Doing nothing risks us getting into a nasty vicious circle: people don't have money so they don't spend so companies lose money so they lay people off so people have less money so they don't spend so...
Ideally, a stimulus will work like a shot of adrenaline and get the system back on line so it can then be rehabilitated into something self-sustaining. So the big thing, the biggest thing, that it needs to do is create jobs. I really like the infrastructure projects, because that needs to be done anyway, because we as a country have really been neglecting infrastructure maintenance for a long time, and we're only going to see more bridge collapses if we don't do something. And it puts people to work. Ditto, investing in green energy. Money to states and cities isn't a bad idea, because in a tax crunch these entities see declining revenues at the same time people need more services, and unlike the federal government they cannot run deficits.
Refunds/tax credits really have minimal effects, especially when they're distributed across the board. Money given to poor people is money that will be spent and circulated in the economy, because poor people can't afford to save shit. Money given to people who are not desperate is more likely to be saved, which ironically is not what we need in the short term. Crazy borrowing got us into this, but for right now spending is good (and what we're starting to see is that even people who are not making less money are spending less, because they're freaked out.)
The problem with scaling back our reliance on credit is that it's going to require a major readjustment of the economy, and that's going to be painful. That doesn't make it a bad idea, but I think we need to take steps to limit the collateral damage (if, for example, the demand for high-end electronics decreases, it's the people who assemble and sell them who take the biggest hit.)
I disagree that the CRA drove the foolish lending practices. People saw that there was money to be made and went for it and it turned into this sort of moebius house of cards.
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Ideally, a stimulus will work like a shot of adrenaline and get the system back on line so it can then be rehabilitated into something self-sustaining. So the big thing, the biggest thing, that it needs to do is create jobs. I really like the infrastructure projects, because that needs to be done anyway, because we as a country have really been neglecting infrastructure maintenance for a long time, and we're only going to see more bridge collapses if we don't do something. And it puts people to work. Ditto, investing in green energy. Money to states and cities isn't a bad idea, because in a tax crunch these entities see declining revenues at the same time people need more services, and unlike the federal government they cannot run deficits.
Refunds/tax credits really have minimal effects, especially when they're distributed across the board. Money given to poor people is money that will be spent and circulated in the economy, because poor people can't afford to save shit. Money given to people who are not desperate is more likely to be saved, which ironically is not what we need in the short term. Crazy borrowing got us into this, but for right now spending is good (and what we're starting to see is that even people who are not making less money are spending less, because they're freaked out.)
The problem with scaling back our reliance on credit is that it's going to require a major readjustment of the economy, and that's going to be painful. That doesn't make it a bad idea, but I think we need to take steps to limit the collateral damage (if, for example, the demand for high-end electronics decreases, it's the people who assemble and sell them who take the biggest hit.)
I disagree that the CRA drove the foolish lending practices. People saw that there was money to be made and went for it and it turned into this sort of moebius house of cards.