Via memeorandum, this study of the stimulus bill:
The government wouldn’t be able to spend at least one-fourth of a proposed $825 billion economic stimulus plan until after 2010, according to a new report that suggests it may take longer than expected to boost the economy.
A Congressional Budget Office analysis of President Barack Obama’s plan found that most of the approximately $355 billion in proposed discretionary spending on highways, renewable energy and other initiatives wouldn’t be spent before 2011. The government would spend about $26 billion of the money this year and $110 billion more next year, the report said.
About $103 billion would be spent in 2011, while $53 billion would be spent in 2012 and $63 billion between 2013 and 2019, the report said. Republicans said the analysis showed that the plan, unveiled last week by House Democrats, won’t get money into the economy quickly enough.
Discuss.
Balconespolitics
Actually, it will get money into the economy the old fashioned way … by creating guarantees of future government spending on projects, which will allow private capital to flow to firms which will profit from working on/supplying materials for those projects with much reduced risk.
MFB
Joe Stalin would have taken ’em out and shot ‘wm. How the hell can the richest country in the world not spend its money? They poured dump-trucks into Iraq quickly enough.
Tattoosydney
… whereas their plan seems to include tax cuts, spending on armaments and nuclear power, mass sackings in the public service, crackdowns on pensions and Medicade, stricter controls on government spending (I kid you not – the sheer gall of the man):
and, of course, limiting regulation and fucking over unions.
Colour me surprised.
MFB
Balconespolitics, I thought trickle-down economics was a relic of the bad Bush era. You mean Obama’s a right-wing neoliberal who doesn’t give a damn for the people?
Heavens, who would have guessed?
MR Bill
I dunno, dude. From where I sit (the Georgia Mountains) it’s gonna take something WPA like, giving a lot of jobs to a lot of folks, to make this start gettin’ better.
Yeah, massive infrastructure spending is necessary, hell, it’s been allowed to slip for decades, while we were goldplating the military and force feeding ‘Defense Contractors’ large sums for redundant ‘weapons systems’ and ‘missile defense’. But the loss of jobs is what has me scared. and we need turn around there, and quick.
TheFountainHead
The problem isn’t that there isn’t money in the system. The problem is that there’s no confidence in the system. Long term government investment gives stability that is meant to attract the lenders who are currently all quaking in their holes.
Tattoosydney
@Balconespolitics:
Firms which can hire people and pay them salaries or wages.
kommrade reproductive vigor
Do those dipshits expect anyone except other dipshits to trust their reading of … anything?
Patrick
I don’t believe the CBO factors in future changes in their estimations (which would be the most conservative way to do it). No doubt, if their is a will, many of these projects can be fast tracked. But the CBO is not going to assume it.
When a highway or bridge or Superfund site is built or remediated, the bulk of the cost does come during the months of heavy construction. However, this can be preceeded by years (decades for lawyers attached to Superfund sites lol), of spending on design work. While not a large quantity of jobs, they are highly skilled and well paid jobs.
Plus, is the CBO talking calendar or fiscal years? If fiscal, then they are saying most of the spending will happen after this June 30, which is no big surprise.
Balconespolitics
@MFB:
Sure. And if Obama’s plan just called for giving rich people a lot of money and trusting they’d do the right thing with it (instead of investing on factories in China, hyperinflated real estate, derivatives, and heavily leveraging it to buy other companies) I’d be pissed off.
This isn’t trickle down, though. It’s actually leveraging federal dollars by putting a carrot out there to draw private capital into doing what we want it to. Trickle down is like giving kids a bunch of money, sending them into a grocery store, and trusting they’ll come out with veggies and lunchmeat instead of ice cream and candy.
CIRCVS MAXIMVS MMIX
As long as the banks don’t make a third trip to line their pockets one more time, I’m going to just keep my mouth shut and hope it works. I agree with others, private funds will flow when guarantees are made.
CIRCVS MAXIMVS MMIX
You meant Reagan, didn’t ya? Bush just adopted it from daddy, who adopted it from the sainted movie star.
CIRCVS MAXIMVS MMIX
A more concise description I have never seen.
harlana pepper
I don’t want to hear shit about "oooh, I’m sooo afraid he will raise my taxes, I’m a-skeered " from people who are doing much better than I am. In the last few years, I have lost $10,000 in annual salary and god-knows-what in worth in health insurance since I, like many others, have a pre-existing condition. I have been sufficiently "taxed" by the Bush administration so I’m really not sweating Obama’s plan too much (even though I think the $500 tax credit is a dumb and useless idea).
sgwhiteinfla
Just so I am getting this right, are they now saying its a BAD THING that we aren’t spending all of the money right away with no way to pull back any of it to redirect in other places if the economy doesn’t bounce back? Is anyone also saying that we should have given the $700 billion all at once to Bush and Paulson last fall?
LOL
So just to keep this straight in my mind. John Boehner acted as if he was going to faint last week when he heard the bill was for over $800 billion. But now he and his Republican buddies want to take every dollar of that over $800 billion and dump it into the economy all at once.
WOW.
Uhmm how in the hell would they propose to pay for all that spending in year one? Yeah thats what I call "the party of fiscal responsibility" right there!
dr. bloor
"If approved by the new Congress in February, the government would be authorized to spend up to three quarters of the President’s proposed $825 billion stimulus package over the first twenty-three months of his term."
Sounds OK to me. Just how long do we "expect" it will take to boost the economy, anyways? My personal over/under bet is three years.
JGabriel
I’m taking "Stimulus Bill" for my porn name.
.
dr. bloor
@harlana pepper:
Appropos: I just heard an NPR interview with a guy in a diner in Southwest Conservativeville, OK, who seems convinced that Obama’s pledge to "spread the wealth" was going to take money out of his pockets. They didn’t state it in the report, but he was presumably washing down his chicken-fried steak with Republican Koolaid.
Napoleon
@dr. bloor:
They did say at the beginning of the report that that area only gave Obama something like 27% of the vote. On This American Life last Saturday they had a bunch of interviews with people from such podunk areas that made the guy you mention seem sober and logical by comparison. They were absolutely wingnuts extraordinare.
Punchy
Its to the point where if a Rebuplican tells me that an Obama plan will do "x", I now just assume it will actually do "1/x".
Napoleon
@Punchy:
I use to listen to conservative/Republicans points regarding things, but any more I simply refuse to pay attention to them since nothing they do is in good faith or based on logic or reason.
Reverend Dennis
What part of building or repairing infrastructure takes time do the Republicans not get? I thought that the fact that numbers of people would be employed in this work for months or years was the main idea. They’ll be spending their money (And keeping their homes) locally and their employers will be spending money on materials and equipment for some time – not in a day.
A person would almost think that, no matter what Obama came up with, the Republicans would automatically object to it.
John
Well, that just puts a dent in the Dems plans doesn’t it? Talk all you want about "hopenchange" and how politicians will put aside their "petty" bickering–the Democrats have their eyes on the 2010 midterms already. And stimulus needed to be enacted last week for them to see any political dividend. They’ve hitched their wagon to the Obama horse and they know their fate is tied with the One. Good luck with that…
Incertus
Didn’t Krugman suggest that looking at it this way was a feature, not a bug? We’re going to be in an economic hole for a while, so we better look at long-term stimulus while we’re at it.
Balconespolitics
@John:
LOL – I love it when people tape their own "kick me" signs to their backs…
John
@Balconespolitics: OK, then…Messiah..
p.a.
Immediate spending needs are fed support for state unemployment funds and Medicaid. Not exactly job growth stuff, but very important to keep afloat until things turn around, probably not before late 2010. Polls show Am public saying they understand and will be patient with O, but time will tell. What will happen in those midterm elections?
Remember, even the OTeam seems to be treating this as a liquidity crisis. It’s not. It’s a solvency crisis.
Zandar
We’re assuming the stimulus plan not being able to work until 2011 will actually matter because the banks won’t collapse under several trillion dollars of losses and writedowns in the meantime.
harlana pepper
There’s a method to their madness – repube leadership and their buds won’t be satisfied until all us plebes and also the poor are worked, starved or frozen to death (or all of the above). Then they’ll just come down and scoop up the bodies with a tractor and dump ’em in a mass grave.
Reverend Dennis
I know how to mollify the Republicans. If it takes 100 men 100 days to repair a bridge we can just hire 10,000 men for the job and it will be fixed in a day – right?
B of A says it needs more money because Merrill Lynch & Co. is in worse shape than they thought it was. Due diligence: who needs it?
les
@Reverend Dennis:
Exactly, Rev. We’ve seen the Repub version–give everyone a one time pittance, give the "financial elite" hundreds of billions with no strings, and watch in amazement as nothing good happens. This creates income streams for wage earners, for years. What the fuck do they think recovery looks like?
TenguPhule
Since when have Republicans been right on anything?
Feebog
We have now been in recession for over a year. Throwing several hundred billion dollars did not quite have the desired effect now did it? It is going to take at least two years before we see any tangible results from any economic stimulus. IMO, how the remainder of the TARP funds are spent is more critical than the 800B recovery package. If a significant portion of the TARP funds can be used to turn around the mortgage crisis, then we will be taking the first step in turning the economy around.
mclaren
There, fixed that for you.
Seriously, there are a number of reasons to be concerned that the stimulus plan as currently described won’t work.
[1] Improving America’s broadband infrastructure is a key part of Obama’s stimulus plan, but the fact remains that American corporations are eliminating every high-paying U.S. white collar job as fast as they can outsource it overseas by broadband. So improving America’s broadband capacity is like cutting a much bigger hole in the bottom of a boat that’s already sinking.
[2] A lot of Obama’s stimulus package seems aimed at improving U.S. highway infrastructure, but out here in the real world of $140-a-barrel oil, the fact is that cars are going away. We need huge amounts of rail, but cars and buses just aren’t the future. Not with $4-a-gallon gasoline. James Howard Kunstler has written extensively about this, and no one seems to be listening.
What I incessantly refer to as the Happy Motoring fiesta is drawing to a close as we have known it, whether we like it or not. Cars will be around for a while, of course, but as an increasingly elite activity. The owners of cars will be increasingly beset by grievance and resentment on the part of those foreclosed from the Happy Motoring life — and it could easily degenerate to vandalism and violence, since the "right" to endless motoring was surreptitiously made an entitlement somewhere around 1957.
The "change" we face in agriculture dwarfs even the death throes of Happy Motoring (and is not unrelated to it either). A lot of people are likely to starve in America if we don’t get our act together pronto in terms of how we produce the food we eat. Petro-agribusiness faces a set of disturbances that are certain to induce food shortages.
James Howard Kunstler’s blog
[3] The Chinese economy is falling off a cliff. So they won’t be able to pull us out of this mess. America is functionally illiquid, so we have no capacity to pull ourselves out of this economic meltdown on our own…indeed, Obama’s entire stimulus program requires running sky-high trillion-plus-dollar deficits which depend entirely on the willingness of the Chinese and the Japanese to keep on loaning us colossal amounts of money.
Alas, China’s appetite for U.S. T-bill seems to be reaching an end. Without ever-continuing, ever-growing Chinese financing of seemingly endless American deficits as far as the eye can see, the U.S. economy is in real trouble. But if the Chinese economy is tanking like the Titanic going over Niagara Falls, as it seems to be, how can the Chinese keep pouring cash down the rathole of our increasingly-worthless T-bills which provide an increasingly low return?
[4] America suffers from a combined liquidity trap and credit crunch, a situation we haven’t seen since 1930 and which produced a ten-year-long collapse in Japan starting in 1990. Nouriel Roubini, who called the current financial meltdown, offers some suggestions for dealing with this one-two punch, but they aren’t pretty. Since we don’t have another WW II on the horizon to pull us out of this slump, even if the Fed and the U.S. government do succeed in avoiding complete collapse, there’s no guarantee that we won’t slump into a prolonged recession lasting much longer than the laughably optimistic 3 quarters currently forecast by economists who just 2 quarters ago claimed we wouldn’t even go into recession.
Japan did everything we’ve done, and it didn’t help. They wound up in a 10-year-long nightmare of stagflation. So far, nothing has stopped the rampaging worldwide collapse, as institution after institution has melted away, whole industries (the Big 3) have collapsed into dust, and the entire global trade network has effectively ground to a halt.
So far, none of the remedies tried have solved these economic problems, which multiply faster than economists can anticipate or correct them.
At present, there is no evidence to show that economists will be better able to anticipate and fix these exponentiating economic failures than they have in the past.
[5] Available evidence appears to show that once U.S. manufacturing industries go away, they don’t come back. America has effectively hollowed itself out, gutting its manufacturing capacity by shipping heavy industry overseas and concentrating on high-wage white-collar service industries. However, the most profitable of these service industries are now being offshored, and this leaves America with essentially nothing but a small percentage of super-high-end jobs for lawyers and doctors, and a vast mass of minimum wage service jobs for waitresses and xerox clerks and fast food cashiers. Obama’s stimulus program can do a lot, but it can’t reverse the laws of economics by making it cheaper to manufacture steel in America than in India, and it can’t make outsourcing a $75,000-a-year U.S. programming job to India more expensive, instead of a lot less expensive than the American programmer.
The main hope now is that Obama and the Democratic congress will have the flexibility and imagination to change course when it becomes apparent that this current stimulus package proves inadequate, just as TARP and the Paulson bailout and the Fed’s near-zero prime rate have so far failed. Paul Krugman has the same concern: he describes the current economic numbers as "terrifying," and worries that congress will take much too long to pass a stimulus package, which in any case isn’t nearly big enough.
J. Michael Neal
@mclaren: A lot of Obama’s stimulus package seems aimed at improving U.S. highway infrastructure, but out here in the real world of $140-a-barrel oil
Which real world is this that you are describing?
The Silent Fiddle of Nero
It might have if they threw it at a source that was going to actually, like, you know, uhhh…. USE it?
Rick Taylor
Economists like Krugman have said one of the problems we face is a lack of shovel-ready projects that will let us spend the money and get the economy moving as quickly as we want. He even said it was reasonable so support some tax cuts as a result. It means we definitely should be giving lots of aid to state government; allowing them to not make severe cuts is at least a quick way of not making the problem even worse.
Wile E. Quixote
@mclaren
Sorry dude, but you blew all credibility when you cited James Howard Kunstler, the man is a useless fucking twat, a pathetic leftover from the 1960s who keeps singing the same words but to a different tune. Don’t believe me? Read Kunstler’s predictions about Y2K that he made in 1999.
Kunstler is nothing more than a left-wing version of the right wingers who keep telling us that we’re all doomed because we don’t worship Jebus, abort fetuses and elected a half-breed Kenyan, Islamic Communist who wants to fuck our white women president of the United States. I mean really, you can tell the man is as much of an asshole at anyone posting over at RedState when he writes:
Kunstler keeps singing over and over again about the coming collapse of industrial civilization, the words change, as do the impending cause of the collapse (10 years ago it was Y2K, now it’s peak oil) but the song remains the same. The people who mindlessly repeat everything that Kunstler says and treat him as some kind of prophet are no better than the wingnuts who slaver over the Book of Revelations. Both groups are composed of misanthropic fucks who wish for some global apocalypse to kill everyone who isn’t on board with whatever idiot belief system they’ve bought in to. In the case of the wingtards it’s belief in Jebus, in the case of those who spout Kunstler’s bullshit it’s those nasty American consumers who, for some strange reason, don’t hanker for a return to the 90s, the 1690s that is, because the agrarian, communitarian society that’s chock full o’meaning that Kunstler yearns for never existed in the past and won’t exist if civilization collapses.
These sick fucks will piously declaim in public about the horrors of the tragedy to come, but in private they’re all jacking off about the day when they’ll be proven right and everyone didn’t listen to them will die a horrible and painful death. Want to understand these people? Go watch Taxi Driver and pay attention to Robert DeNiro playing Travis Bickle, these people are no different, and no less completely batshit insane, than Bickle when he says:
Bruce Sterling wrote a hilarious take down of some of the bullshit that Kunstler spouted in The Long Emergency but I think that the best take-down of apocalyptarian, survivalist bullshit was written by John Varley in his short story The Manhattan Phone Book (Abridged). It’s a quick read, but for those of you who don’t want to, here’s the ending.
mclaren
Kunstler’s claims certainly qualify as extreme, and I buy his more apocalyptic predictions.
That said, let me get this straight…
I want to be absolutely sure I understand you…
You are claiming that because some of Kunstler’s prediction are pretty obviously over the top, therefore we can:
[1] Continue to tool around in SUVs on 90-mile commutes from distant workplaces to isolated suburbs;
[2] Continue to grow food using monoculture oil-intensive agribusiness methods perfected during the 1950s and 1960s, when oils cost pennies per barrel;
[3] Expect that now that we’ve got a temporary respite from $140-a-barrel oil prices due to a gigantic fucking global depression, that from this point onward we can reasonably expect that oil prices will drop, rather than increase?
Is that what you two characters are claiming?
Really?
Seriously?
You are seriously claiming that we don’t have to worry about Peak Oil anymore just because…we’ve got a temporary dip in oil prices…?
You two are the best example I have yet come across that explains why America is in the situation it’s in right now. Instead of trying to explain how absurdly ignorant and foolish your claims are, all I can do is advise you to go back to driving around your 8 mpg SUVs and jetting around the country burning up JP-6 jet fuel and living in suburbia 30 miles from the nearest big box shopping center, probably in a part of the United States like Los Angeles where water has to be pumped over the San Gabriel mountains from a Colorado river that’s drying up due to declining snow packs from global warming, using humongous amounts of electrical power to run the pumps that get all that water to your faucet.
You two just keep on doing what you’re doing. You’re going to get one hell of an education over the next few years.
mclaren
Erratum:
Should be: "Kunstler’s claims are certainly extreme, and I don’t buy his more apocalyptic predictions.