U.S. funding for future promises lags by trillions

[coyotes_geek]

This 'correction' might be for the economy right now, but it's not in itself a bad thing, IMO. Ultimately, it should eventually lower lending enough.

But that's exactly why I think direct government job creation would work much better, and as I said earlier, infrastructure could be a great target.

Agree on both counts. Lowered taxes certainly can provide long term benefits to people, but it just doesn't make for an effective short term stimulus solution IMO.

[Winehole23]

I agree. There are definitely going to be long term benefits to household deleveraging.

If so, why would you now have us rule out any further helping out of fellow Americans with respect to their household debt, even if via politically timed and executed stimulus?

[Winehole23]

Reducing the number of households living paycheck to paycheck should also make it a little harder for bad economic news to spook the populace.

God I hope you're right about that. The bad economic news ain't even arrived yet.

[coyotes_geek]

If so, why would you now have us rule out any further helping out of fellow Americans with respect to their household debt, even if via politically timed and executed stimulus?

The short term benefit is minimal to non-existant and the long term benefit still comes at a price. Tax breaks can help out households individual financial situation in the long run, but the tradeoff is that it only makes an already huge gap in en lement programs even bigger. There's already a $534,000 per capita gap between promised benefits and estimated revenues that needs to be reconciled through some combination of benefit cuts & tax increases. Cutting taxes only makes that number bigger and brings us closer to the day where we'll no longer be able to put off making a decision.

[Winehole23]

the tradeoff is that it only makes an already huge gap in en lement programs even bigger.

A lot of somebodies want to make that trade. Larry Summers made a big noise about it today.

[Winehole23]

Then there's everyone else who stands to get 50 gold pieces from Caesar.

[Winehole23]

The short term benefit is minimal to non-existant and the long term benefit still comes at a price. Tax breaks can help out households individual financial situation in the long run, but the tradeoff is that it only makes an already huge gap in en lement programs even bigger. ... Cutting taxes only makes that number bigger and brings us closer to the day where we'll no longer be able to put off making a decision.

No need to feather it out in a depression?

Can't the rough stuff be put off a year or two while everyone muddles through and pretends to be whole? When's the drop dead date?

[MannyIsGod]

In fairness, 2cents specified its appropriateness of this at ude for recessions. Not at all times.

Here in lies the biggest problem with stimulus. Not in stimulus itself, but how/when it is used and the timing of people pointing to it as a problem.

[MannyIsGod]

What if it was a $5000 check?

I would spend it then, but the inflation that would result from a 5 trillion dollar stimulus would probably be counterproductive.

[MannyIsGod]

Way too isolated and slow. The best stimulus
Is a payment of about 300 per month to each working
Individual for the next 24 months.

We have a customer problem in this economy.
Time to help the customer. We will see a trickle
Up affect.

There's a reason why unemployment benefits are some of the best ways to spend stimulus. That being said, I don't want to see 300 dollars for 24 months going to everyone in this country. That will simply be government subsidized consumerism which has far greater ramifications on the levels of consumption our country has which are flat out unsustainable.

[MannyIsGod]

Look at wage growth, retail sales, household debt and household savings over the last three years. For all the attempts we've made to put more money into consumers hands ($600, making work pay, SS rate cut to 4.2%, etc) all we've got to show for it are declining retail sales, an increase in the household savings rate and reduced debt per household. All this despite a 15%-20% chunk of the population who isn't in a position to reduce debt or increase savings because they're unemployed or underemployed. The combination of all those events certainly suggests to me that there are far more people pocketing their extra money than there are people spending it.

I don't think that necessarily means they're not spending the money. Its more symptomatic of how big the problems we are facing are and how unsustainable the level of consumption we need for growth is.

[Capt Bringdown]

There's a reason why unemployment benefits are some of the best ways to spend stimulus. That being said, I don't want to see 300 dollars for 24 months going to everyone in this country. That will simply be government subsidized consumerism which has far greater ramifications on the levels of consumption our country has which are flat out unsustainable.

Unemployment benefits yes. Money to folks who already have jobs, no:

Is a payment of about 300 per month to each working
Individual for the next 24 months.

A very dumb idea.