Which part of this do you disagree with?

 

Economists say the money out the door -- combined with the expectation of additional funds flowing soon -- is fueling growth above where it would have been without any government action.

 

Many forecasters say stimulus spending is adding two to three percentage points to economic growth in the second and third quarters, when measured at an annual rate. The impact in the second quarter, calculated by analyzing how the extra funds flowing into the economy boost consumption, investment and spending, helped slow the rate of decline and will lay the groundwork for positive growth in the third quarter -- something that seemed almost implausible just a few months ago. Some economists say the 1% contraction in the second quarter would have been far worse, possibly as much as 3.2%, if not for the stimulus.

 

Total GDP analysis is empty. Sector analysis is the only way to look at it, something many other recent WSJ articles have focused upon, and as many examples reference, the mortgage legislation has an over 85% recidivist rate (meaning that 85 out of every 100 mortgagees aided by initial funds have re-defaulted); secondary market business loans (non SBA) has slowed almost to a trickle; and the general feeling with the money market fund industry is that cash has been horded and not reinvested. On a micro-scale, credit card and mortgage defaults at the local level continue to rise, and the returns coming in from vacation expenditure over the summer are down precipitously. Most of the job increases reported are seasonal or short-term, plusses no doubt, but nevertheless no predictor of long-term stability.

I think the banks have been very key and going all the way back to TARP under Bush and continuing through Obama may have had a bigger impact.

The stimulus itself is a boondoggle in my opinion and is nothing but short term. Many car companies are not getting there money from the "Cash for Clunkers" and it stimulated growth for Ford and Toyota...not much help for GM.

States are still in really bad shape I think they could have diverted more funds to help states and maybe with fewer strings attached because many state are turning down funds because in the end it hurts them more than helps them.

 

Schools have been receiving money from stimulus funds but not to hire teachers, but to be used for professional development and in a form to be used to purchase technology.

 

Had forgotten about this, but this is correct. We just re-adjusted our budget because the money promised is tagged for specific, useless expenditures to us.

Are you of the belief that no matter what the immediate benefit is or may be that if there is a negative long-term national debt scenario that you do not take that trade?

No, you have to do a cost/benefit analysis of any situation- you can't apply a generality like that.

 

The fact remains that unemployment is hovering around 9% and we've spent trillions of dollars that we don't have.

The stimulus itself is a boondoggle in my opinion and is nothing but short term. Many car companies are not getting there money from the "Cash for Clunkers" and it stimulated growth for Ford and Toyota...not much help for GM.

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I assume you're basing your claim about GM on the fact that same-month last year sales were 20% lower this year. I'd argue, and I know GM dealers would as well, that you're looking at the wrong month for a comparison. You have to look at June and July to gauge the impact of the program. I don't have those numbers but I'll bet that GM's sales for August were up and probably significantly over June/July.

 

Cash for Clunkers worked. It got people buying cars (win) and it got old crappy cars off the road(win). Dealers sold cars and kept people employed. That's a win.

 

The execution of actually paying these dealers is the problem. Its actually potentially a huge problem.

Had forgotten about this, but this is correct. We just re-adjusted our budget because the money promised is tagged for specific, useless expenditures to us.

 

From what I understand, there are a bunch of strings attached for stimulus money to schools. None of it can be used to hire a teacher, even in an emergency situation, pay for subs or things like that.

Cash for Clunkers worked. It got people buying cars (win) and it got old crappy cars off the road(win). Dealers sold cars and kept people employed. That's a win.

 

I disagree, and I'm starting a new thread on it.

I assume you're basing your claim about GM on the fact that same-month last year sales were 20% lower this year. I'd argue, and I know GM dealers would as well, that you're looking at the wrong month for a comparison. You have to look at June and July to gauge the impact of the program. I don't have those numbers but I'll bet that GM's sales for August were up and probably significantly over June/July.

 

Cash for Clunkers worked. It got people buying cars (win) and it got old crappy cars off the road(win). Dealers sold cars and kept people employed. That's a win.

 

The execution of actually paying these dealers is the problem. Its actually potentially a huge problem.

On the surface it looks like Cash for Clunkers was a great idea and that it worked, however, it is only a short term fix.

The government paid car owners to trade in their old cars, which will be destroyed. But the government is running a deficit. So it doesn't have $3 billion to hand out. It must borrow the money, which reduces the amount of money for other investments. Moreover, the government must raise taxes in the future to pay back the principal and interest -- or the Federal Reserve will monetize the debt through inflation. Either way, we pay.

In addition, people likely would have traded these cars in sooner or later. There are other impacts. Say mechanics. Less work for them. Poorer people who buy used cars...cars traded in were destroyed.

Now we have Cash for Appliances on deck.

On the surface it looks like Cash for Clunkers was a great idea and that it worked, however, it is only a short term fix.

The government paid car owners to trade in their old cars, which will be destroyed. But the government is running a deficit. So it doesn't have $3 billion to hand out. It must borrow the money, which reduces the amount of money for other investments. Moreover, the government must raise taxes in the future to pay back the principal and interest -- or the Federal Reserve will monetize the debt through inflation. Either way, we pay.

In addition, people likely would have traded these cars in sooner or later. There are other impacts. Say mechanics. Less work for them. Poorer people who buy used cars...cars traded in were destroyed.

Now we have Cash for Appliances on deck.

Well. done. Essentially what I just stated, although more concisely (your version), in the new thread.

On the surface it looks like Cash for Clunkers was a great idea and that it worked, however, it is only a short term fix.

The government paid car owners to trade in their old cars, which will be destroyed. But the government is running a deficit. So it doesn't have $3 billion to hand out. It must borrow the money, which reduces the amount of money for other investments. Moreover, the government must raise taxes in the future to pay back the principal and interest -- or the Federal Reserve will monetize the debt through inflation. Either way, we pay.

In addition, people likely would have traded these cars in sooner or later. There are other impacts. Say mechanics. Less work for them. Poorer people who buy used cars...cars traded in were destroyed.

Now we have Cash for Appliances on deck.

 

I would add that CFC will cause inflation in the used car market, because the supply of used cars will decrease. Lower income people will be hurt the most by this, because a large supply of inexpensive vehicles is being destroyed.

 

It will also cause inflation in the used car parts market, same reason.

There are two different arguments here.

 

Many of you are arguing against the plan in the first place because of future economic concerns.

 

I am arguing that the intent of this plan was fulfilled. It worked as desired. The automotive industry and all of the people that depend on the industry won.

There are two different arguments here.

 

Many of you are arguing against the plan in the first place because of future economic concerns.

 

I am arguing that the intent of this plan was fulfilled. It worked as desired. The automotive industry and all of the people that depend on the industry won.

 

I don't disagree with that. However, I don't like the plan.

Nope. The economy is a veritable house of cards.

There are two different arguments here.

 

Many of you are arguing against the plan in the first place because of future economic concerns.

 

I am arguing that the intent of this plan was fulfilled. It worked as desired. The automotive industry and all of the people that depend on the industry won.

 

Using your logic, the Iraq war worked. Hussein was removed and no weapons of mass destruction have been used by Iraq.

 

You can't evaluate an event in a vacum. The present and future effects must always come into play. Many times there's no way of even knowing for many years due the the nature of unforseen consequences.

Using your logic, the Iraq war worked. Hussein was removed and no weapons of mass destruction have been used by Iraq.

 

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Unless the govt lied about why they were implementing the CFC program I'm not sure you are correct.

Unless the govt lied about why they were implementing the CFC program I'm not sure you are correct.

 

Don't worry about it, I'm sure.