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Joahob





Joined: 13 Jan 2007
Posts: 403
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votes: 2
Location: Spaceship Earth

PostPosted: Sat Feb 07, 2009 2:02 pm    Post subject: Silliness of Stimulus Reply with quote

Dan Newman wrote:
A better choice would be something Americans are likely to spend, and without huge logistical headaches: a gift card. By sending every taxpayer a $2,000 debit card, the government stimulates spending directly. The card doesn't get deposited with a bank, a step that greatly reduced the use of last year's rebate checks for new spending, and with a defined expiration time, perhaps a year, the program could help precisely while other programs get underway.

The American Gift Card could bear a picture of Lady Liberty, since it may be used for whatever taxpayers wish: smarter clothes, dinners out, a weekend away, a new heater. And as gift cards tend to be used in person, they are of particular interest to local businesses.

Gift cards have a nationwide redemption rate of 80 percent. If such debit cards were used at the same rate, the cost of the program would be $270 billion, for a greater effect at less cost than the proposed tax breaks.

And such cards allow people to spend where they find it most valuable, obviating debate about where the government "should" spend money. Consumers will choose what things they need most, and, whatever those are, they would be more affordable.


As much as this is so amusing, the real absurdity behind this idea is what would stop people from spending this gift card on groceries and gas while saving the money they would have spent on such goods and using it to pay down debts?
Mac





Joined: 02 Sep 2006
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votes: 35
Location: John Baird's riding...

PostPosted: Sat Feb 07, 2009 4:03 pm    Post subject: Re: Silliness of Stimulus Reply with quote

Joahob wrote:
As much as this is so amusing, the real absurdity behind this idea is what would stop people from spending this gift card on groceries and gas while saving the money they would have spent on such goods and using it to pay down debts?

Pretty funny, isn't it? I guess the Obama-nistas are hoping the 10 second attention spanners will find the "free" money to be irresistible. Sadly, they're likely right...

-Mac
DanNew





Joined: 09 Feb 2009
Posts: 2


PostPosted: Mon Feb 09, 2009 5:20 pm    Post subject: Yankee Steps Reply with quote

And I didn't believe my friend when he said I'd been insulted by Burt Reynolds!

Still, you've raised a good question about my column in the Washington Post.



Quote:
what would stop people from spending this gift card on groceries and gas while saving the money they would have spent on such goods and using it to pay down debts?

Nothing. Or almost nothing.

If people save every penny of it, the program carries no cost: $2,000 goes to each American, then back to their government years later. Even the interest paid goes to them and back, as the debt is financed by Treasuries bought overwhelmingly by Americans.

But the gift cards are much more likely to be spent than last year's rebate checks, because the cards can be used directly, without first sitting in a bank. It's the difference between having a bowl of chips on your counter instead of having one stashed at the back of the top shelf.


Quote:
I guess the Obama-nistas are hoping the 10 second attention spanners will find the "free" money to be irresistible.

I'm never one to criticize skepticism of a government program: you have good reason to be wary.

But no one should confuse this with creating wealth. It doesn't.

What it does is provide the short-term stimulus needed while other necessary changes take place. I'll happily take lower taxes for my business, but to make it through next month, I need consumer demand. Without it, I'll just add employees to the list of unemployed, and that helps no one.

This is America's problem, of course, but it's true when America sneezes, Canada catches a cold, etc. Don't think that gives me any pleasure.
Mac





Joined: 02 Sep 2006
Posts: 5500
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votes: 35
Location: John Baird's riding...

PostPosted: Mon Feb 09, 2009 7:22 pm    Post subject: Re: Yankee Steps Reply with quote

DanNew wrote:
I'm never one to criticize skepticism of a government program: you have good reason to be wary.

But no one should confuse this with creating wealth. It doesn't.

What it does is provide the short-term stimulus needed while other necessary changes take place. I'll happily take lower taxes for my business, but to make it through next month, I need consumer demand. Without it, I'll just add employees to the list of unemployed, and that helps no one.

This is America's problem, of course, but it's true when America sneezes, Canada catches a cold, etc. Don't think that gives me any pleasure.

Welcome to the Blogging Tories forums!

I have no illusions about the stimulus packages creating wealth. It's taking wealth from the tax slaves and throwing it away in the hope that somehow this time it will work, unlike every other time when Keynesian economic policies failed.

In this case, America has the cold and Canada hasn't even sniffled yet. I'm sure the economic stimulus measure will fix that.

-Mac
DanNew





Joined: 09 Feb 2009
Posts: 2


PostPosted: Mon Feb 09, 2009 7:58 pm    Post subject: Reply with quote

Quote:
Welcome to the Blogging Tories forums!

Thanks! Glad to have found them. It's not everywhere that I can find a line like:

Quote:
In this case, America has the cold and Canada hasn't even sniffled yet. I'm sure the economic stimulus measure will fix that.

I disagree deeply, but that still made me laugh.

Let's try this from another angle.
With the proposed gift card, the government makes no choices about which companies or industries should receive the money. No one gets a handout. Businesses that offer nothing to customer still get... nothing. Those are all good features, yes?

The card functions much as a tax cut does, but it gets into the economy faster. Speed the goal here, for this particular measure. Much as I'd like my business taxes to be lower when due, I still need enough consumer demand to pay my rent next month.
Mac





Joined: 02 Sep 2006
Posts: 5500
Reputation: 104
votes: 35
Location: John Baird's riding...

PostPosted: Mon Feb 09, 2009 9:34 pm    Post subject: Reply with quote

DanNew wrote:
I disagree deeply, but that still made me laugh.

I've always figured it was better to laugh than cry. I'm glad you enjoyed my wit.

While our economy is somewhat stalled as a result of external forces, it is nowhere nearly as bad as the fear-mongering MSM would have us believe.

Check any number of key indicators (like... anyone other than the opposition parties) and the picture becomes a great deal less gloomy. Compare the per capita house foreclosures in Canada versus the US for instance. Where is Canada's economy ranked amongst the G8 nations?

DanNew wrote:
Let's try this from another angle.
With the proposed gift card, the government makes no choices about which companies or industries should receive the money. No one gets a handout. Businesses that offer nothing to customer still get... nothing. Those are all good features, yes?

The card functions much as a tax cut does, but it gets into the economy faster. Speed the goal here, for this particular measure. Much as I'd like my business taxes to be lower when due, I still need enough consumer demand to pay my rent next month.

Actually, it sounds to me like the gift card is a handout but I understand what you mean. You're proposing that it's better to allow citizens direct choice rather than corporate welfare. I agree but I would rather see that choice in the form of permanent tax cuts... coupled with permanent program cuts to Trudeau-topian legacy programs.

Anytime someone offers you a gift (whether it's in the form of a card or whatever) which you end up paying for plus administration and interest, you're looking at the wrong end of the gift horse... That's a tail, not a long moustache.

-Mac
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Silliness of Stimulus

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