An Economic Approach that Worked

[YardleyLabs]

Yea, I remember Obama's "tax relief". It amounted to about 13 dollars a week. Dumbest thing I ever heard of. Like giving workers and extra couple of bucks a week is going to stimulate anything. At least Bush was smart enough to pass out the HUGE tax relief to the middle class (600 dollars) in one check!
Here's the deal. Obama, and Bush prior to him, passed economic stimulus packages that failed. Why? Instead of getting the money into projects that would stimulate jobs and create demand from workers (consumers with money to spend), most of the "relief" went to wall street and state governments. The result is pretty simple. Most of it is still sitting there. Waiting to be invested. I agree with Buzz. The Germans Plan resembled an FDR or even Clinton stimulus. It actually created some demand by keeping consumers consuming, spent government money on much needed investments in energy and new industry development.

All that said, i still think the root of America's job losses is not economic cycles. It is a result of failing trade and tax policies. The middle class is taxed to much. The corporations don't pay squat for exporting their jobs and importing their products. And the Top half a percent don't pay enough.
Very few politicians are talking about remedies that might actually fix these problems. Certainly no one in leadership positions of either part.

Interestingly, the cut was stupid politically but very smart economics. Because the cut was only a small amount in each pay check, almost every dollar went to immediate consumption rather than to savings. Lump sum cuts, by contrast, have tended to be used to pay down debt (savings) rather than for consumption and have not produced any significant economic benefits.

[david gibson]

Interestingly, the cut was stupid politically but very smart economics. Because the cut was only a small amount in each pay check, almost every dollar went to immediate consumption rather than to savings. Lump sum cuts, by contrast, have tended to be used to pay down debt (savings) rather than for consumption and have not produced any significant economic benefits.

so marlboro and keystone light stock went bonkers, right???? for middle class folks the money just buffered the budget a tad, the only ones who went nuts and spent the $13 on the open market were, well, i think you get it.....