Judah - I don't always agree with what you say, but I'm always impressed by how you say it.
On Wed, Feb 4, 2009 at 11:46 AM, Judah McAuley <[email protected]> wrote: > > 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:287388 Subscription: http://www.houseoffusion.com/groups/cf-community/subscribe.cfm Unsubscribe: http://www.houseoffusion.com/cf_lists/unsubscribe.cfm?user=11502.10531.5
