Jerry, here is the way I see the stimulus plan. "Stimulus" is pumping money into the economy. It is borrowing from the future to try and spur growth now that (hopefully) will allow us to pay back what we are borrowing from the future.
Bush tried a direct, short term, financial stimulus. Give everyone $500 and hope they spend it to prop up growth in the retail sector. Some of that certainly did happen and sales ticked up. Some of it got saved and while that is good for the long term, not so good for the short term. The problem with the short term stimulus is that it didn't lead to sustained sales growth. Retailers didn't hire new employees because they didn't expect long term sustained growth is sales, it was more like a holiday time seasonal uptick. Manufacturers didn't ramp up production and hire more people for the same reason. Money went it and like water, it found crevasses and drained into holes. Now they are trying stimulus that is geared toward infrastructure. Lets say you spend $100 million on road improvement. That money is going to go to companies in construction, planning, etc. Those employers know they have a project that will be bringing in money for a year so they can hire people knowing that they'll be able to use the resource. Those people that are hired know they have a steady job for the next year and so hopefully aren't hording all the income they get against job loss and are willing to spend more. That road improvement also means that cars use less gas commuting to work and it means that trucks don't break down as often when hauling goods. If it is a nice new porous surface it means that there is less run-off generated by the road and hopefully the road will last longer as a result. So in the short term, the stimulus is through providing jobs on projects that have a couple month to couple year timeframe, therefore increasing the number of jobs and steady paychecks. Then hopefully it also is being spent on projects that have long term value as well. In the case of smoking cessation, the short term stimulus is money spent on advertising, setting up classes, buying medications, developing training materials, etc. All of those are jobs that people need. Longer term the hope is that the money spent now will save us money in important areas down the road. So ideally the projects serve two purposes, a short term one and a long term one. Hope that explains it better. Judah On Wed, Feb 4, 2009 at 11:15 AM, Jerry Johnson <[email protected]> wrote: > > Actually, don't blame Scott for that analogy, it was me. > > And why do we need an immediate stimulus passed in the next 15 days for > projects that don't have any return for a decade or decades. > > Why can we not take a more deliberative approach for that long term > spending, and handle it as "normal" spending? > > What is the rush? Seems like the used car dealer trying to get the young > couple to sign the loan quickly, without letting them read all the fiddly > details. > ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~| Adobe® ColdFusion® 8 software 8 is the most important and dramatic release to date Get the Free Trial http://ad.doubleclick.net/clk;207172674;29440083;f Archive: http://www.houseoffusion.com/groups/cf-community/message.cfm/messageid:287386 Subscription: http://www.houseoffusion.com/groups/cf-community/subscribe.cfm Unsubscribe: http://www.houseoffusion.com/cf_lists/unsubscribe.cfm?user=89.70.5
