Or, is is because the down side makes them look stupid?

[Ron 10]

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It's called "stimulus".

You are aware that you can't spend your way out of a deficit right?

"No free man shall ever be debarred the use of arms." -- Thomas Jefferson, Thomas Jefferson Papers, 334

[TomAiello 26]

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The GOP seems to be "Obama lite".

I've always thought of Obama as "Bush plus."

-- Tom Aiello

Tom@SnakeRiverBASE.com
SnakeRiverBASE.com

[idrankwhat 0]

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You are correct John but what most people don't understand is that 20-25% (on average) of a cars entire co2 emissions are under the production of the vehicle. Huge amounts of electricity (about 50 percent from coal) are used to make steel and oil is used to make many parts of todays cars. Retiring a car early can actually have a negative impact on the enviroment, not to mention my wallet being used to pay for some one elses new car has a negative impact on me and my financial situation. Also means I will have less cars to fix thus hurting my buisiness. Also sending profits overseas does absolutly nothing for the US.

I see very little good in this bill but then again it was put together by the same people that want government to control us not help us.

[TomAiello 26]

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The idea is that we get back more than we put in.

Are you familiar with the "spending multiplier" concept in economics?

Just a bit. And that's not an understatement.

In short (and oversimplified) form, it goes like this:

When I spend a dollar, the guy I spend it with has an extra dollar. He goes out and spends 50 cents of it. The guy he spent that 50 cents with goes out and spends 25 cents. So, my dollar of spending actually ends up generating $1.75 worth of spending in the economy. That extra 75 cents is the "multiplier." Normally, it's expresses as a percentage, so we can say that the "multiplier" of my spending is 175%--in other words, when I spend a dollar, a buck seventy five actually gets spent in the economy.

The weird thing is that different people's spending has different multiplier rates. That's largely because they spend on different things. Even stranger, government spending appears to have a different multiplier than private spending. And tax cuts (if you think of them as spending) have a different multiplier yet.

The conundrum is this: private spending appears to have the largest multiplier, government spending has a substantially smaller multiplier, and tax cuts have the smallest of all.

The real debate (and this relates back to your point) is whether the multiplier on government spending is actually more or less than 1 (or 100%). Meaning, do we actually get out back more than we put in, or not?

Most of the economists who've examined this have estimated the multiplier on government spending at around .8 (because the government spending crowds out private spending, this reducing the multiplier below 1). Private spending in the US, on the other hand, tends to get measured (remember that we're talking about a ton of different economists doing different studies) at something around 1.5.

And that's the crux of the "stimulus" debate. Do we really get back more than we put in?

According to the Obama economic team, the answer is yes. They've estimated the "stimulus" multiplier at about 1.5 (which has to be overly generous, given that that is about where private spending falls). Other economists have estimated it at less than 1 (more like the traditional government .8).

Who's right? We don't actually know.

There's an interesting article here that goes into some of the numbers, but I'd definitely look around and find other articles--like I said the opinions of various economists (and their numbers) are all over the map.

-- Tom Aiello

Tom@SnakeRiverBASE.com
SnakeRiverBASE.com

[marks2065 0]

So, the people that can afford the new car... Most likely already have it. The people that can't afford a new car are not likely to get rid of one they have so they can now have a car payment. And those that are poor would be ill advised to go deeper in debt....Even if they can get a loan right now.

[idrankwhat 0]

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leave it to the government to miss the boat again. aim a program at the poor to help increase their debt. Isn't that how the subprime mortgage problem started?

This is not a program "aimed at the poor".
Nevermind. Have "fun".

Tom, thanks for the post and the link. I'll check it out.

[Gawain 0]

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Have you even thought of the consequenses?

The only one that I see so far is the bill should have only allowed the credit to be used for domestic made cars. Keep the money in America!!! Support American jobs!

Aren't an awful lot of the "imports" especially the Japanese ones, already built here?

The Toyota Camry and Honda Accord are built in America, with more American content than a Chevy Malibu.

So I try and I scream and I beg and I sigh
Just to prove I'm alive, and it's alright
'Cause tonight there's a way I'll make light of my treacherous life
Make light!

[Andy9o8 2]

So it isn't black-or-white. OK, here's a summary:

Cash For Clunkers is good because:

-it gets gas-guzzling polluters off the road sooner, thereby reducing demand for oil, and benefiting the environment
-it stimulates the auto industry, which in turn has a ripple effect upon the entire economy

It's bad because:

-it takes decently-serviceable and reasonably clean and economical cars off the road prematurely;
- it reduces the available supply (thereby driving up the price) of cheap, older used cars, and available parts to keep them on the road, which hurts lower-income people;
- it hurts non-dealership repair shops, which get most of their business from fixing cars past their manufacturers' warranties.

[lawrocket 3]

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In one week, one simple, relatively inexpensive program

$1 billion is a lot of money. A thousand "relatively inexpensive" programs is a $trillion.

Don't we all love paying twice as much for something as market value?

[Reply]not only reduces fuel demand, reduces foreign oil demand and boosts the economy

[rushmc 23]

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Why does it bother you that 23,000 inefficient, polluting vehicles have been taken out of service in less than a month?

Well, given they're being replaced at a cost of a billion dollars to buy nearly as inefficient, polluting vehicles, I have a huge problem with it.

there's no reason, aside from propping up Chrysler, to give people 4500$ for a 4mpg increase in efficiency. And given the price of these vehicles, it would seem to be giving cheaper cars to people who don't need it so much.

If this were about pollution or gas use, it should have been trading in cars getting 30.

Got nothing to do with proping up the car manufactures until, one looks at how the Unions make out

"America will never be destroyed from the outside,
if we falter and lose our freedoms,
it will be because we destroyed ourselves."
Abraham Lincoln

[rushmc 23]

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Not true.

You are missing where he said it was "being unfair to the poor".

If I had a clunker I could use the program since I have the cash to buy a new car.... If you are poor, you don't have that cash and would trade in your old (most likely paid off) car and trade it in for a new car that comes with new car payments.

So, the people that can afford the new car... Most likely already have it. The people that can't afford a new car are not likely to get rid of one they have so they can now have a car payment. And those that are poor would be ill advised to go deeper in debt....Even if they can get a loan right now.

Then, if the car they currently have dies, the cost of the next "clunker" has risen because of this program

"America will never be destroyed from the outside,
if we falter and lose our freedoms,
it will be because we destroyed ourselves."
Abraham Lincoln

[Ron 10]

Pretty good summary.

The issue is:

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-it gets gas-guzzling polluters off the road sooner, thereby reducing demand for oil, and benefiting the environment

It only gets them off the road if the person can afford to buy a new car... It is a great deal if you are in the market for a new car and can afford it.

However, it gets people who should not be buying a new car to take on a car loan. That is not really a good thing.

What happens if these people can't afford them, a car crisis like the housing one?

"No free man shall ever be debarred the use of arms." -- Thomas Jefferson, Thomas Jefferson Papers, 334

[TomAiello 26]

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What happens if these people can't afford them, a car crisis like the housing one?

Worse, because just holding the cars and hoping for a climb in value is not a viable strategy.

Hey, pushing people to be financially irresponsible got us here--surely more of the same will help now, right?

-- Tom Aiello

Tom@SnakeRiverBASE.com
SnakeRiverBASE.com

[idrankwhat 0]

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In one week, one simple, relatively inexpensive program

$1 billion is a lot of money. A thousand "relatively inexpensive" programs is a $trillion.

$7.8 billion more and we'll equal the amount of CASH that we simply "lost" in Iraq. At least we're getting something positive for our "investment" this time.





Sorry, I'm in a shitty mood today and won't be able to contribute more than this.

[Ron 10]

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Worse, because just holding the cars and hoping for a climb in value is not a viable strategy.

Very true.... I was thinking more inline with buying something you can't afford that goes down in value.

Yes, this program is worse in the fact that the asset will not increase in value (rare exceptions) by design.

I think that getting people to get rid of a running paid for car to buy a new car with payments is not exactly the smartest financial move.

"No free man shall ever be debarred the use of arms." -- Thomas Jefferson, Thomas Jefferson Papers, 334

[TomAiello 26]

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... not exactly the smartest financial move.

To be fair, have you seen how the government handles it's own finances?

In DC, this is the height of fiscal responsibility.

-- Tom Aiello

Tom@SnakeRiverBASE.com
SnakeRiverBASE.com

[TomAiello 26]

Good CNN editorial on this subject here.

-- Tom Aiello

Tom@SnakeRiverBASE.com
SnakeRiverBASE.com

[kallend 2,027]

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Good CNN editorial on this subject here.

He argues for higher taxes and tolls in one paragraph, and lower taxes in another paragraph.

CforC has taken a small fraction of 1% of the money spent on bailing out Wall St. bankers.

...

The only sure way to survive a canopy collision is not to have one.

[chasteh 0]

>What I dont understand is what you have against those of very low incomes.......

"Someone, but not the government, or really myself, save the poor people!"

[chasteh 0]

>Because of the increase in debt associated with spending the money to buy them at well above market prices?

You are consistent here. However, if it were necessary for there to be stimulus spending (some here say this) then it is far more justifiable to do so with a $4 billion dollar stimulus as opposed to a two trillion dollar stimulus to mega corporations.

>Or, are you not worried about debt, John?

Considering the government already spends $600 billion on national defense, I would happily take this out of that money. Well... actually it kind of already is considering the G.E. plant here just shut down, meaning the hundreds of F-35 fighters that were going to be produced no longer will. Looks like Lockheed is fucked too. You are still consistent in your objection here, but I think it is a wasted effort compared to other stimulus funds you don't like.

>Or perhaps you only worry about debt incurred to support programs you don't like?

That sounds a lot like something you could say to modern Republicans, too. (I know you would)
Actually, given that you do support at least a few government programs, like bridge construction and maintenance, you also would support some government stimulus programs. Wait, wasn't that the initial purpose of the stimulus package? To rebuild and maintain infrastructure (including bridges elevated over 500 feet?)

[rushmc 23]

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>What I dont understand is what you have against those of very low incomes.......

"Someone, but not the government, or really myself, save the poor people!"

Exactly and now the gov makes it harder to help them with this stupid worthless debt increasing program.

Thanks for your help

"America will never be destroyed from the outside,
if we falter and lose our freedoms,
it will be because we destroyed ourselves."
Abraham Lincoln

[rushmc 23]

Quote

>Because of the increase in debt associated with spending the money to buy them at well above market prices?

You are consistent here. However, if it were necessary for there to be stimulus spending (some here say this) then it is far more justifiable to do so with a $4 billion dollar stimulus as opposed to a two trillion dollar stimulus to mega corporations.

>Or, are you not worried about debt, John?

Considering the government already spends $600 billion on national defense, I would happily take this out of that money. Well... actually it kind of already is considering the G.E. plant here just shut down, meaning the hundreds of F-35 fighters that were going to be produced no longer will. Looks like Lockheed is fucked too. You are still consistent in your objection here, but I think it is a wasted effort compared to other stimulus funds you don't like.

>Or perhaps you only worry about debt incurred to support programs you don't like?

That sounds a lot like something you could say to modern Republicans, too. (I know you would)
Actually, given that you do support at least a few government programs, like bridge construction and maintenance, you also would support some government stimulus programs. Wait, wasn't that the initial purpose of the stimulus package? To rebuild and maintain infrastructure (including bridges elevated over 500 feet?)

You are correct in your assesment of where the monies were to go and what is was supposed to accomplish. Now we are learning this money is going to help Obama supporter groups like ACORN

"America will never be destroyed from the outside,
if we falter and lose our freedoms,
it will be because we destroyed ourselves."
Abraham Lincoln

[kallend 2,027]

Quote

Quote

>Because of the increase in debt associated with spending the money to buy them at well above market prices?

You are consistent here. However, if it were necessary for there to be stimulus spending (some here say this) then it is far more justifiable to do so with a $4 billion dollar stimulus as opposed to a two trillion dollar stimulus to mega corporations.

>Or, are you not worried about debt, John?

Considering the government already spends $600 billion on national defense, I would happily take this out of that money. Well... actually it kind of already is considering the G.E. plant here just shut down, meaning the hundreds of F-35 fighters that were going to be produced no longer will. Looks like Lockheed is fucked too. You are still consistent in your objection here, but I think it is a wasted effort compared to other stimulus funds you don't like.

>Or perhaps you only worry about debt incurred to support programs you don't like?

That sounds a lot like something you could say to modern Republicans, too. (I know you would)
Actually, given that you do support at least a few government programs, like bridge construction and maintenance, you also would support some government stimulus programs. Wait, wasn't that the initial purpose of the stimulus package? To rebuild and maintain infrastructure (including bridges elevated over 500 feet?)

You are correct in your assesment of where the monies were to go and what is was supposed to accomplish. Now we are learning this money is going to help Obama supporter groups like ACORN

Pikers! They will get nothing like as much as Paulson sent to support Republican supporter groups like Wall Street bankers and AIG execs.

...

The only sure way to survive a canopy collision is not to have one.

[rushmc 23]

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Quote

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>Because of the increase in debt associated with spending the money to buy them at well above market prices?

You are consistent here. However, if it were necessary for there to be stimulus spending (some here say this) then it is far more justifiable to do so with a $4 billion dollar stimulus as opposed to a two trillion dollar stimulus to mega corporations.

>Or, are you not worried about debt, John?

Considering the government already spends $600 billion on national defense, I would happily take this out of that money. Well... actually it kind of already is considering the G.E. plant here just shut down, meaning the hundreds of F-35 fighters that were going to be produced no longer will. Looks like Lockheed is fucked too. You are still consistent in your objection here, but I think it is a wasted effort compared to other stimulus funds you don't like.

>Or perhaps you only worry about debt incurred to support programs you don't like?

That sounds a lot like something you could say to modern Republicans, too. (I know you would)
Actually, given that you do support at least a few government programs, like bridge construction and maintenance, you also would support some government stimulus programs. Wait, wasn't that the initial purpose of the stimulus package? To rebuild and maintain infrastructure (including bridges elevated over 500 feet?)

You are correct in your assesment of where the monies were to go and what is was supposed to accomplish. Now we are learning this money is going to help Obama supporter groups like ACORN

Pikers! They will get nothing like as much as Paulson sent to support Republican supporter groups like Wall Street bankers and AIG execs.

Then all is ok then in your plastic inflatable world

"America will never be destroyed from the outside,
if we falter and lose our freedoms,
it will be because we destroyed ourselves."
Abraham Lincoln

[kallend 2,027]

Quote

Quote

Quote

You are correct in your assesment of where the monies were to go and what is was supposed to accomplish. Now we are learning this money is going to help Obama supporter groups like ACORN

Pikers! They will get nothing like as much as Paulson sent to support Republican supporter groups like Wall Street bankers and AIG execs.

Then all is ok then in your plastic inflatable world

Au contraire. A mountain of debt is not a firm foundation on which to build a sound economy. But keep things in perspective; any money spent on clunkers or community groups is peanuts compared with the money sent to bail out Wall St., and those guys, whose recklessness led to the worst recession in generations, are still paying themselves bonuses bigger than you or I can expect to make in a lifetime.

...

The only sure way to survive a canopy collision is not to have one.