Archive for the ‘stimulus’ Tag

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Fareed Zakaria (CNN):

But, first, here’s my take. The great American housing market is back. The Case-Shiller housing index showed its largest annual increase in prices in seven years.

So, despite dysfunction in Washington, despite the sequester, the American economy, once again, shows its core character: flexibility and resilience.

A housing revival was inevitable at some point. The United States is the only rich country in the world whose population is growing. We add 3 million people to our numbers every year, thanks largely to legal immigration.

That means, over time, we will need new housing unless kids want to live with their parents forever.

Consumer confidence has hit a five-year high and not without reason. Americans have been paying off their debts at a steady clip since the financial crisis.

The U.S. economy is susceptible to bubbles and manias, but it also has the flexibility to adjust. American people and companies change past practices, take pain and prepare for the future.

When you compare American companies since 2007 with, say, Japan’s great corporations after that country’s crisis and recession, it’s clear that U.S. corporations are pretty ruthless in restoring productivity even at the cost of firing people.

And they are nimbler, which means that they often come through a crisis stronger and faster. From automobiles to airlines to energy, companies are posting strong sales and profits.

American banks have been under fire from many quarters. Critics feel they should have been punished or broken up or more tightly regulated.

But if you compare them with their principal competitors in Europe, they are far better capitalized, more secure with stronger balance sheets. As home prices recover, that should create a virtuous cycle between credit and housing that will enhance both stability and growth.

The American private sector, individuals and firms, can take credit for the good news this week. But so can Washington. Looking back, it’s now clear that Washington handled the 2008 financial crisis extremely well.

It acted quickly and with massive firepower rescuing overextended banks, enacting a large stimulus, saving, but restructuring two automobile giants.

Perhaps above all, we should thank the Federal Reserve for a bold strategy of flooding the markets with liquidity, lower rates and keep it up while the economy was depressed. Compare that with Europe’s response or Japan’s, after its crash, and you see the differences.

Many problems remain, chiefly, high and persistent unemployment and stagnant wages. For the next generation of growth, we must focus on training and retraining workers, break the immigration deadlock, build out our infrastructure, invest in science and technology.

And to pay for these, we’ll need reforms that will make our entitlement programs affordable as we age. Now, if Washington could just do a few of these things, imagine what the American economy might look like then.

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Ezra Klein “Democrats do want to raise taxes on families making more than $250,000. You sometimes hear Democrats say they just want to “restore the Clinton-era rates” for these folks, but that’s misleading. In addition to letting the Bush tax cuts expire, the White House wants to add about $700 billion in further tax increases on these taxpayers. And that’s in addition to the high-income taxes passed in the health-care law. Under Obama’s plan, taxes on the richest Americans would be much higher than under the Clinton tax code.

So yes, Democrats want to raise some taxes. But so do Republicans. They want to let the payroll tax cut and the various stimulus tax credits (notably the expansion of the Earned Income Tax Credit and the Child Tax Credit) expire. Those are the tax cuts that primarily help poor and middle-class Americans. In fact, 87.8 percent of the payroll tax cut’s benefits go to taxpayers making less than $200,000 and 99.9 percent of the stimulus tax credits’ benefits go to taxpayers making less than $200,000.

And those tax cuts help many, many Americans. Pretty much everyone who works benefits from the payroll tax cut. Pretty much everyone who works in a low-wage job benefits from the stimulus credits. Whereas the tax cuts for income over $250,000 help about 4 percent of taxpayers, these cuts and credits help almost every taxpayer. Letting them expire will thus raise taxes on many, many more people than letting the high-income Bush tax cuts expire.

(It’s worth noting here that support for the payroll tax cut isn’t universal among congressional Democrats. Some worry that it appears to undermine Social Security’s finances, even though the law says that the revenue removed from Social Security will be replaced by revenue from the general fund. These Democrats would happily sign onto a replacement for the payroll tax cut, but Republicans haven’t been open to that, either.)

Republicans argue that these policies weren’t really tax cuts, that they were temporary stimulus measures designed to be tax cuts. And it’s true that their primary purpose was stimulus. But the Bush tax cuts were also designed to be temporary and they were sold as stimulus once the 2001 recession began. “By ensuring that Americans have more to spend, to save, and to invest, this legislation is adding fuel to an economic recovery,” President Bush said in 2003, upon signing the second set of his tax cuts.”

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Mitt Romney is advancing a new — mostly ahistorical — reason voters should throw President Obama out of office: A Democratic Congress gave Obama everything he wanted and he still failed to turn the economy around.

“I do believe that people of this country are looking for someone who can get the country growing again with more jobs and more take-home pay, and I think they realize this president had four years to do that,” Romney told Politico in an interview published Monday. “He got every piece of legislation he wanted passed, and it didn’t work. I think they want someone who has a different record, and I do.”

The argument obscures the important policy-making role Republicans had in the first two years of Obama’s presidency, when they used a record number of filibusters in the Senate to weaken — and in some cases thwart — large pieces of his agenda.

The $787 billion stimulus package in 2009, which was ultimately too small to fully reverse the economic downturn, had to be scaled down because a GOP filibuster required Democrats to win over 60 Senate votes for final passage. Repeated filibusters on health care reform ate up nearly a year of the Democrats’ legislative time, and Obama’s subsequent efforts to boost the economy were met with the same wall of Republican opposition — one that became insurmountable after the GOP’s congressional victories in 2010.

Posted August 28, 2012 by tmusicfan in Politics, Quote of the Day

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Paul Ryan:

“What we’re trying to accomplish today with the passage of this third stimulus package is to create jobs and help the unemployed,” Ryan said in video that aired today on Up w/ Chris Hayes. The remarks came during a House debate on the measure on Feb. 14, 2002.

Ryan also argued in 2002 for helping workers pay for their health insurance and extending unemployment benefits. Since Obama has been in office, Ryan has voted against extending unemployment insurance.

“It’s more than just giving someone an unemployment check,” Ryan said of the Bush stimulus bill. “It’s also helping those people with their health insurance while they’ve lost their jobs and more important than just that unemployment check, it’s to do what we can to give people a paycheck.”

Ryan called such measures “time-tested, proven, bipartisan solutions to get businesses to stop laying off people, to hire people back, and to help those people who have lost their jobs,” and urged congressional Democrats to break ranks and join Republicans in supporting the president’s plan.

“I’ve just recently read in our local Capitol Hill newspaper that members from the majority party in the other body want stimulus. They’re breaking with their party leadership and asking for stimulus legislation to pass because in their home states they have a lot of people who are losing their jobs,” Ryan said. “I urge members to drop the demagoguery and to pass this bill to help us work together to get the American people back to work and help those people who’ve lost their jobs.”

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FAREED ZAKARIA, CNN HOST  “We’re now in the general election campaign in the United States, the point at which the candidates are meant to pivot from the primary voters to the general election voters, most of who now are registered Independents.

But this isn’t really happening. The Obama campaign started with its attack ads about Bain Capital, which presented a simplistic picture of a complicated reality. Although some private-equity firms have engaged in some bad practices, on the whole the industry has grown so large because it performs a useful function.

Then came Mitt Romney’s first major ad which told us that on his first day in office, he would introduce tax cuts. Now, the one idea that is almost certain not to jump-start this economy is a tax cut. After all, that’s what we’ve been doing for the past three years. For those who think President Obama’s policies have done little to produce growth, keep in mind that the single largest piece of his policies, in dollar terms, has been tax cuts. It actually began before Obama, with the tax cut passed under the George W. Bush administration in response to the financial crisis in 2008.

Then came the stimulus bill, of which tax cuts were the largest chunk by far, one-third of the total. Then, the payroll tax cut, the small business tax cut, the extension of the payroll tax cut, and so on.

The president’s Twitter feed boasted that, “President Obama has signed 21 tax cuts to support middle class families.” And how has that worked out? The “Wall Street Journal” explained this away saying that the problem is all these tax cuts are temporary. If only we had across-the-board cuts in rates, except that these were tried as well.

The 2001 Bush tax cuts were designed precisely along those lines. They were, in dollar terms, the largest tax cuts in U.S. history. And the economy got worse, not better. In fact, the years 2000 to 2007 were the period of weakest job growth in the United States since the Great Depression.

Now, look, tax cuts can stimulate growth, especially when you go from say 70 percent rates to 30 percent rates as Ronald Reagan did, but a cut of a few percent from a reasonably moderate base or a temporary waiver of some small tax provisions, is highly unlikely to unleash lasting growth.”


Posted June 18, 2012 by tmusicfan in Politics, Quote of the Day

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Romney speaking about Obama “Instead, he wants to add more to government.  He wants another stimulus, he wants to hire more government workers.  He says we need more firemen, more policemen, more teachers.  Did he not get the message of Wisconsin?”