You might not want to read this one and eat your breakfast at the same time. U.S. lawmakers are nearing an agreement on how to "rescue" our economy:
[Thanks L!]
At a Wednesday evening meeting, House Speaker Nancy Pelosi made major concessions to drop increases in food stamp and unemployment benefits in exchange for tax rebates of at least $300 for all people earning a paycheck, including low-income earners who make too little to pay income taxes. Families with children would receive an additional $300 per child, while those paying income taxes could receive higher rebates as well, a senior House aide said. [Hey-I have a teenage daughter that's working part-time- do we both get $300?]
So we all run to Walmart or Target and buy cheap imported goods when we get our check. What happens the month after that?
Pelosi, D-Calif., and House Minority Leader John Boehner, R-Ohio, had yet to reach agreement on a package of tax breaks for businesses after estimates showed a tentative agreement could exceed $70 billion, far more than had been expected, the aide and a Democratic lobbyist said.
When was the last you remember any government plan costing LESS than expected?
Pelosi and Boehner appeared optimistic Wednesday night as they left their third extended negotiating session of the day with Treasury Secretary Henry Paulson. A tentatively scheduled Thursday morning negotiating session was called off, her spokesman said, as Pelosi first needed to brief fellow Democrats on the emerging but controversial plan.
"We’ll have more to say tomorrow," Boehner said. "We’re hopeful."
I’d feel better if they were deadlocked in a meeting somewhere.
The business tax portion still being negotiated would give businesses incentives to invest in plants and equipment, give small businesses more generous expensing rules and allow businesses suffering losses now to reclaim taxes previously paid. The last item on spreading operating losses was proving to be unexpectedly expensive.
Lawmakers learned during the day that the government’s deficit already would swell to $250 billion this year because of falling corporate tax revenues — then they signaled they were willing to balloon it higher by more than $100 billion with a stimulus package.
It’s not their money, why not?
The federal deficit, which has been dropping in recent years, could reach $379 billion for 2008 — more than twice last year’s red ink — once the costs of the economic rescue measures are factored in, said House Budget Committee Chairman John Spratt Jr., D-S.C.
"We should act, and act now, to strengthen the economy … mindful, however, of the long-term budget challenges, the structural deficits that we face unless we act and act seriously," Spratt said.
I guess as long as you don’t smile while you do it, it’s OK.
Bush expressed optimism about quick action.
"I’m confident that we can get something done," Bush said in brief comments to reporters. "There’s a spirit that says we need to take a fundamentally strong economy and help it."
Ah come on…. we all know that if this was a "fundamentally strong economy," legislators wouldn’t be doing this!
And of course, we can’t forget housing….
Rep. Barney Frank, D-Mass., said negotiators were near an agreement on an overhaul of the Federal Housing Administration that would make it easier for thousands of homeowners with ballooning interest rates to refinance into federally insured loans. The measure might advance separately of the tax relief package, however.
Both sides reached agreement to allow Fannie Mae and Freddie Mac — government-sponsored companies that are the two biggest U.S. financers and guarantors of home loans — to buy loans much larger than the current $417,000 limit, aides and lobbyists said. Frank said that lending cap might reach as high as $700,000 in areas with the highest home prices.
Wasn’t Fannie supposed to be about providing "affordable housing?" Why should they help people afford what ought to be a jumbo loan?
Has panic driven all sense of fiscal responsibility from Washington? There was this moment of sanity:
Some lawmakers expressed alarm about the stimulus package more than doubling last year’s deficit of $163 billion.
"I am concerned that, in our rush to help, we will talk ourselves into a quick, feel-good hit today that will leave us with a bigger budgetary hangover tomorrow," said Rep. Paul Ryan of Wisconsin, top Republican on the budget panel.
I agree with Ryan. We’d better start cooking the menudo now- we’re going to need a lot.
Northern Virginia Housing Bubble Fallout
Bubble Meter
Mish's Global Economic Analysis
UK House Bubble
Ohio Fraudclosure
Breaking News Relevant Articles© Copyright 2012 Housing Doom | Copyright© 2011, AuthentiCraft, Inc.
I have this idea of about 500 college kids (politicians) at a kegger, and someone hollers out, “Dude, we’re almost out of beer!”
Then the stampede to the tap commences because everyone wants to get what they can before the party runs dry.
(Also thinking of a bunch of politician pigs climbing over each other at a trough running low on slop, but that’s a bit more revolting so early in the morning.)
Can you imagine George Washington on a cold, snowy hill at Valley Forge telling his battered and freezing troops that all the struggle and sacrifice will be worthwhile, because in 2008 the government & country they are fighting to free and establish will act like this?
Me neither.
Asset Hunter-
I think comparing the politicians to college age kids is giving them a little too much credit…
When my brother was about four years old, he had a nickel and five pennies when we went to the store. My mom, afraid he would lose all that change, swapped him for a dime. My brother sobbed buckets- Mom had taken away his six coins, and gave him one small one- obviously he was being ripped off!
Washington is showing that they have a similar brilliant grasp of economics. They can’t prop up this house of cards, and they shouldn’t if they could.
[Igor's word: blunder]
It looks like it’s a done deal:
CNBC says that traders are disappointed, they wanted a much bigger bailout.
Sorry Asset Hunter- roll over George Washington.
Point taken.
I was feeling bad about lumping pigs in with the politicians as well, since I grew up in the midwest and and hold some respect for pigs.
Seems like I run short on fitting analogies when trying to comprehend what (and how) these guys and gals in DC are thinking.
Just saw the “done deal” post.
I’m sure Wal-Mart and China are very happy this morning.
Wouldn’t it have saved a lot of time and overhead cost just to wire transfer the money directly to them?
spam word: failure
Asset Hunter-
I’m thinking of starting an “Igor for Congress” campaign. He’s smarter than most of them.
This $300 to $1200 dollars will probably cost us 10 times more in the future. How about getting out of Iraq (trillions) and stop giving tax breaks to companies that outsource our jobs. This greed is beyound my comprehension.
No wonder why Americans spend money(in the form of credit/deficit) like a drunken sailor on shore leave. They learned it all from their “Big Brother”.
Entropy-
That was my thought. The best advice we could be given as individuals is to reduce our expenses and save more- rough times are ahead. Instead the government wants to write us blank checks and tell us to go spend them, quick. We don’t need more “confidence”, we need more “prudence”.
I wish our government would consider what they are doing for and to families and individuals, rather than the “Economy.”
[Igor says "stupid"- he's on a roll this morning.]
My check, if I get it, is going straight to Citibank or student loans.
No way am I buying any plastic junk from Walmart.
We’re just going to have to pay for this giveaway later. Why not just let the economy play out? All this garbage is just election year tapdancing.
I dont get why the dems are going along with it though. If the economy tanks, they look better. Maybe they are more afraid of looking like they are doing nothing. Oh wait, they already have that part covered with the Iraq pullout.
Opened my homepage on comcast and news section has this story title…..
“Tax rebate deal: How much will you get?”
should read….”Tax rebate deal: Where the h*** are they getting the money for this?”
[Slight edit- t.]
I’ve only been on the planet for 30 years, but apparently much of our national “prudence” as Twist would call it, has evaporated over the past 20 years.
From Business Week:
“If consumer spending had tracked the overall economy over the past decade as it has in the past, Americans today would be spending about $600 billion less a year. The extra spending has amounted to a total of about $3 trillion since 2001″
Sorry I can’t figure out how to make the links pretty!
http://www.businessweek.com/magazine/content/08_05/b4069000016691.htm?chan=top+news_top+news+index_top+story
Entropy-
I should have written down the numbers, but last night my son divided the price of the bailout by the number of taxpayers. I think he figured it would cost us all around $538 a piece to give us each $300.
What a deal.
All this helping from the politicians makes me physically naseous.
why is my word “bolivar”? (I know Simone de Bolivar from history class.) what does it mean?
OK, just checked dictionary.com & it’s a mountain, highest point in Vanezuela. how is that relevant?
am I displaying my stupidity? if I am, at least no one can tell me that face-to-face!
The Bolivar (now Bolivar Fuerte) is Venezula’s national currency..
Our admin is responsible for Igor’s vocabulary lessons.
ok, thanks!
& I agree with Admin. I think we’ll see interest rates start rising by the end of the year when the FED can’t ignore the inflation part of stagflation anymore & pretty soon we’ll be in the teens.
at the least, 70′s & 80′s are here again.
I plan to save half of whatever I get. Something about that rainy day…
As for the rest, some will go to charity, and the rest will go to purchase a couple of items I need for my business.
Incredible! There is a “crisis” in Social Security because it will be insolvent in 40 years, or maybe much longer than that, or maybe never. So we better cut benefits fast to be on the safe side.
But with the Soviet bloc in tatters we’re spending multiples of what we used to spend on “defense” (although the only ones to attack us in the last umpteen years have been some rag tag Arab dissidents with home made bombs, boxcutters, and the occassional recreational watercraft). And we’ve got an angry empire of Iraqis and Afghans, the cost of which is spiraling out of control too. We don’t dare touch those budget items, because it would be a moral victory for the rag tags.
And now a cyclical event like a recession needs unprecedented handouts to builders, banks and mortgage lenders on a scale that really COULD make us insolvent.
One day Asia, OPEC and those former basket cases in Latin America are going to stop throwing good money after bad and cut off our credit. And it seems like the approach of that day is accelerating with every confidence crippling action our leaders take.
The most depressing part is that even leaders I normally admire (somewhat), like Barney Frank and Chris Dodd, appear to on the wrong side of this too. I hope they have just momentarily lost their senses, but I’m afraid they’ve been bought off too. The only other explanation is that they know that the situation is much much much more dangerous than anybody is letting on. I take it back. I can’t decide what the most depressing part of all this is.
TC-
I’m listening to Paulson live on CNBC [Probably a mistake, I haven't had lunch yet.] He’s trying very hard to spread the credit/blame equally among Republicans and Dems, Senate and House and the President. It will be hard to blame any one group when it fails.
You can catch him live online at CNBC.com if your TV isn’t handy.
Sorry. Can’t look. That Paulson scares me. Sometimes he seems undead. Othertimes he’s got that look in his eyes like Elmer Fudd or Yosemite Sam after they’ve bee been hypnotized by Bugs Bunny.
Igor says “nutcase”. I guess he agrees.
Our webmistress twist … the last prude on the internet. (And, he** yes, we love her for it!).
The Judge
spam word: titanic
the moral of this sordid tale is that anytime the republicans and democrats agree on anything this quickly, you can be 100% confident it is a hare-brained half-baked attempt to appear to be “doing something” that will either prove completely feckless or actually harmful. time will tell.
Dick Gaylord letter to Nancy Pelosi for conforming loan increase…
Destroy America Now
Judge-
What can I say- I’m a relic from a former time. I’m old fashioned when it comes to language and finances, and prefer movies that were produced before I was born. You have no idea how funny my kids think it is that I spend most of my time on a computer- they figure a quill pen would be more my style.
Kid-
Sadly, feckless and harmful are not mutually exclusive. Otherwise, we all could have had a good laugh today instead of feeling ill.
[That reminds me- I wonder who makes Pepto? Maybe there’s a stock I’d be willing to go long on with many more days like this!
Twist… talk about relics… I learned to write at Loreto School in Douglas, Arizona … with a fountain pen. They would not allow ballpoints, and pencils were only to be used in math class.
I watch Citizen Kane at least once a year, walk or ride my bike to the store when I can, drive a 20 year old Mercedes diesel, repair furniture as a hobby, wear sweater vests when I teach, and darn holes in my socks…. my kids are too young to think me a fogey… they’re six, and just think their Daddy’s funny. I can’t wait to embarrass them when they’re teens.
The staff at my school has thought me a bit nuts for the past two years, but now I have the vague aura of ‘told you so’. To me, revenge smells like freshly roasted coffee.
So it goes.
Yeah, most of us are just old fart cranks here I guess. But I also think of myself as a squirrel. I’ve been saving and hiding it for a rainy day for years. Like Dylan sang “It’s a Hard Rain’s a Gonna Fall”.
Meanwhile my coworker is set on his flat screen and like all the rest of them he won’t even wait for the check. It’s in the mail.
I had one of those teachers, Yossarian.
In fourth grade it was time to learn to write in cursive. She insisted on the old fountain pens, but my parents could not understand the requirement and kept getting me in trouble with ball points and felt tip pens. I was one of two kids who never got the right kind of pen.
It was a blessing though, because there was a paper shortage in the early 70′s, and we had to use recycled paper, which in those days was like writing on newsprint. Anytime I borrowed a fountain pen, my paper ended up in shreds. If you used a pencil on that grey paper, you could not read what you had written because the pencil lead and the paper were the same color.
Yossarian-
I was fascinated by a friend’s fountain pen in high school and got one of my own. I loved it. I discovered a rather obnoxious peacock blue ink that I loved. No one else I knew used it, so I never signed anything- everyone knew it was me.
I’d probably still be using a fountain pen if I could get one and keep it. I worry what would happen to one in the hands of my seven year old though.