Can someone explain why this is called a "stimulus"

[dude1394]

Shamulus....about right...And it should be killed immediately.

http://www.ibdeditorials.com/IBDArti...1&show=1&rss=1

As Stimulus Fails, It's Time For Plan B

By INVESTOR'S BUSINESS DAILY | Posted Friday, June 05, 2009 4:20 PM PT
Economy: Businesses shed another 345,000 jobs in May, about half the number expected. Meanwhile, the stock market has risen in 12 of the last 13 weeks. It looks like the "green shoots" are here — no thanks to the stimulus.
Read More: Economy

As we've been saying for months, the economy was due to turn around — with or without the stimulus package that was passed Feb. 17 amid much hoopla.

Recall that, at the time, the main selling point for the $787 billion stimulus package was that it would rapidly inject massive amounts of money into the economy through thousands of "shovel ready" projects just waiting to start up.

Nothing of the sort has happened. It's been a slow, grinding, bureaucratic mess, with few results.
So far, just $43 billion in stimulus money has been spent. As we've noted, that's nothing in a $14 trillion economy, and certainly not enough to account for the modest signs of recovery we're seeing.

The official government Web site, recovery.gov, said right after the stimulus was passed that it "will save or create good jobs immediately." And the chief White House economist in January predicted that unemployment would top out at 8% if the stimulus were passed. Well, we've lost 1.5 million jobs since the package was signed, while unemployment has hit 9.4%, a 25-year high. Enough said.

Weirdly, the White House on Friday announced tentative plans to appoint a "jobs czar" to oversee pay at companies taking bailout money. Shouldn't you wait until some jobs are actually created before creating a czar to monitor pay? Or is this just another attempt at controlling the private sector?

In a word, Washington's "stimulus" is a sham. It's a shamulus. It's as big a fraud as any perpetrated in recent years, cynically passed to take advantage of Americans during a time of economic panic and fear. Worse, it was falsely sold as stimulus when in fact it was a permanent expansion in government spending.

Within two years, federal spending as a share of GDP will have risen from its long-term postwar average of 20% to 22%. But that's nothing. Within 30 years, according to some estimates, that share will double to more than 40% as the baby boomers retire by the tens of millions, making new demands on the public fisc.

Right now, the economy appears to be modestly on the mend. May's shrinking job losses are just another indicator. It looks unlikely, however, that we'll have the kind of robust recovery that typically follows a sharp downturn, like the one we've had.

The U.S. government has pulled off an economic version of shock and awe, taking over major industrial companies, seizing control of banks, printing trillions of potentially inflationary dollars, bailing out failed enterprises, and threatening to impose trillions of dollars in new taxes on workers and businesses in the coming years.

All this destroys what John Maynard Keynes called the "animal spirits" of the economy. It's exactly why we face the prospect of a slow recovery — one that might just be the slowest on record since World War II. Instead of the steady 3%-plus long-term GDP growth that the Fed forecast just a few years ago, many economists — including the Fed's — now think GDP growth will be more like 2%.

It's time to recognize the stark reality and change course. Fast.

The stimulus hasn't worked, and it won't. It should be killed off. Just throw it in the garbage, and apply the remaining $700 billion or so to cutting the expected $1.8 trillion deficit this year. Or to cutting taxes across the board. Either would be better than "stimulus."

Meanwhile, to improve our long-term growth rate — which will make us all richer, and even ease the government's fiscal strains — there are lots of things that we could do. Here are just a few:

• Free trade. Immediately approve free trade deals pending with Colombia, Panama and South Korea. This would give U.S. firms billions in new orders and create thousands of new jobs — right away.

• Tort reform. Rampant lawsuits cost this country an estimated $600 billion to $800 billion a year, or about 5% of GDP a year. Trimming this back even a little bit would yield big results.

• Regulatory reform. Wayne Crews of the Cato Institute estimates that U.S. consumers and businesses pay $1 trillion or more for our regulations. Even modest deregulation could potentially yield hundreds of billions in benefits.

• Tax cuts. Current budget plans already see a nearly $1 trillion tax hike over the next decade to help pay for ambitious spending plans. Other tax hikes — a cap-and-trade tax, a health care tax and a European-style value-added tax of 10% — loom as very real possibilities. These will sink the economy. Cut taxes across the board instead, sit back and watch the economy grow.

We have lots of other ideas that we'll be discussing in coming weeks. The point is, we don't have to sit on our hands and wait for things to get worse. We know what works. Let's get cracking, before we do serious damage to our economy and standard of living.

[Mavdog]

this is good news.
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10 big banks get OK to repay $68B in bailout money
By MARTIN CRUTSINGER and DANIEL WAGNER, AP Business Writers Martin Crutsinger And Daniel Wagner, Ap Business Writers


WASHINGTON – The Treasury Department has approved 10 of the nation's largest banks to repay $68 billion in government bailout money.

The department on Tuesday said the banks, which were not named, will be allowed to repay the money they received from the $700 billion Troubled Asset Relief Program created by Congress last October at the height of the financial crisis.

The banks have been eager to get out of the program to escape government restrictions such as caps on executive compensation.

Among the banks that passed government "stress tests" last month and likely were approved to repay the bailout funds are: Goldman Sachs Group Inc., JPMorgan Chase & Co., and American Express Co.

Experts say allowing 10 banks to return $68 billion in bailout money illustrates some stability has returned to the system but caution that the crisis isn't over. Some worry the repayments could widen the gap between healthy and weak banks.

More than 600 banks nationwide have received nearly $200 billion in TARP money and 22 smaller banks already have repaid it.

"These repayments are an encouraging sign of financial repair, but we still have work to do," Treasury Secretary Tim Geithner said in a statement.

The firms now have the right to purchase the warrants Treasury holds in their firm "at fair market value." Besides Treasury's potential income from the sale of the warrants, the 10 banks already have paid dividends on the preferred stock totaling about $1.8 billion over the last seven months.

Dividend payments received for all participants are about $4.5 billion to date, according to Treasury.

Northern Trust Corp. was not among the 19 banks subjected to stress tests, but that company also was in line to receive repayment permission, according to two industry sources with knowledge of the matter who requested anonymity because they were not authorized to discuss it.

The push to repay the funds comes a month after "stress tests" of the nation's 19 largest financial firms found that 10 needed to raise $75 billion more to protect against future losses. All of those banks, including Citigroup Inc. and Bank of America Corp., had submitted plans by late Monday to bolster their capital cushions that were enough to help them survive a deeper recession, the Federal Reserve said.

The other nine institutions had to prove they could raise enough private capital without federal guarantees before they could return the money.

So far, 16 of the 19 banks have raised $75.2 billion, mostly by selling common stock.

Regulators want to avoid letting a bank repay its TARP money only to have it return months later in worse shape, seeking another handout.

[Flacolaco]

There's something kind of odd about the concept of needing permission to pay back money.

[dude1394]

Now this makes some sense to me. Although it might pick winners/losers (silicon, software, cisco)...it would be an infrastructure mission that the guvment would not undertake.

Roll out broadband infrastructure much like our interstate highways. Perfect thing for the guvment to invest in.

June 13, 2009

Anti-Recession Fiber Internet for Multi-Trillion Boost to the Economy


High speed fiber internet is being implemented with greater speed and higher penetration around the world than in the United States. The 5-10+% [700 billion to 1.4 trillion per year initially] boost to the GDP that would come from 100+mbps symmetrical access would quickly pay for initial subsidies. Implementation by say Japan means that other countries the United States could also have them by adjusting policies and rules to prevent incumbant companies and groups from blocking successful rollout. The first example is super-broadband. The economic benefits for super-broadband have been shown. It is to the benefit of a economic benefit of country and its people to enable super-broadband (at least 100 mbps both up and down). Having a system set up that slows and prevents this rollout is stupid.

[dude1394]

But this....not so much sense...but o' so expected.

Reporting from Washington -- It is a six-mile stretch of guardrail near a manufactured lake in a desolate patch of the Oklahoma Panhandle. There's little reason for anyone to visit. Weeds are overgrown; the lake bed is virtually dry.

Yet repairing the guardrail is on a list of projects developed by the U.S. Army Corps of Engineers to tap into President Obama's $787-billion economic stimulus program.


The price tag: more than $1.1 million.

As Obama moves to accelerate the flow of federal stimulus funds, public officials are voicing concerns that some of the projects being devised are of dubious merit.

[dude1394]

I want one of these jobs!!

Only $1.3 Million Per Job

One presumes that Joe Biden drew the short straw on this one. The Obama administration today admitted - via Joe Biden - that the “stimulus” plan was not working and that it would only “create or save” some 600,000 jobs - as opposed to the promised 3.5 million jobs.