pay for it all.

Unfortunately Alex,
You're crazy. People do that all the time, which may be the root of the problem. Our mind set. Haven't you ever heard of the expressiion "robbing Peter to pay Paul"? People max out their cards and simply open up new ones. People get Home equity loans to pay off cards and then simply run them up again, now the have a helo to pay off plus credit card debt.
Sorry to bust your bubble because it is not on Nancy and Harry, do you remember bailing out AIG, Citigroup, fannie and Freddie, the entire first $700 billion fiasco. Democrats and Republicans alike are playing economist.

 

[rabx5]

I'm sorry if my thread bores you or makes you upset. This thread isn't about bashing one side of the aisle or the other. I really am trying to figure out some things and wanted some feedback.

It doesn't upset me or bore me. No need to apologize at all

It's just this subject (Stimulus) and the question (how can we afford it) has been brought up so many times with little results except for bickering between the left and right.

This thread will get hairy and in the long run, the question will not be answered-that's why I used the deja vu and the

 

[punkin]

How will we ever be able to afford all this money that will have to be printed? How will we be able to pay just the interest on this money? How will all this effect inflation? Won't this be very dangerous to us (all of us)?

Anyone ever heard of hyperinflation?

Actually, I don't think there will be hyperinflation. I think all that new money is actually holding us back from a deflationary period, and much as I would like deflation to bring some prices down, it will be REALLY bad for the economy.

As far as interest-what interest? We are basically just printing more money and giving it out to banks at practically 0% interest.

 

[DVC Sadie]

Call me crazy but if my bank accounts were empty and all my credit cards were maxed out the last thing I would do would be to go out looking for more credit. Obama is pushing for this stimulus which he allowed Nancy Pelosi and Harry Reid to craft and he has no idea what the outcome will be. He is not an economist nor are any of the folks who crafted the bill, yet they are choosing to push this through instead of listening to the many economists and many many Americans who don't want this and who have said loud and clear that this will do nothing for the economy in the long term other than possibly making it worse. But what do we know, were just the unimportant little people who get to pay for it all.

I agree with you on Pelosi and Reid but I am trying to keep politics out of this thread because I have some major concerns on the economy.

 

[DVC Sadie]

Anyone ever heard of hyperinflation?

Actually, I don't think there will be hyperinflation. I think all that new money is actually holding us back from a deflationary period, and much as I would like deflation to bring some prices down, it will be REALLY bad for the economy.

As far as interest-what interest? We are basically just printing more money and giving it out to banks at practically 0% interest.

I meant the interest on the 800 Billion dollars that we will have to borrow for the stimulus package.

Yes, I have heard of hyperinflation. What concerns me is what will happen if bread all of a sudden costs 10.00 a loaf... etc

 

[DVC Sadie]

Unfortunately Alex,
You're crazy. People do that all the time, which may be the root of the problem. Our mind set. Haven't you ever heard of the expressiion "robbing Peter to pay Paul"? People max out their cards and simply open up new ones. People get Home equity loans to pay off cards and then simply run them up again, now the have a helo to pay off plus credit card debt.
Sorry to bust your bubble because it is not on Nancy and Harry, do you remember bailing out AIG, Citigroup, fannie and Freddie, the entire first $700 billion fiasco. Democrats and Republicans alike are playing economist.

Of course it isn't just one side or the other but how much money (that we don't have) are we willing to throw at the problem? How much is enough?

 

[punkin]

I meant the interest on the 800 Billion dollars that we will have to borrow for the stimulus package.

Yes, I have heard of hyperinflation. What concerns me is what will happen if bread all of a sudden costs 10.00 a loaf... etc

As far as I know, the money is not being borrowed really. It is being created out of nothing by the Fed (please someone correct me if I am wrong).

I would be more concerned if all of a sudden that loaf of bread cost $.10 per loaf. That's what happened during the great depression.

 

[Laz]

I meant the interest on the 800 Billion dollars that we will have to borrow for the stimulus package.

Yes, I have heard of hyperinflation. What concerns me is what will happen if bread all of a sudden costs 10.00 a loaf... etc

Get ready boys and gilrs, because massive inflation is exactly what will happen. You can not just crank the printing press and not expect inflation. Their will be too much money chasing too few goods. The FED will be forced to raise interest rates to reign in the money supply. When GDP can not increase fast enough it will become Stagflation, the worst of both worlds.

IMO, the problem is not with the theories, but with democrats and republicans taking them to extremes.

 

[LaraK]

My $.02.....

Get rid of "nice to haves" and concentrate on "have to haves". Now is not the time to fund the National Endowment of the Arts or research on Global Warming. Those items benefit a very few specialized individuals in terms of jobs (not to get into a global warming fight, I'm just talking about employment right now).

Invest in areas where you will drive job growth, infrastructure improvements.

Return proportional tax dollars to the States to assist them in defraying cost of medicaid (NOT for building new things. When a business is in financial trouble the only capital spent is for replacement or revenue generation. It's a nice heart puller to "build schools" but unless the old school is falling apart around your ears, it's a nice to have, not a need to have. Further, I would not approve building new schools if you have excess occupancy in multiple buildings. As unpopular as it is, closing schools that aren't being used is an essential component of older school systems in urban environments ability to become more fiscally responsible).

Look again at the federal payroll. That is NOT somewhere to add jobs. Knowing many federal employees, the efficiency in these agencies is appalling. No company would survive with the waste that occurs daily in governmental agencies. It's unbelievable. Run the government a little more like a business.

Let businesses fail. If you ran it into the ground, it should go down. In a free market economy someone will be there to fill in the void.

My thoughts on the economy.

 

[eliza61]

Of course it isn't just one side or the other but how much money (that we don't have) are we willing to throw at the problem? How much is enough?

hey, you're preaching to the choir here. I was the one who said let them all sink. As a country we all have the mentality of "play now, pay later" from Joe and Jane on main street right up to Congress. I think one of the main problems now is that our whole way of life is built on credit and now it's too late to put the Genie back in the bottle without a whole lot of pain and sacrificing. The two thing we don't do as a country.
So now we have the situation we are in.
1) GDP is at the lowest level it's been at for quite some time.
2) the country's credit worthiness is tanking by the minute. God help us if all the loans to foreign countries actually start getting called in.
3) Unemployment is rising. Any one see the report yesterday on CNN. In many regions it's already in double digits.
4) Businesses can't get credit (because with no federal over sight, the banks have simply taken $350 million dollars and run with it. No explanations) still can't get loans
5) and the supposedly $700 million dollars for TARP has not helped 1 single solitary home owner stay in their house, so foreclosures rates are still creeeping up.

 

[DVC Sadie]

As far as I know, the money is not being borrowed really. It is being created out of nothing by the Fed (please someone correct me if I am wrong).

I would be more concerned if all of a sudden that loaf of bread cost $.10 per loaf. That's what happened during the great depression.

Oh, good point on the cost of bread.

I thought we were counting on foreign countries, like China, to buy our loans? Please correct me if I am misinformed.

 

[eliza61]

Oh, good point on the cost of bread.

I thought we were counting on foreign countries, like China, to buy our loans? Please correct me if I am misinformed.

Well sort of (isn't this a great system where nothing is simple?). We have been depending on china and the EU to lend us money, the problem is what another poster mention. We're running out on credit. Many in China and Europe are pretty ticked off at us because the blame the collaspe of the US economy on the collapse of their economy. China is having it's own problems with massive unemployment. 2ndly the country is starting to look like a bum risk with wall street tanking. I think I've explained that correctly, I'm sure there are smarter bulbs out there that can add (or subtract) to it.