2009 Atlasian Economic Relief and Recovery Bill (Law'd)

[Marokai Backbeat]

For the sake of debate on this topic, and debate we really really should have, I'm going to past a few of my previous posts on this topic.

There you go again Senator ignoring the negative consequences of your own actions. Those provisions risk a trade war at a time when our exports are falling and contributing to the growing unemployement, it would be the height of irresponsibility to pursue such a course. The Global economy is slumping and so there needs to be stimulus worldwide. The idea that you can isolate our economy would lead to a permenent Depression. Indeed the Smoot Hawley passed in 1930 jacked up tariff rates, a trade war ensued after which our exports plunged and Depression grew deeper. You want to help Manufacturing then invest in Technology, make our tax rates competative with foriegn manufacturers, and stop letting Unions drive them into the ground.

Okay, well, let's start off with something simple: You haven't a clue what you're talking about. For the sake of economic debate, I'll be referring to Atlasia as the US, using real-life statistics.

The global economy is indeed slumping and other countries have alot of work to do when it comes to stimulating our own economies. But the idea that I'm "ignoring the consequences of my own actions" is ludicrous. The U.S. (aka Atlasia) should not be stimulating the world on our own, other countries should stimulate their economies on their own. We can maintain trade, and make things easier for people to get into the market, but we need to be realistic about the real effect certain policies have on the economy, and, for one, "Buy Atlasian" ain't got nuthin' on Smoot-Hawley.

Smoot-Hawley jacked up tariffs to record levels (more than quadrupling them) on over 20,000 types of imported products and effectively choked off trade to Europe and other areas of the world very quickly. This provision does nothing of the sort and pretending it does is the height of ignorance. This clause of the bill simply mandates that a great deal of the manufacturing material involved in projects funded by the stimulus package will be created/manufactured from Atlasian businesses and workers, it doesn't stop other projects from being funded by foreign sources, it doesn't block foreign sources from doing trade with us in any other way, and it still allows a full 33% of stimulus project materials to be obtained from other countries.

Protectionism is never a great policy when it's the only solution, and raising tariffs is seldom a bright idea when it comes to fixing the economy or raising revenue, but this is neither serious protectionism nor tariff raising, nor any other sort of trade restriction. I'm baffled that you would even pretend that they're on the same level.

Manufacturing employment has been dropping for years now and during that time, our exports slow and our reliance on Chinese imports skyrockets. There's an interesting article from 2002 that talks about the history of our trade and manufacturing relations with China since the end of the 80s, "Between 1989 and 2001, though U.S. exports to China more than tripled, imports from China increased eightfold, causing a whopping twelvefold surge in the U.S-China trade deficit."

You might be thinking "Well, a drop in employment is understandable as long as output continues to increase." Not so in most cases. Manufacturing output as either stalled, or, as government statistics have shown of industrial output overall, has consistently, with blips throughout the rapid economic expansion after the fall of the Soviet Union, fallen lower and lower, and the overall peaks of industrial output have been less strong with each peaking. (These are less broad and somewhat unrelated, but California and Nebraska manufacturing employment numbers are somewhat startling.)

My point is this, our reliance on Chinese imports is hurting our industry and our ability to manufacture and to export. Free trade generally does increase jobs in certain sectors, but this is often at the expense of our manufacturing output, and we can't keep ignoring our ability to manufacture in favor of pencil pushing and service management jobs. The "Buy Atlasian" Provision makes it so we mandate a small portion of our overall manufacturing work be produced and done in Atlasia by Atlasians, and gives our manufacturing sector a much needed boost. Protectionism, in small doses as to not choke off trade or offend other nations, is not always a bad thing. Nations need an element of self-sufficiency.

And this ties into the argument for temporary nationalization of the 3 Auto-Makers. The success of the "Big 3" is not only an economic concern, but a concern of national security. These auto-makers often provide quick support for the military when materials and army trucks, jeeps, and even tanks and artillery are needed. These security demands increase our industrial production and manufacturing employment (which is, consequently, another contributor to the unusual freeze of manufacturing employment throughout the 90's, because of every other decade experiencing falls since WWII) and made sure that we could always rely on ourselves rather than other nations in fighting our wars.

There are, of course, obvious concerns economically as well. We could lose millions of jobs in the auto-making industry alone if we do nothing, not to mention the additional millions of jobs that are indirectly dependent on that sector.

Moving on to your other (asinine) points, taxes are often overblown, and there's only so long we can whine about them. The taxpayer is now dealing with one of the lowest tax burdens in decades and other tax hikes, such as FDR's during the Great Depression, Reagan's during the period of economic expansion under his two terms, and Clinton's in the first year of his term (which were surprisingly broad, by the way) all had no noticeable negative effects on the economy. Especially Clinton's, which Republicans said would kill jobs, did nothing to stop the 23 million jobs created under Clinton's tenure.

Business taxes can be lowered, sure, we do have one of the highest (and some things put it at the highest) business tax rate in the world, but we should caution ourselves from just taking a hatchet to the business tax rate. Something like that is neither responsible, more effective than modest cuts, nor just economically sound at all. Permanent tax cuts are often bad, bad economic stimulus, and slashing the business tax rate has almost no sensible economic efficiency on the dollar in comparison to other measures we could be taking. These tax cuts are modest and A) More psychological than seriously impacting, which does matter. And B) Designed to focus on very small businesses where tax cuts have a more sensitive effect.

Your union bashing is similarly dumb. Sticking to the topic of manufacturing work in auto-plants, non-unionized foreign auto-plants are very competitive with US-unionized plants in terms of pay. There is no union-bashing to be done here, just business mismanagement. If you take a closer look at the numbers provided as comparisons, the major difference between the two are legacy costs which, dumbed down for you if you're too lazy to check the link, are things like pensions, healthcare benefits for retired workers, etc.

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This is, further, an argument that government management can bring forward the necessary changes that throwing money at the auto-makers, as we've done for many years now, could be the best bet we have towards properly restructuring their businesses and bringing forward a new American/Atlasian auto industry which is essential in more than a few ways. Simply, this has nothing to do with unions, just bad business decisions from the past and incompetent management. Stop with the knee-jerk union-bashing.

[Marokai Backbeat]

The stimulus "isn't stimulating" because it was too small and compromised too much of tax cuts (or rebates, or breaks, or whatever semantic game you want to play) and didn't focus enough on the critical projects and safety-net programs that are incredibly effective in this area. I've explained this before, and I'll quote myself from another thread here just to repeat myself.

(By the way, some of the assumptions in this article are just flat wrong, unemployment insurance is incredibly effective and stimulates the economy efficiently, as food stamps do, and not all projects take years to plan. If you're building a dam, obviously it's going to take awhile, but there are alot of projects out there that can be done right now, or have stalled out due to lack of funds. There's also no shame in planning & building alot of projects for the future economic benefit.

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We've accomplished a great deal in a short time with past infrastructure projects such as the WPA, and it's all possible again, if we actually created large programs such as this to do it, and poured alot money into a very sensible and direct Administration. Remember, we're not designing a thousand freedom towers. We could be digging ditches, repaving roads, repairing and rebuilding schools, finishing already-existing projects, and so on. These are stimulative not only now but forever.)

The stimulus will take time to come into full effect (construction projects are getting started in many areas of the country right now, and I've personally seek the increase in some safety net benefits like unemployment compensation and food stamp increases) however it's important to keep in mind that it was probably woefully inadequate.

Government spending is the most efficient way in these times (in one way or another, usually target spending or goods and services directly, accompanied by public works projects) and if the spending is kept under a certain limit pretty much "just because" and hampered further by tax cuts (or rebates, whatever you prefer, they are in effect, tax cuts) which, according to the Wikipedia article, amount to a whopping 37% of the bill, essentially leaving us with about 45% for direct spending, and 18% for aid to the states, which as I've explained why in the past, is critical.

Unfortunately we skimped on some of the most important aspects of government stimuli. Education (paying more people to stay involved and prevent cutbacks), infrastructure (roads, bridges, schools), welfare (food stamps are one of the most, if not THE most, effective safety net program we have running, unemployment compensation is similarly effective) and so on. If you get down to the specific provisions, only 82 billion is spent on the safety net (leaving out medicare) and only 51 billion are spent on "core" infrastructure projects, things like bridges, roads, etc.

Some of THE most important and critical government stimulus amounts here to only 133 billion! If you look where the individual payments are going, less than 20 billion is going to food stamps! That's right, the most effective program for stimulus is receiving a paltry 19 billion dollar increase. That should have been, and could have been, easily doubled. Similarly, unemployment benefits, the second most effective on our list, could have been doubled, being originally placed in around 40 billion dollars and 25 dollar increases in benefits.

Infrastructure projects in the stimulus don't amount to much in the fine print either. Quite frankly, the entire plan for infrastructure spending should have been quadrupled. Less than 30 billion for highway and bridge construction, a pitiful 8 billion for railway construction and development, and more disappointing investments in infrastructure. Infrastructure projects are another important component on our list here, and have the potential, as was done during the New Deal under the Works Progress Administration (a model we should replicate) build an infrastructure for future prosperity, and improve public transportation to lessen the burden on individuals paying ever rising gas prices.

Other minor investments could have made a big difference in people's lives, such as greatly increasing the amount of money for free lunch programs at schools, which I also know from personal experience is a substantial drain on a family's resources when lacking it. Tax relief, while certain tax relief measures are stimulative, are not that effective because the general strength of a tax cut or a rebate isn't a long term benefit or isn't strong enough to make a big difference in an individuals like, but could, collectively, cause a great deal of harm to revenue coming into the federal government. I think Verily explained quite well in this thread why tax cuts aren't effective stimulus, so there's no need for me to explain that here. Even if, for the sake of argument, we were to conclude that tax relief is somewhat effective if you do it right, other measures are still far more effective on the dollar. The main problem with tax cuts though, is that it's not a targeted relief measure, so it usually just goes to paying off a minuscule portion of an individual's debt or to some sort of useless entertainment source.

In any case, I'm ending up rambling now. There are a great deal of solutions that could help and past models to look to for advice on what to replicate today, but sufficed to say, the stimulus could very well fall flat on it's face and do little to nothing because alot of the money was either A ) Insufficient for the targeted projects to make an impact, or B ) Not targeted at all, often in the form of some sort of tax relief that goes to a useless source. Tax relief measures should have been stripped from the stimulus almost entirely and direct spending on the safety net and infrastructure projects beefed up to include the vast majority of a nearly 1.5 trillion stimulus bill. It's a shame. I remain cautiously optimistic that it will have some sort of impact, but I'm not seeing it so far, and I fear we may has wasted a ton of money because we didn't go nearly as far as, say, the New Deal projects went.

[Marokai Backbeat]

I really hope people are sensible enough to participate in the debate around these issues and don't just have knee-jerk reactions or post one-liner nothings. This is serious, and a subject I feel most passionate about, so I really will be disappointed if my colleagues ignore critical issues in favor of talking points or blathering nonsense.

So let's debate these issues on their points, individually, and work to create a real stimulus bill that doesn't waste money and will actually get the job done. I'm pretty sure most of you are smart enough to handle that.

[Marokai Backbeat]

I'm willing to compromise on the nationalization of the auto-industry, but I'm not willing to compromise on "Buy atlasian." The only thing I'm willing to do is include an exception for Canada, because of our proximity and the fact that we share many businesses and workers.

As for the "OMG PROTECTIONIZM" tirade. I've said it before and I'll say it again:

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It would take a huge leap of faith to assume the world will suddenly engage in protectionism because of a small requirement for a narrow set of projects. Of course, given that our game moderator is Brandon, anything is possible I suppose.. But in the real world..

[Marokai Backbeat]

Well but why? Our own companies will be put at just as big of a disadvantage when/if other countries enact their own stimulus packages?

Shouldn't the work be done by the company that offers the best quality and price? Why can't we force Atlasian companies to actually compete instead of just relying on friendly government policy?

This is a stimulus bill to stimulate/jump-start our industries and give relief to our unemployed workers. (And our weakening manufacturing sector) We rely too heavily on imports from other countries, such as China, and increasing that reliance, especially in these times, is not a bright idea. This is small potatoes in the grand scheme of things.

[Marokai Backbeat]

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How many times have I explained this to you? Are you getting dumber? I don't even know if I should bother anymore.

[Marokai Backbeat]

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How many times have I explained this to you? Are you getting dumber? I don't even know if I should bother anymore.

You shouldn't insult my intelligence, Marokai. It will get you know where. Yes it is no where near Smoot-Hawley, but that doesn't matter. What matters is peception, and if foreign countries believe we have taking a protectionist route, no matter how small, the effects could be devastating. You still refuse to admit the possibility that this is counterproductive. Just because "on paper" your Buy Atlasian provisons are small and should have little to no effect in theory, doesn't mean that they won't in practicality.

How do I respond to someone with their head in the clouds? Any policy we take could be take could be interpreted in 500 different ways and any country could respond with 500 more actions. This can't be helped. What matters is that we stick to the real world and recognize that this is small and drop the retarded "IT'S SMOOT-HAWLEY 2.0!!!!!1" rhetoric.

We had a similar, much more strict provision in the actual stimulus bill. All it did was piss off Canada a little, didn't do much else. (Include an exception for Canada, bam, problems solved.)

[Marokai Backbeat]

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How many times have I explained this to you? Are you getting dumber? I don't even know if I should bother anymore.

You shouldn't insult my intelligence, Marokai. It will get you know where. Yes it is no where near Smoot-Hawley, but that doesn't matter. What matters is peception, and if foreign countries believe we have taking a protectionist route, no matter how small, the effects could be devastating. You still refuse to admit the possibility that this is counterproductive. Just because "on paper" your Buy Atlasian provisons are small and should have little to no effect in theory, doesn't mean that they won't in practicality.

How do I respond to someone with their head in the clouds? Any policy we take could be take could be interpreted in 500 different ways and any country could respond with 500 more actions. This can't be helped. What matters is that we stick to the real world and recognize that this is small and drop the retarded "IT'S SMOOT-HAWLEY 2.0!!!!!1" rhetoric.

We had a similar, much more strict provision in the actual stimulus bill. All it did was piss off Canada a little, didn't do much else. (Include an exception for Canada, bam, problems solved.)

Yes lets come down to the real world and not take the risk. May you please cease with those insults I have yet insult you, just criticized your policy making abilities. Please top taking to the next level up.

You have at least admitted that this could be interpreted differently by foreign countries, thats a start.

The problem is you're dreaming up fantasy scenarios with no basis in reality. You argument is "It could be a problem to others, I dunno how, but it could be. It could be like Smoot-Hawley, but I'm not comparing them or anything!"

We did this already in the stimulus bill, and it was a much stricter provision, and it didn't result in the crashing of global trade or a wave of protectionist policies. Your fantasy scenario has yet to realize under harsher conditions in the real world.

[Marokai Backbeat]

You still have you're head in sand and you're not listening to what I'm saying at all. Your fantasy scenario has not come to pass under more severe real-world circumstances. Your little line about free trade is completely incoherent. I'm open to trade, I believe trade is absolutely essential. And, as I've said, I'm open to an exception with Canada, one of our largest trading partner and a country that shares many businesses with us and treats it's workers fairly.

I'm proposing something open to compromise with Canada, less strict than something that was actually proposed in the United States, and yet you're still claiming economic armageddon or a great trade war. It's nonsensical.

Don't forget that our disagreement here is over 3 lines in the whole bill, and one section. I am in support of 75% of this bill.  Would you be willing to say include Britain, Australia and the EU along with Canada in the exemption? I might be open to compromising a little provided you give a little two.

Canada, Canada only. I'll vote against the final bill if it goes any further than that, another Senator likely will as well.

[Marokai Backbeat]

Obama and Clinton also talked about renegotiating NAFTA during the campaign. Both are now President and Secretary of State. It doesn't matter what people say, it matters what people do. There are protectionists and free-traders in Government, it only matters what we do. No one here is advocating tariff increasing, cutting off all trade agreements, or anything else. Your rationalization is really mind-boggling.

Republicans during the 19th and early 20th century were very protectionist when it came to tariffs and American manufacturing, the economy got worse once they implemented uber-protectionist policies. The connection you make between international reaction and protectionist PEOPLE requires complete suspension of critical thinking and an ignorance of all empirical evidence.

As for Canada, I'm open, and in fact favoring, an exception with them because of our proximity to them and the fact that due to that proximity we often share the same businesses and workers often come and go through each country. Also, Canada has a long history of fair and developed work standards, so I don't fear sharing something like this with a close and developed trading partner on the same continent.

[Marokai Backbeat]

Well, no, I see no point in debating someone who is too thick-headed to realize what they're saying makes no sense and flies in the face of empirical evidence.

This amendment has my complete opposition, if it passes I will vote against this bill and I hope the President vetoes it. It completely undermines the point of stimulus.

[Marokai Backbeat]

Internal investment is best, but we need to make sure we are getting the most for our money with this package. Spending far too much just so we can pay an inefficient American contractor doesn't allow the bad companies to die. So, rather than simply repealing the "Buy America" clause, how is this?

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I think this is acceptable.

[Marokai Backbeat]

Internal investment is best, but we need to make sure we are getting the most for our money with this package. Spending far too much just so we can pay an inefficient American contractor doesn't allow the bad companies to die. So, rather than simply repealing the "Buy America" clause, how is this?

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I think this is acceptable.

I am leaning towards accepting this and withdrawing mine, however I shall need to ponder it for a short while. In the mean time, Marokai, would you be willing add a section dealing with the credit crisis or would prefer to do that in a separate bill?

Compromise ain't so bad, eh?

I think a separate bill for the credit crisis would be in order.

I do think that this bill is far too small. I would like to see it reach closer to $1 trillion, with the added expenditures all placed in the Infrastructure Investment section.

I too favor a separate bill to deal with the credit issues. And I'm in agreement it needs to be expanded, have anything in mind?

[Marokai Backbeat]

I agree with the spending proposed by NC Yank, in addition to a massive alternative energy construction funding.

And should we build massive wind farms and arrays of solar panels throughout the deserts, who would get ownership of these things and the electricity they produce? I would prefer the creation of government-owned utilities..

[Marokai Backbeat]

I agree with the spending proposed by NC Yank, in addition to a massive alternative energy construction funding.

And should we build massive wind farms and arrays of solar panels throughout the deserts, who would get ownership of these things and the electricity they produce? I would prefer the creation of government-owned utilities..

I think partnerships would be appropriate. What is the incentive for private organizations to establish these things if they don't profit? It would also, long-run, greatly expand the government's expenses to run these things. We need to promote private innovation and construction, but possibly in a joint venture with the government until our share is bought out.

I see your point, but we still retain things like the Tennessee Valley Authority, which has remained a fair and competitive government owned power company, and there are other renewable examples to look at, like Hydro-Quebec, as successful programs that are incredibly innovative.

[Marokai Backbeat]

As Lt. Governor of the Dirty South, I strongly urge all senators to vote against this bill.

I appreciate your lengthy and detailed imput. I'm terrified of the influence of your office.

[Marokai Backbeat]

As Lt. Governor of the Dirty South, I strongly urge all senators to vote against this bill.

I appreciate your lengthy and detailed imput. I'm terrified of the influence of your office.

So statesmen cannot give their opinions on legislation? Especially when they might be joining your chamber in two months?

Then I want your opinion on the legislation, not "vote against it! bad bad bill!"

[Marokai Backbeat]

Nay. We have a completely reasonable alternative.

[Marokai Backbeat]

That certainly has my complete support. Clause J, especially, as that will include purchases from Atlasian auto-makers.

[Marokai Backbeat]

Let me just point out that we are currently tied at 4-4 because afleitch is away and Fritz is not yet sworn in (can someone explain why that is? is the election not yet closed by the SoFA?). Wouldn't a proxy vote system have helped us a lot in such a situation? Hmm...

No.

[Marokai Backbeat]

Aye, happily.

[Marokai Backbeat]

I'm fully in support of this amendment, as I do believe it's essential to have a large a robust infrastructure portion of the stimulus. It puts people to work and builds an infrastructure for future prosperity.

I do wish we could give preference to General Motors when it comes to military equipment and/or vehicles, but all in all, good stuff.

[Marokai Backbeat]

Some states have HEAP (Home Energy Assistance Program) which assists low-income families with their heating bills, my state included. Perhaps we could make that a national program?

[Marokai Backbeat]

Some states have HEAP (Home Energy Assistance Program) which assists low-income families with their heating bills, my state included. Perhaps we could make that a national program?

All we got here I think is the federal program LIHEAP. It was small and pretty useless $180. Considering we don't have a heating system and use a combo of Electric heat and Karosene, our Energy costs for the winter probably exceeded $1500, if not more.  Consider that with only one parent able to work and he is on Unemployement which is about $1200 per month. Well you can see where this is going.

Whatever we do it has to be adequately funded and give enough assisstance to really make a difference. As I said there is also the Hurricane season and most of the "Crisis Funds" are exhausted meaning no dough for even those who haven't maxed out since there is none to dish out, those funds definately need to be replenished as well. We should consider rasing the limit for those people like myself who have reached the limit and will thus be screwed when the Winter Electricity bills come in.

Well, first of all, I feel a little embarrassed that I had no idea this program actually did exist in limited form nation-wide. But you're right and bring up an excellent point, perhaps we should double, even permanently, these energy assistance programs, and scale it down as we hit the income limit. (Which should be expanded.)

Was the $180 a monthly or one-time payment? Do you know any specific numbers? I'll try to get some information out of Ohio's energy assistance program and maybe we can put an improved program together.

[Marokai Backbeat]

Aye