fiscal stimulus package posts
FeedPosted Aug 4th 2009 4:20PM by Joseph Lazzaro (RSS feed)
Filed under: Recession
A victory of sorts, for Keynesian economics, and ultimately, for the American people.
Earlier this year author Amity Shlaes, who is a conservative and not a Keynesian, was a member of the chorus of market absolutists and conservative economists who opposed the U.S. government's fiscal stimulus package, on philosophical grounds: government spending doesn't stimulate the economy. (Shlaes should talk to automakers based in the U.S. about that one, particularly amid the
'cash for clunkers' fiscal stimulus plan.)
Continue reading Supply sider now believes fiscal stimulus leads to GDP growth
Posted Mar 11th 2009 12:15PM by Joseph Lazzaro (RSS feed)
Filed under: Politics, Recession
In his column last week,
New York Times (NYSE:
NYT) columnist and Nobel Prize-winning economist Paul Krugman laid waste to those who argue that he's not critically assessing Obama administration programs. He offered a cogent critique of the U.S. Treasury's tardiness regarding
the banking system fix. Either temporarily nationalize those banks that are clogging the system, buy the toxic assets at unsubsidized prices, or announce some other market-valued removal plan to unclog the system, but let's put this train in motion, Krugman said, in so many words, to get to the root of the matter: We need to get credit flowing freely to facilitate commerce.
Continue reading If the U.S. economy strengthens, Fiscal Stimulus II may be shelved
Posted Feb 26th 2009 2:55PM by Joseph Lazzaro (RSS feed)
Filed under: Politics, Recession, Financial Crisis
In the landmark, blockbuster film
"Jaws" (1975), reluctant sailor, Police Chief Martin Brody (Roy Scheider), while chumming bait, gets his first look at the great white shark that's been terrorizing Amity's shoreline community. Captain Quint (Robert Shaw) and Marine Biologist Matt Hooper (Richard Dreyfuss) are immediately struck by the shark's size.
But Chief Brody is struck by another reality. "You're gonna need a bigger boat," Brody said.
In today's environment, with the U.S. economy in a pronounced recession and credit markets still constrained, the Keyensians - - which include most Congressional Democrats - - are playing the role of Chief Brody. They know what's needed to go after that shark (the recession).
'You're gonna need a bigger stimulus.' (In this case the 'bigger stimulus' means
a second stimulus package.)
Continue reading Will the U.S. economy need a second fiscal stimulus package?
Posted Feb 17th 2009 8:15AM by Joseph Lazzaro (RSS feed)
Filed under: Industry, Stocks to Buy
Investing, like the politics that leads to U.S. public policy, is the art of the possible.
Conditions shift, windows of opportunity present themselves, even amid choppy seas. One such opportunity is presenting itself with
Fluor (NYSE:
FLR).
Fluor is a leading international design, engineering, and contracting firm with projects that include designing and building manufacturing facilities, refineries, pharmaceutical facilities, health care buildings, power plants and telecommunications and transportation infrastructure.
Continue reading Fluor (FLR) knows there's plenty of work to be done in the U.S.
Posted Feb 9th 2009 11:30AM by Joseph Lazzaro (RSS feed)
Filed under: Forecasts, Politics, Recession
As the U.S. Senate
prepares to vote on an $820-$900 billion fiscal stimulus bill and send it to a House / Senate conference committee, a stark reality confronted lawmakers: the stimulus package may not be large enough.
A group led by Senate Moderate Republicans and selected Democrats cut roughly $60-80 billion from the bill, in what they believe to be wasteful spending and / or items not directly related to stimulating the economy.
Economist Richard Felson said lawmakers may find themselves staring at an economy in six months that needs another stimulus jolt, and given the two options, it's better to provide the stimulus all at once, from a GDP-impact standpoint.
Continue reading Fiscal stimulus package is big, but may not be big enough
Posted Feb 5th 2009 6:30PM by Joseph Lazzaro (RSS feed)
Filed under: Forecasts, Employees, Indices, S and P 500, DJIA
It looks like tomorrow could very well become yet another "hang on to your hat Friday" or another edition of "As The U.S. Economy Turns."
Still, hopefully it won't become another 'down goes the Dow' day with an extended visit from our old friend, you guessed it, Dow 8,000. But analysts and economists haven't ruled the latter out.
The reason? The January 2009 jobs report, to be released by the U.S. Labor Department at 8:30 a.m. EST.
Following nearly a week in which a Fortune 500 company announced a major downsizing daily, and on the heels of December 2008's loss of 524,000 jobs, most professionals in economics and public policy circles are preparing for another sobering jobs report.
Continue reading Traders preparing for another 'hang on to your hat' Friday
Posted Feb 5th 2009 4:50PM by Joseph Lazzaro (RSS feed)
Filed under: Good news, Housing
Now we're talking fiscal stimulus. In a move to provide stimulus and economic incentives to a sector that, arguably, needs them the most, the U.S. Senate has added to the fiscal stimulus package a tax credit for up to $15,000 for homebuyers,
The New York Times reported. Economists and public policy analysts caution that the Senate has yet to vote on the stimulus bill, and the legislation, if approved, would then have to be reconciled, via a conference committee, with the stimulus package passed by the House. Nevertheless, economist Peter Dawson still likes the direction of the February wind in Washington.
Continue reading Ray of Light: U.S. Senate adds $15,000 homebuyer tax credit to stimulus bill
Posted Feb 3rd 2009 7:30PM by Joseph Lazzaro (RSS feed)
Filed under: Politics, Recession
Senate debate resumed Tuesday on the
fiscal stimulus package, and as it did several economists offered their policy advice for the august members of the world's greatest deliberative body.
The biggest change should concern size, so says economist David H. Wang. "It's too small. A $900 billion plan is good, but the stimulus plans that most effectively increase GDP are ones that are large, and the bigger the package, the bigger bang you'll get for your buck, from a GDP standpoint," Wang said. Wang said he would add at least $300 billion in spending to the plan.
Continue reading Economists: Modify fiscal stimulus package, but pass it, pronto
Posted Jan 29th 2009 5:40PM by Joseph Lazzaro (RSS feed)
Filed under: Forecasts, Politics, Recession
Here's one tax cut/credit that Democrats and Republicans apparently agree on. Or, in Washingtonspeak, 'left has met right, so let's get this bill out the door.'
It appears the U.S. Senate is posed to add a provision to reduce taxes, at least temporarily, on corporate profits earned abroad.
The Washington Post reported Thursday that further Senatorial changes could follow, and the Senate stimulus bill would have to be reconciled via a conference committee with a House version passed Wednesday, but the current Senate proposal would dramatically reduce taxes, from 35% to 5.25%, on foreign corporate profits repatriated to the United States.
Continue reading Stimulus plan's tax cut for foreign corporate earnings could inject $545 billion into U.S. economy
Posted Jan 29th 2009 10:30AM by Joseph Lazzaro (RSS feed)
Filed under: Politics, Recession
Following's Wednesday's
244-188 House vote -- one in which, despite President Obama's efforts to cultivate Republican ideas, every House Republican voted against it -- the focus on the stimulus package shifts to the Senate, where plan revisions are likely.
Assuming Senate passage, any differences between the two versions would have to be resolved in a conference committee.
Republicans are complaining that the bill has too many traditional Democratic-constituency-based programs and 'pork,' while some Democrats are concerned the bill does not contain enough spending - - in particular infrastructure spending, to create jobs the U.S. economy needs. The U.S. economy lost more than 2.6 million jobs in 2008 -- including 1 million in the past two months -- and the nation's unemployment rate has soared to 7.2%.
Continue reading Senate likely to revise stimulus package after House approval
Posted Jan 26th 2009 5:45PM by Joseph Lazzaro (RSS feed)
Filed under: Forecasts, Economic data, Politics, Recession
One of the biggest misnomers in the current fiscal stimulus debate concerns the United States' ability to service its
budget deficit and national debt (pdf).
Provided the fiscal stimulus package is passed, the national debt ceiling will increase to $12.1 trillion from the current $11.3 trillion.
Deficit approaching intolerable levels?Economic conservatives, market absolutists, and the like argue that the annual budget deficit and national debt are approaching intolerable levels. In truth, what they're arguing against is a needed government intervention and New Deal-type spending required to jump-start the U.S. economy -- even if it means the economy will plunge into a deeper recession without the stimulus. It seems some economic conservatives would rather see the nation's economy suffer, than to violate one their flawed economic theories.
Continue reading U.S. budget deficit remains serviceable, provided U.S. economy grows
Posted Jan 26th 2009 11:45AM by Joseph Lazzaro (RSS feed)
Filed under: Forecasts, Politics, Recession
Despite bracing for the worst, a comprehensive look at the official hard data has provided another dose of the sobering economic reality for the young Obama administration.
The economy "is worse, quite frankly, than everyone thought it was," Lawrence Summers, President Obama's chief economic advisor, said Sunday on NBC's
Meet The Press.
"We've got to spend money now while we have a recession, while we've got this serious economic crisis, but as soon as the economy recovers we are going to have to find ways of getting the government's finances under some kind of control," Summers said.
Summers added that the U.S. economy faces "very difficult" months ahead, which underscores the need for U.S. Congressional approval of the Obama administration's $825-850 billion fiscal stimulus package.
Continue reading Obama Administration's Summers: Economy is worse than we thought
Posted Jan 23rd 2009 5:45PM by Joseph Lazzaro (RSS feed)
Filed under: Forecasts, Politics, Recession
Readers of this space know that a preferred tactic, stemming from
the graduate school years and schmoozing with economists and policy wonks is to 'take the other side in an argument' or 'argue the alternate point-of-view.'
Well, one argument forwarded by economic conservatives, market absolutists and others is that the proposed
fiscal stimulus package will be 'inflationary' and that it 'won't stimulate the economy.'
Arguing to the contrary...Economist Peter Dawson took up the above argument, but only because BloggingStocks required him to do so (Ah, the power of the press!).
"A stimulus package that's both inflationary and that won't stimulate the economy," Dawson said. "Hmm? The logic is a little curious here, because inflation implies that there's demand and economic growth, and a failure to stimulate the economy implies there's very little demand and hence very little or no economic growth. The conclusions contradict, so what do the economic conservatives say the stimulus is going create, demand or no demand? I'll leave it for them to clarify their argument."
Continue reading What happens if the U.S. enters a 'giddy growth' period?
Posted Jan 23rd 2009 12:45PM by Joseph Lazzaro (RSS feed)
Filed under: Forecasts, Politics, Recession
The Obama administration's proposed $825-850 billion fiscal stimulus package will contain a great deal of tax cuts, and the reason is timing.
That's timing as in 'impact on GDP' and 'political timing,' so says economist Richard Felson.
Tax cuts galoreThe stimulus package will contain at least $275 billion and probably closer to $300-325 billion in cut tax cuts and tax-related investment incentives because they're "the short-term, immediate-impact fuel in the stimulus engine," Felson said. "The cuts will also attract some Republicans to the plan, which is consistent with President Obama's governance philosophy."
"Tax cuts will have an immediate impact and will show up in GDP rather quickly, within 3-4 months, which will provide some demand in the economy," Felson said. On Thursday, the House Ways and Means Committee approved, via a 24-13 party-line vote, a stimulus plan that included $275 billion in tax cuts,
The New York Times reported Friday. Felson said he expects selected House Republicans to vote for the bill on the House floor, and at least 4 or 5 Senate Republicans to do so, as well.
After a House floor vote, the bill will move to the Senate, where Senate Republicans may seek more tax cuts. Bill differences, if they occur, would need to be reconciled by a conference committee.
Continue reading Fiscal stimulus package will contain at least $275 billion in tax cuts
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