Even the Cbo Now Has a Change of Mind.

The first paragraph says what many have thought for some time now ... "... he stimulus package will have a negative long-term effect on the economy."




Impact of the Stimulus Package

Point of View | 3/10/2009 | Kerby Anderson


Impact of the Stimulus Package by Kerby Anderson

Many Americans do not believe that the recently passed stimulus package is going to turn around our sagging economy. But what do the experts think? Last week the Congressional Budget Office issued their report. Essentially they agreed with many Americans. The CBO believes the stimulus package will have a negative long-term effect on the economy.

This is a surprising conclusion given the fact that the CBO is run by the Democrats. Democrats selected the current CBO director. The Democratic leadership in Congress could get rid of him if they wanted.

It is important to note that the CBO does say that there will be a "positive near-term effect" over the next few years as GDP rises. And the report tries to help the stimulus package by saying that there could be a constructive long-term impact if "it permanently changes incentives to work and save." But, alas, the report also acknowledges that the legislation does not do that.

Proponents of the stimulus package have argued that investment in green jobs and the infrastructure will stimulate the economy; however, the CBO report points out that the debt burden created by the bill will actually drag the economy down. And tax hikes to small businesses merely increase the cost of staying in business. Tax hikes to investments discourage investment.

So what does the CBO suggest would be a better approach? The study confirms what many tax cutters have been saying all along about the value of cutting taxes rather than spending money we don't have. The stimulus package won't really stimulate the economy as effectively as tax cuts. It turns out that tax cuts actually impact families and the economy twice as fast as government spending.

So it turns out that Americans who were skeptical of the stimulus package were right. It may not be worth saying "I told you so," but it's worth learning a lesson for the future. I'm Kerby Anderson, and that's my point of view.






Obama's plan - distribution or destruction of wealth?

March 10, 2009 | Jim Brown

A Christian financial expert says the "socialist" economic policies of President Obama may bring temporary relief but they will also lead to long-term destruction of wealth.


Bloomberg reports that the Dow Jones Industrial Average has fallen 20 percent since Inauguration Day, the fastest drop under a newly elected president in at least 90 years.  When asked last week about stock market swoon, the president replied: "What I'm looking for is not the day-to-day gyrations of the stock market, but the long-term ability for the United States and the entire world economy to regain its footing."

Chuck Bentley is CEO of Crown Financial Ministries and host of the radio program "MoneyLife." He says professional investors are "voting no" on President Obama's economic plan by taking their money out of the markets, because they know that wealth is not created through borrowing and spending.
Obama's plan, says Bentley, reminds him of someone who has "maxed out" the $5,000 spending limit on their credit card and is in danger of not being able to pay that bill.

"So you suddenly got a $50,000 increase in your spending limit and you felt really good about your policies, and you said 'Everybody's going to have more money, there's going to be more money to go around,'" Bentley suggests.
But there is a problem, says the financial expert. "The people looking long-term are saying, 'Well, one day you're going to come up to your $55,000 limit -- and if you didn't have the money at $5,000 to pay your credit card, how are you going to have it when you have a $55,000 debt?'"
Bentley says although he has never been a political activist, he believes there needs to be an "outspoken voice" against President Obama's plan to impose a greater tax burden on investors and small businesses in America.

Josie06 Josie06
56-60, F
3 Responses Mar 10, 2009

I think the US stimulus policy is a straight forward implementation of fiscal policy. I can see why it is the immediate reaction of this administration. The UK is doing the same, although there is a greater history of government intervention over here. I see some of the points u make but a very complex situation means that there are grey areas. Cutting tax may stimulate growth and the Lauffer curve supports that, but there is also evidence that cutting tax where individual debt is very high sees disposable income direts towards reducing debt. In times like this reduced taxes gives increased disposable income that many people seek to save. Although interest rates are lousy, and the yield from equities is equally crap savers might resort to gold or foreign bonds. Cutting tax for individuals might not see any consumer growth and thus no impact on the economy. Obamas package runs against the grain for u free marketeers, and looking at it across the Atlantic I see it as a protectionist device, but long before monetarism and the neo cons trickle down, straightforward fiscal policy was fairly well recognised as a good way to stimulate the economy in such a situation as this. Funny how fiscal policy used be seen as a good way to stimulate the economy without the risk of inflation and yet this time around in the short term, at any rate, we are looking for inflation! Go figure it's bloody complex and I'm rapidly coming to the point where I think no-one knows what to do and we're basically ******.

Added that story earlier.<br />
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<a href="http://www.experienceproject.com/uw.php?e=480857" target="ep_blank">http://www.experienceproject.com/uw.php?e...</a>

Nancy stated today that a 2nd stimulus is needed and that she is looking into it. the second will be bigger than the first so that there is a bigger impact.