Government Checks?

[eskanto]

Does anyone have an opinion on the Bush Administrations plan to send rebate checks to 130 million Americans? If you make under 75k and are a taxpayer you will recieve around $600 if you pay taxes jointly with your spouse you may recieve $1200. Supposedly we may recieve these checks by june 2008? Is this true? Or am I getting wrong info?

[Mirana]

Yes it is. Other governments have tried this economy booster in the past. However, unless they made it so the money could only be used to purchase new goods, an overwhelming amount of ppl polled said they'd drop it in savings or bills.

$600 is not enough to make people run out and spend.

[woodbert]

Bush did this back in the beginning of his first term and it had some mild success. The economy was not nearly as plagued with problems as it is now, so it is probably not going to promote the kind of spending that it did in 2001.

[M.C.Barrett]

Wouldn't it just be totally fucked up if everyone donated their checks to, say, educational charities instead of sending it to their credit card companies...

[eskanto]

...but i thought we already had tons of federal debt. won't this just make it worse?

[Ilaekae]

You just don't understand the US financial policies.

1. Get elected.

2. Spend all the money you can find, then borrow more if you need it.

3. Do this til you are out of office, funneling as much to your friends and supporters as possible.

4. Blame next administration for wasteful spending.

5. Repeat til we all have to learn Chinese.

[Interceptor]

A couple years ago the government of Alberta gave everyone a $400 tax free cheque... paid for my flight to the Montreal workshop :)

[dbclemons]

Considering I owe taxes for last year, my check has already been spent.

[eskanto]

You just don't understand the US financial policies.

1. Get elected.

2. Spend all the money you can find, then borrow more if you need it.

3. Do this til you are out of office, funneling as much to your friends and supporters as possible.

4. Blame next administration for wasteful spending.

5. Repeat til we all have to learn Chinese.

AH! now everything's cleared up. thanks. :)

[Mike Frank]

I think it just goes to show how much our economic system needs to change. I keep tabs a lot on what's going on, I was reading sources back in 2005 that were forecasting the current housing market crash.. and to me its just a complete injustice. This country has pretty much been sold out to special interests, our equity has been raped and pillaged by fraudulent lending practices and it looks like this could just be the tip of the iceberg.

If economic growth continues to slow down then we could see the unfolding of other credit markets like student loans, credit cards, auto loans, etc. Which is why they are trying their best to solve the problem through borrowing money from other countries and through monetary policy (inflating the money supply.) The financial shitstorm that is festering is the result of long years of policies that have pretty much shorted the United States nationally.

Our GDP is mostly service based at this point, manufacturing gets lower all the time, we have negative consumer savings, basically we are all in debt up to our eyeballs and we got no real income coming in.

The fact that our government and its financial institutions are so behind that they are just going to hand out money to people should be a wake up call to just about anybody.

This lecture pretty much summarizes the present financial conditions we are in, I know that the guy is in business but from all the facts I've read elsewhere it seems correct -

Ultimate American Dollar Collapse (http://www.youtube.com/watch?v=3RhnHo3RDfg)

[SugaCrcl]

What could I do with an extra $300?

-buy Rosetta Stone, Chinese language
-buy Chinese stock
-tour China, I've always wanted to see the Great Wall :)

[eskanto]

This lecture pretty much summarizes the present financial conditions we are in, I know that the guy is in business but from all the facts I've read elsewhere it seems correct -

Ultimate American Dollar Collapse (http://www.youtube.com/watch?v=3RhnHo3RDfg)

so this guy is suggesting that we invest in gold since it's doing better than the dollar? But what would happen if everyone started investing in gold? oh geez....India or China here I come.

edit: i wonder, can he bush administration really be blamed for all this? My first instinct is to blame them, but in the lecture you cited Mike, this guy mentions historical events that occured in 1901 that would help lead us into a financial collapse.

[Digital_Blacksmith]

DAMN YOU THEODORE ROOSEVELT!!!

No seriously, its Bush's fault. If he wouldnt have been such a tard with everything, our economy wouldnt be as bad as it has ever been. But oh well, I get $600, so im happy. Leave me alone while I go look for a duel monitor and some other shit.

[SugaCrcl]

There is a Google video online called "the money masters". It's 3 hours long, THREE HOURS! But it's full of information about the history of money politics in United States and Europe.

The Money Masters (http://video.google.com/videoplay?docid=-515319560256183936)

[Sepulverture]

I think it's a terrible idea. Where is all this money magically coming from? Can't be coming from our federal income taxes since all that is just used to pay off interest to the federal reserve. From state or local taxes, which are supposed to be apportioned taxes anyway? I'm doubting that.

The only two options left as far as I can see is that all this imaginary money is printed up by the federal reserve to try to boost the economy, which as we all should know by now when you flood an economy with currency that currency becomes devalued. If not the federal reserve then where?

Oh right, I remember. We borrow something on the order of 5.4 billion dollars per day from foreign nations. If this is the method being used to finance this massive influx of wealth being distributed amongst the people then won't that just make things worse because we're throwing ourselves even further in debt? Or rather ol' georgey boy is throwing us even further in debt.

I'm not totally sure about that 5.4 billion dollars per day number, but it's been a number I've heard fairly consistently.

Edit: Mike Frank - I watched that video before, and many others like it. thanks for the link.

[Mike Frank]

so this guy is suggesting that we invest in gold since it's doing better than the dollar? But what would happen if everyone started investing in gold? oh geez....India or China here I come.

Well we would be a lot better off I think if we had never lost sight of the fact that our money should retain its value. A standard like the gold standard helps people be aware of the fact that the value of their currency is going down in the instance that the government creates inflation. Personally, I don't have the kind of capital right now to invest in gold or other assets. But you could pretty much invest in any commodity (except houses) and you would probably come up against the dollar.

It's been that way for awhile, you can't just throw your money in a savings account and expect the value of your dollars to keep pace with inflation. So it's no wonder so many people got into flipping houses in the past couple of years.



edit: i wonder, can he bush administration really be blamed for all this? My first instinct is to blame them, but in the lecture you cited Mike, this guy mentions historical events that occured in 1901 that would help lead us into a financial collapse.

Yeah it's not all Bush administrations fault. A lot of people think he is just inheriting a lot of problems that Greenspan left for him. Of course, he is also spending like a drunken sailor on top of that.

But yeah a lot of these policies have been in place for a long time. The end of the Bretton Woods agreement has allowed the US to run up huge deficits without ever thinking about the consequences, our dollars have gone offshore along with a lot of our jobs and manufacturing, and now we are competing with the euro and people are diversifying out of the dollar. But for a long time we had a monopoly on being the reserve currency of the world, so why produce anything?

[Sepulverture]

About investing in precious metals: Gold is where it's at, no doubt about it. That is if you have the kind of financial resources to buy into it. The average person can't afford to buy even a whole troy ounce of gold, so the next best options are either palladium, which is a member of the platinum family or (and this is the more reasonable choice) silver. I've bought and traded and sold silver for about a month now, and in that short month I've seen huge turn around.

Kitco.com's live charts is a great resource (http://www.kitco.com/charts/livesilver.html) for tracking the current value of the most common precious metals. Kitco's historical charts (http://www.kitco.com/charts/historicalsilver.html) are great if you want to check out past trends with those metals and want to try to predict how silver might react to future market changes.

I have used it since I decided to start buying silver, and the months leading up to that, plus a lot of the brokers and traders I've talked to use it too.

[TASmith]

Just so you know, Bush recently apologized for his actions and promises to make things better for the future. Read here! ;)

http://www.theonion.com/content/news/bush_vows_to_make_it_up_to_country

[otis]

Get ready for INFLATION!! YIPPIE!!!!

:pump:

[Ilaekae]

Wha...?...

Yippie chicks are getting bigger boobs? Are you sure? Will there be pics?







WHAT!?!?!? ...don't look at me like that... :P

[Stephen Lo Piano]

Your information is correct yet something really strange about this time.
Back around 2000 when they first attempted this idea the government was running a slight surplus in revenue verses spending. The Republican political and philosophical ideology of less government seemed appropriate back then.
Now the government is deep in red ink and wants to give people some tax revenue back? This is truly a sign that the economy is in deep trouble, probably worse than we are lead to believe. From a perspective of sound fiscal policy and budgeting this is not a good time for creating more red ink and deficits.

Remember that this money you get back will have to be repayed some time in the future. The government will probably finance this debt with some form of interest expense attached. Therefore you are really getting a loan from the government to get deeper in debt, and will have to pay back this amount some time in the future with additional interest expense.

For people that believe in the cash basis is common sense, frugality, living within your means, and careful spending, you are being dragged into the mess created by incompetent leaders with our trade policies (you can add global corporate interests to this mess) and reckless government spending approriations.

[aesir]

Yes, there is going to be a serious recession. The only question is how bad is it really going to be? Its probably gonna be like the stock market crash in the 80's.

Just something for you all to keep in mind, when everyone else is selling like madmen, that is the perfect time to buy. Unless you believe America is completely doomed, then sell, and go to canada.

[Mike Frank]

Your information is correct yet something really strange about this time.

I think the big difference this time is where the United States dollar stands in the world market. Everyone is diversifying out of our currency, at a time where we have the biggest deficits and debt ever. This is bad news. It seems that it could be at the point of no return.

For people that believe in the cash basis is common sense, frugality, living within your means, and careful spending, you are being dragged into the mess created by incompetent leaders with our trade policies (you can add global corporate interests to this mess) and reckless government spending approriations.

Exactly!! This is why I feel so strongly that we need to elect leadership that is talking the kind of common sense like Ron Paul is talking. Let's get back to balancing our budgets and living with our means -- before we get robbed wholesale by our current crop of politicians and global corporations. It's not about shutting down trade, it's about shutting down the kind of managed trade that displaces wealth in favor of multinational corporate interest groups. These guys don't have our interests at heart, they just want to keep growing their profit and power at any expense.. even the destruction of our middle class.

[Blue]

Exactly!! This is why I feel so strongly that we need to elect leadership that is talking the kind of common sense like Ron Paul is talking.

It won't happen because the necessary information will never reach the ears of the people. Those who benefit from this system also have control of the media. Sadly enough, a cure for ignorance on this scale is far out of reach for us.

Seeing how this is ever so predominant throughout the world currently and throughout history... we won't see it change.



I think i'll get back to drawing now. The fantasy world on paper is much better then this 'real' one.

[Jason Rainville]

Unless you believe America is completely doomed, then sell, and go to canada.

We'll keep the poutine hot for y'all :)

[Mike Frank]

It won't happen because the necessary information will never reach the ears of the people. Those who benefit from this system also have control of the media. Sadly enough, a cure for ignorance on this scale is far out of reach for us.

Yeah it is sad. I feel compelled to speak up on these issues though, even though I fear the potential hostility and ridicule of my viewpoint. How bad does it have to get for us before people will turn off the TV and read a little history, find their own news.. are we really so incapable of getting everyone to wake up?

For example, trillions of dollars have been lost in the housing debacle.. many people have lost at least $50,000 in equity, many have lost more. I don't even own a house but to me, this is an outrage!

And with inflation - devaluation of the currency, that's our paychecks.. our investments.. our savings.. retirement.. becoming worth less money everyday. And no one seems to care much.. whats the deal??

[Jason Snair]

This rebate check is basically just a loan, right. I mean, it's next years tax rebates given to us now. So if we spend it, we'll just end up paying takes on it and then owe the irs next year.

Me thinks I'll just keep it in my savings account -- that way I don't end up screwing myself in '09.

[egerie]

I've been starting getting interested in the precious metal investment. The price of gold has skyrocketed in the last few years though. egads!
Looking at what happened to the USSR and the great depression really has me scratching my chin. And seeing local economists or financial advisors be so placid makes me wonder if I don't need a tinfoil hat and a straight-jacket.

[Ilaekae]

The hat has to be 98.9% or better pure aluminum (not tin) folded twice over page 17 of the Washington Times or it won't do you any good...

[kev ferrara]

It sounds to me like a backdoor way to partially solve the credit crunch. Because a boatload of that money will probably be used to pay back credit card debt. So the consumers lower their debt and the banks get some of their loaned-out money back.

If the government just bailed the banks out directly, the banks would get their money, but the people wouldn't fare any better with their credit cards.

So this way, the theory would go, the banks are "happy", the people are "happy", and whichever party takes credit for making everybody happy, gets votes. Which makes them happy.

Having said that, I have no idea if this is what they're thinking or whether the plan has the slightest bit of merit.

Egerie... where are you seeing all those placid economists? All I've seen are rants for months on end from those guys.

[light]

Wouldn't it just be totally fucked up if everyone donated their checks to, say, educational charities instead of sending it to their credit card companies...

Actually yeah it would because millions of people need this money desperately ? ? ??

[M.C.Barrett]

For the majority of the people getting these checks, $600 is not going to make a big difference in their financial situation. I was just musing on turning this farcical "stimulus" into something that might actually be of use to our long term future. What really bothers me about this is that, for the most part, if it's not going to credit companies, it's probably going to (more than likely not made-in-USA) consumer electronics, which still doesn't do us any good. It only really remotely works if everyone buys goods and services originating entirely within the US, which honestly ain't gonna happen.

I'll probably spend it on artwork or music. As long as the government's throwing money down the toilet, one way or the other, it might as well go to support things that matter.

[Mike Frank]

This rebate check is basically just a loan, right. I mean, it's next years tax rebates given to us now. So if we spend it, we'll just end up paying takes on it and then owe the irs next year.

Me thinks I'll just keep it in my savings account -- that way I don't end up screwing myself in '09.

AFAIK it is not a 2009 tax rebate advance. Its basically just a hand out.. if you qualify..$600 is coming your way.

Pay no attention to the man behind the curtain.

[Stephen Lo Piano]

If I may add one more opinion here this is very important.

The very fact that Bush already made a public announcement for people to take their tax rebates and spend that money is a sign of the type of economy we currently find ourselves facing.

We import far too many things that should be made here to reduce our imbalance of trade on world trade markets. Government will be helping foreign economies more than our own if the vast majority of people spend their rebates on goods made in foreign countries. This will also increase our trade deficits and likewise drain more wealth out of this country and cause the government some time in the future to further de value our currency.

The government could do far better improving our current problems of mounting debt by creating grants. Grants for people that have ideas to get foreigners to buy things we invent and make in this country for export to foreign countries is a positive step in the right direction. This would bring wealth and money back into this country.

From a personal selfish perspective I would like to see the government come up with a creative idea like providing Concept Art or Deviant Art a grant to have a phase of their web sites devoted to help American Artists sell prints or other products created from their art work to people in foreign countries through the internet. Within that grant some money to pay for maketing and advertising expense would be a good idea. This would help artists here make some income from selling their work to foreigners and provide an outlet for foreigners to buy something from Americans. Of course this idea is rather a long shot biased in my best interest yet this type of thinking is what will turn things around here in the US and set our economy in the right direction. Similar ideas for inventors of new products and ideas could use this advantage helping to get this country selling more goods and services to foreigners and reducing our seriously growing trade deficits that are draining the wealth of this nation.

[dogfood]

Stephen, it sounds like you're a fan of the FairTax.

For some history on the credit crunch, the government starting putting the screws to the lending agencies back in the 90's, expressing their concern over how difficult it was for the lower tiered wage earners to buy houses. They held inquiries and hearings and hot poker applications. Faced with some serious regulation, the lending agencies created some fascinating ways for those with less income to buy houses. Well, once the housing market became engulfed in hellfire, everyone tried jumping in the dingy. Amazingly, when the cycle came around and the loans started seeing higher interest rates (the bettering economy forcing up rates to stave off too much economic growth and resulting inflation), a lot of folks found themselves unable to pay any more. An independent agency sampled a few thousand credit applications (ones from people in foreclosure) and found that almost 70% were fraudulent. These people misrepresented their situation (usually stated much higher earnings). Most of the discrepancies could have been easily caught had the loaning entity wanted to find them. But, Federal pressure, along with the money from putting the loan through, assuaged most lenders' consciences.

So, the Feds, the lenders, and the people all share blame and the rest of us bear the brunt.

And as far as this "tax rebate"? People may decry money being pushed from a helicopter, but they're still going to run under it and wait for another.

When the people find they can vote themselves money, that will herald the end of the republic. - Benjamin Franklin

[Jasonwclark]

I find it hard to be optimistic when our whole banking system is predicated on such an unrealistic and unsustainable model of growth. Even if the oil wasn't running out, and my credit card wasn’t maxed; Even if we still had a manufacturing base, and everyone only had 1 kid instead of 2, and doctors worked for free; We’d still be screwed. There’s just too many of us now. We’re all way too comfortable, and our values and expectations don’t mesh with reality anymore. This is usually the point in the history of Empires, when someone from the periphery bursts onto the scene - suddenly and unexpectedly - topples the old order and sets up something new. History is replete with examples of this happening... A couple big crises and before you know it, some new guy decides he wants to play Caesar. Or some horse riding yokel from the middle of nowhere, is sweeping down into your civilization and mucking everything up. You wake to discover that your backwater colony in the 'New World' has turned the whole game around on you. Out of nowhere, your poor and your starving decide its time to start getting violent about it, and the Guillotine comes back in fashion. It sounds alarmist at first, but the more you read into it, the more the basic patterns start to seem freightningly consistant.

Someone mentioned the collapse of the Soviet Union. We don't spend nearly enough time discussing this... the speed with which it happened. The USSR was probably our closest historical analog (a revolutionary, expansionist power, ideologically driven, and totally wedded to its military.) They were our great rival for more than half a century, and now that they're gone, it's surprising we aren't more worried about our own position.

Oh yeah and my $600, like all the rest of my money, will probably be going straight to my landlord (whoever he is). Unless of course they decide to convert this place into condos, in which case who knows. Good thing they still base the minimum wage on the cost of food instead of housing right...
oh wait... damn

[archipelago]

i love the futurama episode when they all get 300 bucks from the government.

this will be like that but TIMES TWO!!!!!

[aesir]

im gonna drink 200 cups of coffee