Missouri to use Stimulus Money to Cut Taxes

[Torie]

Sometimes I wonder if they're actively trying to destroy the economy.

It is just handing out money to folks, this time with a lateral pass to a state first, rather than coming directly from DC. I don't quite see why that per se would have a negative economic effect. Is Jefferson City that toxic?  I would think handing out money to folks (and yes, consumption tax cuts as noted by sbane probably in the short term would give a greater bang - who cares anymore about the long term?), would help the economy more than spending money on some government infrastructure project or whatever. Granted, perhaps neither will help much. We shall see. Sam tells us to be patient, and he's right!  

[Torie]

Good. This is a better use of the money. Let the American people have the money, what's wrong with that?

because the people aren't as likely to spend it during this economic crisis, which results in a lower eonomic stimulus than targeted investments by the government (in theory at least).

Ya, except when the government actually tries to do stuff itself, well some money for some reason just tends to get "lost" somewhere. It is kind of like a tax. It is "cheaper" to just send the money straight into the wallets of the local denizens, don't you think?

[Torie]

Good. This is a better use of the money. Let the American people have the money, what's wrong with that?

Money is more efficiently spent in public projects or distributing goods and services to the public. How many times must we waste money on rebates and/or tax cuts for people to realize they are not effective?

Why is distributing goods and services "effective," and distributing cash money not, assuming it is not going to some rich Republican to put under the mattress or something?

[Torie]

I believe in the individual good, not the collective good.

Perhaps it is time for a meditation.

[Torie]

I think all that stimulus  money should go to the forumites here myself. Most of you are basically impecunious at this juncture , and would spend the money in a flash, no?    And think how much happier all those women BRTD patronizes would be to boot!

Some of this is short term versus long term. Consumption helps in the short term, but the debt servicing costs down the road, just makes that particular anchor a bit heavier. If money is not spent on consumption, but invested, it gets "spent" down the road as bricks and mortar is laid down upon the Fruited Plain, and assists in making the economic system just that much more productive per capita. I understand the politicians and the public are worried now about getting through the week, as opposed to how large the economic pie will be out there over a horizon not yet sufficiently tangible to assuage the angst.

Now it is off to the gym to do my bit to help jump start the economy.

[Torie]

I think all that stimulus  money should go to the forumites here myself. Most of you are basically impecunious at this juncture , and would spend the money in a flash, no?    And think how much happier all those women BRTD patronizes would be to boot!

The question, though, is whether the type of establishments BRTD regularly spends money on are the type of business we want to be stimulating

Ya, I have my own ideas about how to financially "assist" that particular cohort of individuals, but hey, I think BRTD is sort of on the right track.  I just prefer to take the bullet train myself is all.

[Torie]

Hey Verily, you don't think making financial investments has some benefit to the economy, including well, generating some jobs and all? Granted it is all a matter of degree, but the connotation I get from your post, is more of a Manichean all or nothing paradigm.

[Torie]

Hey Verily, you don't think making financial investments has some benefit to the economy, including well, generating some jobs and all? Granted it is all a matter of degree, but the connotation I get from your post, is more of a Manichean all or nothing paradigm.

Tax cuts don't go towards economically useful investment, pretty much at all. They either go towards services spending (strip clubs), which is the least efficient method of stimulating the economy, or towards long-term, low-payout investments (bank accounts, maybe college funds, etc.).

In an economy such as this one, essentially all extra spending is directed towards small-time luxuries, which might include chocolates, movie/sports/concert tickets, strip clubs, and other "comfort" service industries. Bono is incorrect to say that these contribute to the economy significantly at all as there is no product being created. Compare, say, spending a certain amount of money on building a bridge or on ten thousand people going to a sports game. The people at the sports game will have fun, and their money will go to the sports team, but the money will merely enter circulation without any direction at all; it's not accomplishing anything. The bridge, though, will be beneficial in the long-term; it might prevent a bridge collapse which would, in the future, kill ten of those ten thousand people you might have sent to a sports game.

When you cut taxes during a serious recession, you're basically investing in the short-term pleasures of the people rather than anything productive. From a political point of view (i.e., getting reelected), it might be better if the people are satiated by their entertainment money. But from an economic point of view it's clearly better if the public good is placed above short-term pleasures.

Verily, if Obama gives me a substantial tax cut, I assure you that it will all you into investment.  So doesn't that make it a good idea? 

Bono's point reminds me of the Comecon economic block. It at one time had a rather impressive GNP statistically in its mostly autarkic economy. Then, when the block became less impermeable economically, and the value of the "goods" it was producing was tested in the world wide market, it turned out that much of those "goods" were largely worthless, and the statistical GNP came tumbling down almost like magic.