According to a recent article in the Wall Street Journal, the focus of the next possible economic stimulus package would be on “infrastructure spending, aid to states, and help for the poor through food stamps and jobless benefits.” This is in contrast to the package passed this past Spring which sent $600 checks to taxpayers and their families to the tune of $94 billion.
The purpose of the first economic stimulus package was to get consumers to spend in the hopes that it would help boost the economy. According the article’s author many economists felt that the first plan failed to spur the economy like it was intended. The money was used in large part to pay bills and debt (not a bad thing to do in my opinion). Consumer spending was up for a short period after the check were issued but the lasting effects were disappointing.
Nancy Pelosi, House speaker, said in a recent interview that if a new package were passed it wouldn’t happen until after the new year. My guess is we might hear a lot about a package from the presidential candidates in the days before the election.
$94 billion, huh? I can’t say how much that would actually buy but check out this plan I thought of:
- We find the areas in the country with the worst school overcrowding.
- We take a part of the money and contract to build new schools. Now we have just created new jobs in construction.
- Another part of the money goes to helping states/cities fund staffs for these schools. They’ll need teachers and administration, teaching materials (text books and such), and food services. Now we’ve created even more jobs.
- Since these areas will not be as overcrowded the students will have a better opportunity at a good education making them better prepared for the workplace later on. This means more productivity from the work force in the long run. Better education might also mean that they are better able to understand their personal finances.
What do you think? If another economic stimulus was passed what form should it take to best help the economy?
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The politicians seem to be at a loss for what to do. I think they are just grabbing at straws. I doubt another economic stimulus package is going to help whatever form it might take. I think it is a little too little, a little too late. We might just have to ride this downturn out and let the economy recover on its own.
While I agree that another economic stimulus package is of no substantial use, the money is better off at places where it would be spent to keep this economy rolling.
Many people I know who received the check from the first package didn’t really spend it as intended.
@ Jeff – I think it’s all a lot of politics with the election and what not. We’ll see what’s actually proposed.
@ Simon – The fact that many people didn’t spend it has to tell you something about the state of the economy. It would be nice if the gov’t would promote saving instead of spending.
It would be nice if we had a more stable economy — one based on wise financial decisions by individuals. But it is not to be.
Anyway, I agree that if the money is spent well, it might help (I like the idea of building infrastructure — heaven knows our power grid is woefully outdated — and education).
Honestly, we need to take a look at our priorities as a country and a society and start thinking long-term. Any “economic stimulus” based on the short-term is just going to lead to greater instability down the road. And a bigger crash.
In my opinion we need infrastructure done yesterday! We should be rebuilding and building more railroads, subways, and trolleys. I think all government offices should have solar. I think we should fix every highway and bridge and pave all the dirt roads, I live on one. I think we should build hydro, and wind power plants. I think we should build clean coal plants with CO2 recapture processes. Last I think we should have job training programs for all of these new jobs.
Education money usually gets wasted. I am not against education, I am against the excess. Plus where I live religion is tightly infused into the local school curriculum so we have to home school.
Doesn’t it seem like there’s just sooo much screwed up there’s no where to start? Still, I try to remain optimistic that we’ll get through all of this.
Kind of ironic that the reason we are in this mess is because we lived beyond our means, yet the solution from the Government is to borrow from ourselves and encourage everyone to spend spend spend.
@ Frank – It’s an interesting example they are setting, no?
I somewhere read that most economists are not so pessimistic. The most likely outcome envisioned by many is a slowdown or a mild recession. That would increase unemployment somewhat, and it would keep the stock market in the doldrums, but it would probably not be severe enough to significantly crimp economies abroad.
I think that the money should only be distributed as to buy american oil and there is some out there. To buy American raised meat products food in general. They are out there. Read your labels.Stop fuel companies from gouging us on the price of gas propane and heating oil . The state government know they are doing it but won,t do anything about it. Sample- Propane from 226.00 agallon to over 300.00 in the same area I live in. A lot of people are changing every day of the year.How can the stimulus package help when these gourgers get wind of it and raise there price to eat it all up.
I agree infrastructure spending would be the best. But with economic woes and a new president I think we will get more gift cards (stimulus checks) very soon, followed by tax cuts in the nex year.
@ Andy – There’s definitely been a lot of talk about a new stimulus. I hope it’s not in the form of a check if one is coming though.
We need a stimulus check to buy beans and cornbread.
@ Jessie – Why?
FOR MYSELF AND MY FAMILY WE NEED ANOTHER STIMULUS CHECK!!! THE MORTGAGE PEOPLE DO NOT CARE IF YOU DO NOT HAVE A JOB THEY ARE READY TO TAKE EVERYTHING!!!!! AND IT SUCKS WHEN YOU CANT FIND A JOB THAT WILL PAY THE BILS YOU USE TO PAY EASY!!!!!!!!!
Well, you can be sure there are a great many people that I will be trumpeting “I TOLD YOU SO!” This is only phase 1 of the hosing the middle class is going to get from the new President. Continue dreaming about a leftist giving you a tax cut and tell me how that works out for you!
What Americans are finding out the hard way is that any economy based on consumer spending is completely and utterly doomed.
@ Lisa – I understand how extra money can help in times like these but if you are in a bad financial situation you need to really evaluate how you came to be that way. An extra check is just a bad bandaid in what is a bigger problem.
The mortgage folks are in bad times too. Have you tried talking to them and working out a different payment plan? The last thing a bank wants to really do is take over a home in foreclosure.
And I hear you about work. Used to be one income could support a family. It’s tough these days to be able to afford a home. You really need to have your finances in order.
@ Iron Bob – I’m not sure about what the next President will be able to do. I hope he can help but I don’t think a change in administration is all it will take to fix things.
I agree that this consumer attitude is a big part of this mess. We can only spend so much and when too many decide to consume more on credit it becomes a problem. Wasn’t one of the big problems of the great depression that too many people were buying stocks on credit? When will we learn?
All of these allied countries love to get our money, but do they buy american goods. Check the record. We,re supporting the world and not getting anything in return but a few jobs, China and Japan are buying up as much american soil as they can. Before long if nothing is done we will be a third world country. I pray to God that the polititions here would get their act together and go by the constititution of the USA and stop leaving out what made our country great. GOD BLESS AMERICA. IN GOD WE TRUST AND PRAYER IN ALL OF OUR NATION , what ever your religon is. The only way to get to heaven is through the attonement of Jesus Chirst!!!!!
@ Robert – When other countries buy our goods that’s a good thing. It helps businesses grow. These days there isn’t just a one country market anymore. We live in a global economy. The successful companies will be those that find a way to market to the world.
I’m not sure what you mean about sticking to the constitution? I believe we have a separation of church and state. I respect everyone’s religious beliefs but I don’t think religion is what will make the economy better.
Don’t get me wrong, I don’t hate people who are down and out, but there are plenty of resources for people who are jobless and have no income. I have heard talk that the second stimulus package will be used to beef up food stamps, etc. I would like to scream it from the rooftops that this is NOT FAIR!!! What about decent people who work for a living? Especially those that traded a huge paycheck (like politicians) for a smaller one so they would have to opportunity to help people who need them (like domestic violence advocates) and now they have to choose between life saving medication and groceries because the price of everything has skyrocketed! I haven’t seen anyone at all rushing to help us! Why do we always have to fall through the cracks? My husband and I both work. I do not recieve anything from the government to help me. My husband was laid off by the local community college because of funding cuts and now I am supporting us and our 5 year old son off a 10 dollar an hour job. (I work for a local nonprofit that cant afford to give me more money because of funding cuts.) How am I supposed to feed my son, make rent, pay my electricity and water, and pay for all my traveling expenses so I can get to work? You tell me that the foodstamps program needs more money? What about those of us that the government wont help because we actually try to help ourselves?
@ Patricia – Sorry to hear about your situation. It does seem like there are people who are stuck in the middle that make too much for assistance and too little to get by.
With possibly a year or more ahead of us and only 13 weeks of the new stimulus and no money to pay bills, this seems unbelievable. I am from Michigan and we have had a brutal winter, the new road construction and other infrastructure cannot even start in our part of the country till warm weather comes. Most of the new stimulus is for male workers. We need something to help us until the jobs are a reality and not a promise. Michigan has the highest unemployment in the nation and usually does. 13 weeks is a drop in the bucket with no source of income. No one can live on unemployment, we need a larger extension and some money to help with bills and food expense.
@ Barbara – Michigan has certainly had it tough and I can imagine it being worse with the problems the automakers have had. It looks like a new stimulus plan is close to happening. I’d guess something will be done shortly after the inauguration. Hopefully there’s some help there for you!
I’m sorry but our new president doesn’t seem to have an answer to our economic problem anymore than our old one. Everyone I know myself included are sick and tired of bailing out the rich. If the Bush administration would have taken the money used to bail out the banks and combined it with the money planned for the auto manufacturer’s they could have given the money to the tax paying citizen’s and the economy would have been boosted immensly. The people would have first paid off their homes and next purchased a new vehicle and that would have taken care of the banks and the auto manufacturers.
After satisfying their major debt’s the people would have had the money to spend in the economy by taking family vacations and spending in general. I believe in Lisa’s concerns “Let’s focus on bailing out the people” and let the people worry about bailing out the rich. It’s soo easy to sit up on a high horse and look down on the people but without taking care of the little man everyone suffers.
@ Mike – More money to the people might help many but it causes problems with inflation. You and I might be able to do the right thing with the money but so many more will just get sucked into buying things like flat-screen TV’s rather than make better use of the money (nothing against flat-screen tv’s mind, just that some families have more pressing issues). I hear your frustration though. It feels like there has been non-stop talk about the economy for a year now and it hasn’t gotten better. Obama needs to make a positive impact quick or the masses will lose faith in his ability to turn the economy around.