Question for Michelle Obama

[Anonymous]

Anonymous wrote:Government - 100% efficiency! Wow!

It's true. Everything turns into a paycheck to employ someone who is going to produce something and is likely to spend the money they would not otherwise have because the job did not exist. You may not feel like it is the best thing over the long run because the market should decide where capital is best spent. But if you give the money in the form of tax breaks (the alternative), a very large percentage of that money will be saved. That's good in the long term, but it is not stimulus because it does not produce immediate results. I know it is difficult to swallow, but stimulus is measured in the short term. You hope that it is not for digging ditches and filling them up, but rather building bridges that we needed anyway. The truth is in the middle, but it is immediate stimulus nonetheless.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Government - 100% efficiency! Wow!

It's true. Everything turns into a paycheck to employ someone who is going to produce something and is likely to spend the money they would not otherwise have because the job did not exist. You may not feel like it is the best thing over the long run because the market should decide where capital is best spent. But if you give the money in the form of tax breaks (the alternative), a very large percentage of that money will be saved. That's good in the long term, but it is not stimulus because it does not produce immediate results. I know it is difficult to swallow, but stimulus is measured in the short term. You hope that it is not for digging ditches and filling them up, but rather building bridges that we needed anyway. The truth is in the middle, but it is immediate stimulus nonetheless.

Yikes, I wish what you said were true but I can't let the statement "everything turns into a paycheck to employ someone" go! I think this is an incredibly naive statement!

[Anonymous]

As much as I personally would like a big tax cut I have to agree that tax cuts are not the right out this time. In a good economy, you have the risk of people saving the tax cut or investing it in areas where it does less good. In a bad economy, I would suspect that this is even more the case. It would be really interesting to know if economists are in any way partnering with market researchers to understand the true psychological dimensions and impacts on whether someone will part with their discretionary dollars.

DH and I do not live on or draw from our assets nor will we need to for over a decade. We have no plans to move in the next two years. We live within 2 pretty good sized salaries neither of which has changed. Our jobs are pretty secure and we have seniority. With all of the news on the economy though we have drastically changed our spending habits. We decided against buying a new car, replacing our carpet, and a few appliances we were considering purchasing. We've been very careful to save more and with each news report of layoffs even though we shouldn't be affected we get more nervous. Any tax cut we receive would go straight to savings. I suspect many people would do the same.

The same dynamic has been occuring in companies. Many industries that are less reliant on direct consumer purchases are also building up cash reserves, cutting any slack, and doing pre-emptive layoffs. Contracting areas are now only staffing when a direct contract is in place which is different than a few years ago when they were fighting to hire enough to keep up with future projections.

The only way to really to guarantee the money goes back into the economy is through spending projects that create a direct project requiring services, materials and labor. If this can curb the constant layoffs fast enough it will help. There also have been industries that have been disproportionality been affected and a tax cut is not going to resolve that problem.

Some federal spending actually helps keep the states out of bankruptcy or raises taxes in way that would have more serious affects on their areas and then the economy as a whole

[Anonymous]

jsteele wrote:

Anonymous wrote:My question to the first lady is what does she suggest we do with our $13 per week ($8 come next January) to stimulate the economy?

She probably doesn't suggest that you do anything. Tax cuts were primarily put in to garner Republican support (and little good it did). Tax cuts are an inefficient stimulus method. Direct government spending is better. Hence, the majority of the bill is spending. The Republicans would have liked the entire bill to be tax cuts. If that were the case, you would be justified in complaining about your meager $13 per week. However, thanks to the spending, some people without jobs will get jobs and some people with jobs will keep them.

It all sounds very good. There is one little question" where will Obama get the 800 billion dollars from?