Obama
January 8th, 2009 8:28 am | by John Jansen |President-elect Obama will provide details of his stimulus package in a speech in Virginia at 1100AM. The package is expected to total around $800 billion.
The Congressional Budget Office projects a fiscal year deficit of $1.2 trillion. However, that figure does not include the loss of revenue and increased spending from the stimulus package.
15 Responses to “Obama”
By Andrew on Jan 8, 2009 | Reply
the soothesayer will speak. all hail Bam. So on a more serious note, there will be atleast a 2 tril dollar deficit? And thats not including what lies in store for us this coming year…….
By Carl on Jan 8, 2009 | Reply
I’ve got a question for anyone who cares to chime in. Before I ask it, let’s assume, for the sake of this argument, that both Bush and Obama are equally good or bad as presidents. My question is not about them per se.
Is there any way the current and upcoming stimulus packages will have their desired effects? We all know from history that printing money rarely has a happy ending, and we must assume that people like Paulson, Bernanke, Geithner, Summers, and all the people on the economic teams of both Bush and Obama know their history.
But is it possible that this infusion will work to some degree, and that those of us (me included) who are so sour on the idea could end up being wrong?
BTW, this is a great website.
By BL on Jan 8, 2009 | Reply
It’s only money.
What really matters is whether people are working to make the things that enrich our lives and invest in the future.
The supply side assumption these many years has been that private spending is wiser than government spending. But as a nation, we’ve over-invested in housing, which is non-productive. If the stimulous package is good investment, it will be a net good thing, however the accounting works out.
By K T Cat on Jan 8, 2009 | Reply
that figure does not include the loss of revenue and increased spending from the stimulus package
Wow.
By Andrew on Jan 8, 2009 | Reply
lol its only money, what a joke kid. Without that money none of that R&D and developing new things will happen.
By David on Jan 8, 2009 | Reply
I think the bottom lines is that the world is positioned for an unrealistic amount of end user consumption. There is too much capacity especially in places like China. The governments of the world might be able to fill some of the gap in aggregate demand but it will not be demand for the same exact stuff. This means there will be a painful rebalancing period. There is just nothing the governments can do to make people buy more Sharper Image jacuzzi foot baths. Since capacity dies hard, this will result in deflation, or falling real prices for such manufactured things. The best the governments could do is force some inflation in things related to what they are purchasing. If they can prevent deflation overall (which would be a miracle) it would require so much printing that wages in construction and related commodities goes much much higher even while other wages and manufactured goods drop in value. That would create a major distortion the results of which are hard to fathom.
By Andrew on Jan 8, 2009 | Reply
Well Carl, I would say that the massive printing of money has worked several times since we went off the Gold Standard. As evidence of 1980, 1988, 92, 2000 etc Whenever we got in trouble we printed and inflated the money supply which inflated asset prices. The problem now is, the massive printing of money is not working, plus this was not a Fed induced recession like the ones before. Goodluck!
By Doug P on Jan 8, 2009 | Reply
I heard a campaign speech this morning, nothing in the way of details.
Someone please let Mr. Obama know that he did indeed win the election.
By Greg on Jan 8, 2009 | Reply
Obama is already a failure as President. He promised change — but he hasn’t even taken the oath of office and he has already reverted to “more of the same” policies.
The US spends way more than it earns, and has for decades (long before Bush screwed things up).
Any proposal that amounts to “spend more” is just more of the same. Any proposal that pretends that “spending cuts” are not a major part of the solution is just fraud.
No nation has ever taxed itself into prosperity. Bridges to nowhere are political pork, not investments. Bailing out failed businesses (banks or UAW) just means less money for successful businesses.
Name any sports team that benches its best players and promotes its worst players? This bailout culture is just foolish
We will cut our absurd spending on our terms now, or our creditors will do it for us, on their terms, in the near future.
Lets hope Obama actually carries through on his change promise and stops the current foolishness
By Andrew on Jan 8, 2009 | Reply
Come on Greg, we all know that he wasn’t referring to economics when he said “change” and if he was it was to more socialistic policies like Europe. One day just maybe people will realize what he means by “change”
By Greg on Jan 8, 2009 | Reply
Andrew — whatever Obama wants to do, he needs to have real money with which to do it, not accounting flim flam. Every President since Washington has wanted to spend lots of money on his pet projects — but for the last 50yrs they have all spent more money than we have.
Watch any of these drug rehab shows for 5 minutes and you quickly realize yhe language of politics and the language of addicts is essentially the same.
“Spend money we don’t have to do XXX” is just more of the same, regardless of what XXX is
By Andrew on Jan 8, 2009 | Reply
I agree…….I am just saying his notion of Change is probably not what most of the country had in mind….
By Greg on Jan 8, 2009 | Reply
Obama (and all the idiots in Washington) are always telling us they are “public servants” — why does the servant get to tell the master what “change” means?
Today Obama proposed spending about $1 trillion dollars on “shovel ready” projects, all **part** of his plan to create 3 million jobs.
Apparently, the servant’s masters aren’t very good at math… not only do they think spending can increase 8-9% in an economy growing 4-5% (both long term averages) … but these masters are so addicted to spending that they see no issue with spending $333,000 to create construction jobs that pay (optimistically) $50,000.
How long does it take to build a project? 4-5 years? Lets say 5, and lets say the workers get $50K per year — that would be $250K in jobs, paid for by $333K in spending (not counting the interest on the debt used to finance these jobs).
The debt will keep costing taxpayers years, probably decades, after the construction jobs are finished.
And the best part of all???? ….
Obama, channeling his inner Henry Paulson, tells us we had better approve his stimulus or the economy will be a disaster of biblical proportions
Its not just the economics; even the rhetoric is the same
By Torp on Jan 9, 2009 | Reply
“How long does it take to build a project? 4-5 years? Lets say 5, and lets say the workers get $50K per year — that would be $250K in jobs, paid for by $333K in spending ”
lol…Have you ever heard about about multiplier effects of fiscal and monetary stimulus spending?
By K T Cat on Jan 9, 2009 | Reply
Globally, everyone is rushing to do the same thing. If you’re a bank and the commercial world is contracting, will you purchase government bonds or loan money to a business?
Just how this stimulus plan is going to help is completely beyond me. As far as I can see, all it will do will be to starve everyone else of funds.
David, that was an awesome comment. I’m going to link to it on my blog.