Political Discussions
Stimulus Package Math
Posted by Oahupet • 2/06/09 • Subscribe to this Discussion [RSS] • Report This Topic
Topics: stimulus
Can someone check my math?
Do to realize at $80 billion and with our population at 304 million (rounded up), everyone could have over $260,000.
Geez, people could start spending again. Hell fed, state and local business would make money again. People would start hiring again... Etc?!?
Why not? I'd be happy
User Comments
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math Fail.... do over.
and it's 800 billion+... not 80
Make it easy on yourself.. 900 billion (which is still low considering interest etc. and 300 million
comes to 3000... -
Yeah, damn. My calculator had some setting on it. Messing with me. I can still dream
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Large numbers on calculators are always messing me up too. get past 9 million, and it just gets too damn messy.
My trick.. line up the numbers.. and eliminate an equal amount of zeros from both before you do the division..
that makes it
9000/3.. not so hard anymore.
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Oahupet's math error is a good example of why people have trouble getting their minds around the dollar amount of the Economic Recovery Act. People have a hard time understanding what 11 zeros mean, but it really doesn't amount to too much when you divide it by the 8 zeros that represent the population of the United States. All that's left is 3 zeros as part of a smallish four-digit number. Even when we do this math, grasping the numbers at the gut level doesn't work like the everyday math we do for our groceries, phone bill, or whatever. We know what a 100 looks like, because we can count a 100 pennies and either look at them for real or see them in our mind's eye. Multiply by 10, however, and our brains seem to start short-circuiting.-
I've noticed that myself, Mark.
Many, many people have stated that the money should just be evenly divvied up to stimulate the economy, not realizing that when divided in that way, it will only "stimulate" us for about a month. Maybe two, if you're good with a budget, have little debt, or more than two people living together and pooling the money.
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It still isn't a good idea to spend over 200k to create one job... which is what he is talking about.
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Seeing as the stimulus package is divvied up in various ways to address more issues than just job creation - I would say that finding the exact number to create one job would be a lot harder than simply dividing the total by the populace.
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Not for the all-seeing and all-knowing, Anok.
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didn't divide it by the populace, divvied it by how many jobs he claims it will create.
I thought you were against it?-
Right but not all of the money will be going strictly to job creation.
That means your numbers are skewed.
And I am against the corporate bailout - I support the economic stimulus package.
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Obama has some of the best economic minds giving him advice, and since csi disagrees with it and he is always wrong, that provides additional support that the bill is the way to go.-
Yes that is your standard argument. Obama, his advisors, and the Democrats in general were also for the Bailout, which i think you mentioned not to long ago was a disaster.
Going by Obama and his advisors track record so far. I'm a damn genious. -
Nope, you're wrong again. That was a political move as much as anything, and Paulson didn't do what he said he was going to do with the money.
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He did exactly what he was allowed to do. and the dems voted it through without any control on it.
And.. OBAMA WAS FOR IT! -
Somehow I think former President Bush felt the same way, till they started pointing fingers. If the mass tells you what they think you should know, it makes decisions quite one sided. Don't you think?
(As far as having great minds helping out)
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The problem with CSI's math about how much one job costs (and with the GOP's rhetoric), is that he assumes that economic recovery is only about short-term job creation, aka stimulus. It isn't. It is about making the economy work better over the long term too. See the article in the OP of the following thread: www.blogcatalog.com/politics/discuss/entry/not-stimulus-rather-economic-rec...
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No it's about how long it will take one job to pay back what it costs to create it.
But don't mind me.. i just do this for a living. lol
I keep forgetting that "independent" programmers and unemployed history professors know everything best.. -
You legislate for a living? Huh. And here's me thinking you didn't yet have the right to vote in the US.
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All good points and I agree my math sucks.
But I believe for any stimulus to work they need to crack down on our financial structure. The amount of interest on credit cards, loans, related fees, packages to help people in making payments instead of filing for backruptcy or becoming foreclosed. They need to be more responsible with their partnership with the people they help through credit. After all they offered the credit and I cannot put full blame on the people trying to make a living.
I know that there are programs to help with this, but many of these are rip offs and help you get further in debt.
Left without this leash, we will end up back where we started.-
They could start by removing the laws that forced banks to lend to people that couldn't afford it to begin with...
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Erik that law is good and solid - it's the banks, and realtors greed that forced them to lend out more than people could afford.
Had they kept a reasonable limit or variant on housing prices - instead of artificially inflating prices - they would have met their criteria with no problem.
The banks, and realitors took a gamble - they made a lot of short term gain, and then it exploded in their faces. -
It had good intent, but it didn't work.. obviously. Did you notice what happened when the housing market started declining?
Even before unemployment added to the mis, it wasn't those with solid 700+ scores that lost their homes..
The artificial inflation of prices came from flooding the market with buyers who all of a sudden "qualified"...
Interesting that you say "over a ten year span" guess how old that law is.. -
That law was instituted much longer than ten years ago
The problem that occurred is that the housing market inflated - artificially. There was absolutely no reason for home prices to jump from between $90k - $200k up to $300k-$600k or higher in my area. (The average jump being from $100k up to $400k for the same house)
There was no employment boom, no wage increases, no major developments.
It was pure, unadulterated greed. And it priced many, many people right out of the market. Some of the banks were required to abide by federal lending regulations stipulating that a small percentage of loans had to go towards smaller purchases, or lower income families. That means that they need to make small loans available. Not large loans to low income or start up businesses - small loans.
But they couldn't because they fluffed the market up to gain a buck.
Other banks in the area (local news) intentionally bamboozled very low income earners by intentionally forging their applications, and telling them they could get a large loan in a price range they could handle. As the cases have unfolded in court, they did this for the precise purpose of making a boat load in interest for as long as they could, and then taking the house back, and auctioning it off so they could double their profits.
They were running a scam, and these were banks who were not required to lend under federal regulations.
Pure. Greed.
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Well with the blow up in the housing market prices, they would need to cap that as well. (By area). Prices more than doubled where I live before the collapse which is completely ridiculus. How many families do they want staying in the home for 30 years?
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Housing prices here quadrupled.
Over a ten year span. But wages remained stagnate. *shakes head* that's just greed, and that's what got them into trouble.
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Folks we have just been had by our government! They have taken us hostage to the sum of 800+ BILLION dollars!-
Should we assume you didn't read the math at the top of this thread? That's less than $3,000 per person, and it isn't all that big as a percentage of GDP. And how "had by our government"? The money is going to invest in the country's future and to put people back to work, and those people will then have money to spend, etc., etc., etc. Of course, we could all just move into caves and be very, very afraid, but that hardly seems like a recipe for ending the recession and restoring conditions for individuals to prosper.
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"percentage of GDP" What a BS comparison.
As if that makes any major difference. It is 800 billion, With just interest, that comes to over 1 trillion in just the first year.
Now, if you wonder how much a Trillion really is. Consider this.
The entire US armed forces and department of defense, runs on about 160 billion a year (2008)
The entire department of Education... 14 billion per year (2008)
Total Dept Of Health and Human Services ... 167 Billion..
Department of Labor ... 11 billion (2008)
So as you can see.. you could run all these departments and not even get close..
So, take a wild stab at how much the TOTAL expenditure for the US government, everything from running the whitehouse, all law enforcement agencies.. everything was in 2008..
713 Billion..
Now, do more than double that... (the old spending still has to occur. so now we have 713billion + 800 billion + interest. That comes to a grand total of... A shitload of money. To be about as accurate as your "percentage of GDP"
A pretty serious amount of money for the government to be spending. Especially since its at best a wing and a prayer that it will work.
It won't work, and it will be all but impossible to pay it back.
I hope you enjoy working in sweatshops for rich nations. We'll be exporting labor to india before Obama is done with this. -
Percentage of GDP is never a false comparrison. It is a key way of measuring a country's ability to repay the amount in question. Of course, the repayment also depends on the federal government's fiscal policy, but the limits of what policy can achieve is influenced by GDP.
If economics isn't your thing, how about a business analogy? Your argument is akin to saying that there is no relationship between a company's income and its ability to meet its expenses or borrow and repay loans. -
Mark,
Yes there is. Just like there is a relationship between your income and ability to pay loans. But to look at it in comparison to plain GDP without taking into consideration sequestration vs. Foreign held, en foreign held sequestred, (leaky) loans.
But there isn't a direct relationship, Debt/GDP are not alone in the equation. Just like debt/income isn't in your own economy either.
For instance current debt levels are important. (As you mention Fiscal policy). And when running with a budget deficit, your ability to pay has all but nothing to do with your GDP. It has to do with your surplus/deficit. (Barring the sequestered loan, but we'll get back to that.)
You can't pay more than you have. So you either cut spending, or raise taxes. And trust me. It won’t be enough to raise them on just the wealthy to pay off this little bundle. Increasing spending won't work in the long run, because the payoff is too little to late. It won't cover the interest of the loan.
Then of course you have the additional problems of the future implicit debt that is about to hit full force. Which will skyrocket the deficit. Albeit most of it publicly held. So as bad as that is, its really not the main problem.
Every Politician, Democrat and Republican Alike that is doing this, is serving one primary interest. Their own interest to get re-elected. It would have been much better to have a president, any president in his second term today. one that has no chance of getting re-elected.
Try to remember this. In 2000, Clinton had a budget surplus of 230 billion. That doesn't even cover HALF of the interest alone on the deficit of 2008. And because of the lack of sequestration powers we are facing, the income generated by the spending, has to immediately outperform about 50 billion in increased trade balance. That is ON TOP of what we have lost in GDP to date. Remember that we have 400+ billion in debt interest that has to be paid. out of which about 26-28% is foreign held. So that comes out at about 100 billion p.a. Plus the new 50 billion p.a. in interest alone.
We can't spend our way out of this, cutting spending is the only way to get the government on track, and cutting costs for businesses will be the only way to stay competitive.
Jobs have to be created dynamically, not artificially by printing money. When you do that, you'll be right back where you were as soon as you turn off the presses.
To get out of this, is not about cutting taxes on some billionaires. Although investment ready capital will be better than printing new money.
It will be about easing all expenses that affect businesses. Not by implementing policies that will protect workers but cost companies more to just stay in business. Like any other equation, there has to be a balance.
If they don't you'll be hearing, "how great that Obama forced companies to pay healthcare.. Wish i had a job so i could get some of it. "
Iceland is a great example, as a small country, reliant on foreign trade with primarily ind. nations, they react much quicker. To Global economic events.
Their unemployment is today more than 400% of what it was a year ago.
Our unemployment was a year ago... 4.6% today 7.6%. not even 100% If we look at iceland as a template, we could see 18 - 19% before the next election.
The Keynesian approach worked at some extent in the 30's, But debt to GDP it also went from something like 16% in '29 to around 45% in 1940.
Our Current debt to GDP is over 70% (i think 74%).. want to triple it?
The real problem with increasing the debt now, is that we can't accomplish this with mere debt sequestration. The debt we occur now, will be "real" debt payable to someone down the line. And that is going to seriously hurt. We have already diminished the available tools for sequestered keynesian economics, flooding the market with fresh pressed bills.. And it isn't working.
The total debt is about 10 Trillion, out of which about 3 trillion is foreign held, since we are more than likely forced to raise this new trillion through non-sequestered funds, that means that although it makes up 10% of our current debt, it actually grows our foreign debt with 33%.
Spending right now, especially borrowed money. Is about the last thing we should be doing, unless of course you are catering to the ones that don't know this (about 99% of the voting population) that would be the same bunch that want to see the government DO SOMETHING... ANYTHING... And the ones that will vote for who looked like they were doing something. Not the ones doing the right thing. -
So now all of a sudden the debt is important. Where were you when Bush was doubling the U.S. debt? Now IS the time for government spending to stop the free-fall.
It will be about easing all expenses that affect businesses. Not by implementing policies that will protect workers but cost companies more to just stay in business. Like any other equation, there has to be a balance.
When are you going to realize that supply side economics don't work? -
Oh sati,
We've heard your same argument for 5 months+ now.
I am not about supply side economics, if you read the entire thing you posted.. Yes ALL THREE LINES (i know thats a lot for you). You'll see I advocate balancing BOTH SIDES Of the equation.
Please, your Econ 101 from 1982 isn't enough anymore. Don't pretend it is. Go doodle or something. -
I'm with Keynes on this one, and not the attempts of Republicans to rewrite reality to favor more of its failed policies. Still, maybe there is a way to harness the GOP's hot air and use it as an alternative source of energy.
One other thing: no one knows how much is needed, but no one seriously disputes the need for stimulus and economic restructuring---no one except some Luddites, who apparently are taking their cue from ostriches. What to do in the worst economic situation in a couple generations? Why stick our heads in the sand, of course, and demand bonuses from the taxpayers for the CEOs who helped to create this mess. -
Well like i said, you risk running the Debt to something like 300-400% of gdp with that approach.
In conjunction with a decrese of the production, thus income, you are not looking at a very strong position.
Edited to add:
You asked in another thread what hyperinflation had to do with anything. Do you see it now? -
I suppose the country's fiscal situation would improve if we drove unemployment higher and GDP lower? That's what you're advocating. And don't get me started on social and political stability all around the world.
Edited to add: No, the hyperinflation just does not fit here. You can talk till you're blue in the face and it won't make it real. Seriously, I would rather listen to someone with a clue, like Robert Reich. -
Still, maybe there is a way to harness the GOP's hot air and use it as an alternative source of energy.
There does seem to be an endless supply of it. -
I don't know. Sometimes its better to watch the fall, then join it. (and add to it)
After all letting all the big business's fail will only bring the housing market affordable again (already happening). Financial institutions will learn to be more strict on their standards. (Some already have, although it looks like the big 3 car companies have failed on this)
Outrageous union wages, ceo wages, state and federal wages, all the included bonus's will fall to a more reasonable level.
Don't get me wrong, I know a lot of people will be in hell for a while. But the curve on living that's been thrown out of loop by this greed we all have witnessed and are paying for, will drop to more a affordable lifestyle. Especially for the average person paying for it right now. -
I wanted to add, every year I've seen and/or heard people mention 'the end of the world is now'. Every year it hasn't happened. I hope we're not (the President included) listening to those people.
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You are amazing mark..
You claim to listen to RObert Reich?
robertreich.blogspot.com/2008/09/bailout-of-all-bailouts-is-bad-idea.html
He wasn't for it.. Why were you? -
Last time I checked, this thread was about the economic recovery act, not an old bailout proposal. You cite a piece from Sept. 2008. I'm talking about his recent responses on NPR to the current economic recovery legislation.
Yeah, context matters, at least to me it does. -
I'm sorry, isn't stimulus a sweetened word for bailout. After all aren't we trying to bailout the economy from this financial crisis we are getting deeper in.
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No. Bailout refers to targeting companies in trouble that are too important to fail. TIll now it's been the financial sector with TARP, though Detroit got some money too. Stimulus refers to efforts to create jobs in the economy at large through a variety of government spending projects. The simulus is part of the larger economic recovery act currently under consideration. Besides stimulating the economy right now, the bill is designed to create investments that will place the economy on a sounder footing in the future.
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Time to revise down the figure. It has just been passed at 780 million after concessions.-
That's for the Senate. We'll have to see what happens in conference, that is, when the House and Senate try to reconcile their different versions.
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I'm all for a stimulus, if that's what it is and it comes with tighter reins to keep us from getting back in this financial mess. But somehow I feel it's turning into something else.
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I should ask this question instead, how is a Stimulus going to help the person NOT working for the overpaid State, Federal, or related contracted company.
If the stimulus lets them keep their jobs, what about the rest? Do they just get a $500 thank you for keeping their jobs and better unemployment benefits?
Does it help even the curve between the two? Or will they continue to overpay one and increase the gap between non-union and union/state/fed?-
Most of the jobs created through the stimulus will be private sector jobs. The money goes for roads, bridges, schools, health, alternative energies, etc., etc. Government employees don't do all that. The private sector does.
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I don't think anyone knows for sure. The general idea is that if some people and companies have money that somehow will trickle through the economy to benefit everyone but the truth is no one can really know for sure. But doing nothing is not an option too. Giving money to everyone doesn't seem like a good idea. But a debate is absolutely necessary. Not a negative debilitating argument but positive constructive criticism that will help distill the truth from the contaminants.
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