Mini-Bailout, For EVERYONE!

[Mr. Shaman]

("Mini", of course, being a relative-term.*)​

"I appreciate lower taxes, as do my small-business brethren. And we like being courted by politicians, who woo us because we are part of the American psyche as well as for more practical reasons. Small businesses provided a majority of job growth after each of the past two recessions, creating a million jobs between March 2000 and March 2001, even as firms with more than 500 employees lost 150,000 positions in the same period.

So why don't they offer us what we crave, or, more specifically, why aren't tax cuts the solution?

*The proposed tax cuts reward those who need it least. One of the more expensive provisions is an expansion to five years of the period over which losses can be used to reduce tax payments of profitable years. In other words, if I lost money this year, the package would allow me to reduce my taxes when I do well several years later. But that has value only when I make a profit again, not while I'm struggling to make rent.

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."

What could you get done, with a $2,000 bail-out??​

 

[PLC1]

("Mini", of course, being a relative-term.*)



What could you get done, with a $2,000 bail-out??​

$2,000 times 300 million people is $600,000,000,000, that's six hundred billion.

Are you advocating that instead of the eight or nine or so hundred billion that is likely to pass, or in addition to?

Is there a limit to how much an already broke government can give away?

 

[chestnut]

Why doesn't the government just agree they have to shrink the size of government and cut taxes at the same time. This stimulus package is a joke and will only increase government.

 

[Mr. Shaman]

Why doesn't the government just agree they have to shrink the size of government and cut taxes at the same time.

That's what George Bush said he'd do.....and, he had 8 years (and, a Cabinet of CEOs) to do so.

Maybe you should ask him.....and, all of his supporters, here.

​

 

[Dr.Who]

That's what George Bush said he'd do.....and, he had 8 years (and, a Cabinet of CEOs) to do so.

Maybe you should ask him.....and, all of his supporters, here.

​

He was wrong not to shrink government.

Which still makes P. Obama wrong when he too doesn't shrink it.

 

[Dr.Who]

The proposed tax cuts reward those who need it least

A reward is somthing that goes to, say, the winner of a race. When the winner works hard and is rewarded with the prize that is the way it should be. When the winner works hard and the reward goes to the last place contestant then that is wrong.

But the tax cuts are not a reward. It is a return of ones own money based on the proportion that was paid in.

Suppose ten people all decide they want to compete in a race. Nine of them pay an entry fee of $1 and one of them pays an admission fee of $10. The officials have collected $19. Then they run the race and it turns out that the last place contestant has been awarded the prize - a bright shiny plastic statue. When the contestants find out that the race was a sham they demand their money back.

If the officials split the $19 equally between 10 contestants that is not right. Each one should be refunded according to what he has paid in.

 

[chestnut]

Dr. Who. That was a perfect example.

Tax refunds are just that, refunds. That means you pay in first. If you haven't paid in than it isn't a refund. It is a hand out.

 

[Mr. Shaman]

He was wrong not to shrink government.

Which still makes P. Obama wrong when he too doesn't shrink it.

....And, you're....of course....gonna give Obama (the same) 8-years, to prove evryone wrong, right....or, is it different, for him?

Stand-by!

That loud SNAP you'll be hearing, will be the collective-necks of his "conservative"-adversaries (in Congress), once they've been allowed to run to the end-o'-the-rope he's been giving them.​

 

[Mr. Shaman]

But the tax cuts are not a reward. It is a return of ones own money based on the proportion that was paid in.

If those taxes are returned as new-infrastructure....fine!

If they're returned, simply to prove we can run this country, for free......well, the last-eight-years have proven how much sense that makes. ​

 

[DanNew]

Thanks for introducing me to your Forum! While we disagree on some points, the level of discourse here is a lot higher than at other political sites, and I'm glad to have found it.


There are several good questions here about my column in yesterday's Washington Post:

>$2,000 times 300 million people is $600,000,000,000, that's six hundred billion.

Yes, I didn't mean to be unclear. There were 170 million taxpayers in 2008. If each gets a $2,000 card and 80% of those are redeemed (that's the national redemption rate for gift cards), the total is $272 billion.



>If you haven't paid in than it isn't a refund. It is a hand out.

I don't want a hand-out. I still need to attract you as a customer to earn your money. This program is simply a way to boost consumer demand in the short term.

Those of you pointing out that we're just borrowing from ourselves are exactly right, and for now, that's a good thing. While there may be benefits to a higher rate of saving in America over the long term, the swift drop in spending is causing substantial pain. We can start cheering about reduced consumption after people stop losing their jobs.



>Are you advocating that instead of the eight or nine or so hundred billion that is likely to pass, or in addition to?

In place of certain portions. I know several economists recommend a bailout of $1 trillion, as did Goldman Sachs last week, but that's such a staggering amount of money, I can't request more.

Yes, I get the irony of Mr. Shaman's "mini" bailout title. This is a huge amount of money.

But so is the projected $2 trillion drop in GDP this year alone. We can eventually ease some of the downturn with wise infrastructure investment. What can we do in the coming months?

Rebate checks fared poorly last year, as too many were simply saved. The American Gift Card can do better, as it can be used directly, without sitting first 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.



The Gift Cards are also more effective as a short-term stimulus than the proposed tax cuts. I'm a fan of many of those cuts, particularly expansion of exemptions from the Alternative Minimum Tax, but we shouldn't confuse them with immediate stimulus. When your house is on fire, there are things to do before choosing a new sprinkler system.

There's a burning need. The 600,000 jobs lost last month are most remarkable in that they represent only one sixth of the the total losses since the start of the recession. We need relief now, while all other plans take root.

The $2,000 gift card isn't meant to be a full solution. It's a tool we can put in the hands of every American, right now, this week.

http://callaspade.blogspot.com/

 

[Mr. Shaman]

Yes, I get the irony of Mr. Shaman's "mini" bailout title. This is a huge amount of money.

My point was....."conservatives" want to cry & whine about any (what they perceive as) perks, for the average-taxpayer, yet.....the cost of such cards would be a drop-in-the-bucket, compared to what BUSHCO stole from our National Treasury, thru various hustles (War being the primary-hustle).

This gift-card would make too-much-sense, to the average-"conservative".....and, they surely can't risk anything that'd pull us out of another Bush economic-debacle! The last-time a Dem did it, was embarrassing-enough, for them.

Relevancy is Priority 1, for "conservatives", presently.

 

[Dr.Who]

....And, you're....of course....gonna give Obama (the same) 8-years, to prove evryone wrong, right....or, is it different, for him?

Stand-by!

That loud SNAP you'll be hearing, will be the collective-necks of his "conservative"-adversaries (in Congress), once they've been allowed to run to the end-o'-the-rope he's been giving them.​

Either president deserves to be criticized right after they do something.

If the left had dole a better job of coming up with real criticisms they would not have had to resort to saying "he lied" over and over again when he did not in fact lie.

They could has easily criticized him for letting illegal aliens into the country or for spending too much - except that they love both of those things. They could have criticized him for being an adulterer too because they love that as well, but unfortunately he was not an adulterer either.

 

[Dr.Who]

If those taxes are returned as new-infrastructure....fine!​

I just have to point out the obvious here.

If they build infrastructure with the money it is not a tax cut nor is it returned.

If they're returned, simply to prove we can run this country, for free......well, the last-eight-years have proven how much sense that makes.

Bush returned hardly anything in tax cuts. He increased spending. So if you think his policies are a testimony to how not to do things then you are in favor of doing the opposite of increasing spending.

 

[Mr. Shaman]

I just have to point out the obvious here.

If they build infrastructure with the money it is not a tax cut nor is it returned.

True.....we only get what we paid for.​

 

[PLC1]

True.....we only get what we paid for.​

That's very impressive, but the fact is that we're not paying for it, at least not right now. All of the money for the bailout is borrowed, every cent.