Another Trillion $$$ Stimulus?

Yep, maybe.
1) 60 Minutes did a piece last night highlighting the US's failing infrastructure and the dire need for the federal government to fund new bridges, refurbish old ones, repair highways, etc. It wasn't packed with new information, but presented with a splash of drama as it made the case for expedient action and funding via raising the federal gas tax. (and no, they made no mention of Obama's 1st trillion dollar stimulus which he said was mainly for infrastructure but wasn't).
2) As far as jobs go, we know the Obama recovery hasn't fostered nearly enough good paying jobs to build & strengthen the middle class.
3) We just inherited 5-10 million workers thanks to Obama's unilateral immigration "reform".
4) Gas prices have dropped dramatically over the past several months, which will make it much easier for Obama & Congress to justify raising the federal gas tax.
5) Unions are huge supporters for this initiative, especially in the NE where nearly all projects would be preformed by union labor.

There was talk of another stimulus last year, but it faded quickly. Now though, with the election behind us and Obama's popularity waning, the timing seems perfect for this type of initiative. I mean, no one could realistically argue we don't need to build new bridges, repair old, unsafe ones and the same with our highways, right? And, by raising the federal gas tax a few cents, spending becomes "deficit neutral" (as they say), so that negates the big deficit argument. Add to that the "jobs created" angle and it seems like a really easy sell for the WH and even a Republican led Congress.

Bottom line, I doubt the timing of the 60 minutes piece was coincidental and as we move toward the new year I think this subject will come up more in the political discussions. It is a conversation we need to have, but hopefully it'll be approached without the normal "we can't wait" hysteria or political contentiousness we've witnessed in the past few years. Maybe wishful thinking, but never know, maybe DC could actually do something constructive for a change.

 

It can only if the Democrats can offset it with dollar for dollar spending cuts elsewhere. A lot of money from the last stimulus was wasted.

 

Spending on infrastructure can be beneficial … but I don't like how you propose to pay for it. I suggest that you learn about the Henry George Theorem. Then I hope you will reconsider how you would pay for that infrastructure placement and maintenance.

Here is a link I hope you will read and consider: https://en.wikipedia.org/wiki/Henry_George_Theorem

 

When Obama raised tax rates at the beginning of 2013 it meant that there would be no new taxes without offsetting those tax increases elsewhere. Republicans were willing to close loopholes, but he wanted to raise rates on the people so that some poeple in this country would be paying over 50% in taxes on a lot of their income. He could not come to a deal.

 

Ayuh,.... Almost a trillion dollars was pissed away,... Union pay-offs,... No shovels needed,...

 

Promoting the general welfare means upgrading infrastructure whenever our elected representatives cannot justify wartime tax rates to have wars on crime, drugs, poverty, and terror.

 

The problem is paying for it. Raising the gas tax won't work because you're seeing artificially low oil prices brought about intentionally to harm Russia (and Iran as a side benefit). The US and Saudi Arabia agreed to keep production high because it brings the price down as inventory grows, and it also keeps Saudi Arabia having a 'market share' that is artificially higher by producing more than they would otherwise produce if they were reacting only to market forces. Oil can shoot right back up relatively quickly if OPEC, the US or SA decides enough is enough and cuts production. Oil below $80 per barrel is just unreasonable to sustain but they are doing so because of the economic harm it does to Russia, whose budget is built with reliance on oil sales of around $100 per barrel if memory serves me correctly.

What we wasted on QE could have easily paid for so many of our needed infrastructure updates, plus it would have directly put workers back into jobs, increased household income and brought back some of the missing demand in our economy for production of goods and services, which would further create jobs.

 

Why not end our wars on crime, drugs, poverty and terror, to pay for it?

 

Why not just have fewer roads, bridges and tunnels? How many new highways do we really need? I can still get to the same places we went as a kid as an adult. Maybe having fewer roads will make them more enjoyable because there will be fewer crowds.

 

The first stimulus was divided into three parts. The payroll tax cut, money to government, then the rest for shovel ready jobs.

Hard to say how much the tax cuts actually took from the treasury because that is dynamic and hard to quantify. Money to government went towards federal buildings and money to government administration for everything else. Then money for shovel ready jobs which was dispersed over years. Some went to roads I am sure but one I am familiar with was the low cost housing building downtown for upgrades to the interior.

 

I saw the 60 minutes piece and it was trying to raise some sort of hysteria to put pressure on the new Senate. That being said, although I don't think infrastructure is any sort of stimulus (it's not going to pump up either the economy or help unemployment much) we need our infrastructure to be maintained for it's own sake. But there is a tried and true method of financing it, raising the gas tax. Now is the perfect time to do it since gas prices are falling. I would just say that the projects and their costs be estimated first, and then have the additional gas tax term out when it's raised the amount required to fund the projects in question. That way it's not a permanent tax increase and only funds items specifically approved via legislation.

 

That is very conservative of you … tax the working poor, who need gas to get to work, so you can build infrastructure that will make landowners near that infrastructure even richer. Good ol' wealth redistribution from the working poor to the already rich … that will help make things better.

 

It's a user tax, so those who use the roads help pay for them. So yes, it's conservative in that sense.

 

It is the landowners who use the roadways to increase the productivity or desirability of their land/location. And they are the only ones who will be enriched by the infrastructure … so, why not make them pay? The workers who drive on the road to work will have to settle for less pay because the location is more desirable to work at. Why should the workers pay more for gas, while also receiving less pay at work, all so that the landowners can see the value of their land increase without them lifting a finger?

 

Do not under any circumstance raise any tax. Take cost from military spending, entitlement spending, foreign aid and corporate welfare.

 

I have said many time, if we did not address foreign outsourcing and foreign imports, another band-aid(stimulus) would be needed

jobs going overseas and the working class buying mostly product from China... means are money is going overseas and not coming back

Bush failed to address these and seems Obama will too

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Our money going overseas, and not coming back, is a good thing. It is dis-inflationary.

We print money at near zero expense, and they exchange goods with us at full value … you can't get a better deal than that. If we can print money at almost no cost and they are dumb enough to exchange their manufactured goods for that money, then isn't that a good thing?

What you better pray for, is that that money never does come back. Because if it does, it will drive inflation to heights never seen by the current generations.

 

I am not proposing an increased gas tax, but it's popular in political circles. The land value tax isn't (not because it doesn't have merit), it's just a much more difficult sell. Property is personal, and when you talk about a "property value tax" it will immediately been seen as negative by anyone who owns property. But since we already have a gas tax (a sizable one) that targets all drivers, a few cents a gallon (now that prices are relatively low compared to 6 months ago) VS what benefits will be portrait as being, it'll be seen as small price to pay. It likely won't be long term, but the narrative game is played on a short field.

 

But there won't be any spending cuts required because the increased gas tax will pay for the spending. Well, at least that's how it will be presented.

 

You're correct, we are seeing artificially low gas prices. But how many people in the US know that? Hell, I'm guessing less than 2/3%. When it comes to understanding QE, markets, the effects of US printing money, foreign markets, maybe less than 2/3%. What I'm saying is none of that matters with regards to a new stimulus. It will be presented as a looming crisis (which in truth it is). It will be presented as a crisis only more money going the DC will fend off and BOOM....the media will support it, unions will absolutely support it and it'll be an easy sell.

 

Truth is, when a nation that has an economy based upon consumption, allows it production of consumer goods to be offshored, so profits grow for corporations, it creates problems with living standards, they fall, it creates massive unemployment, and it increases the number in poverty. Gov't throwing another trillion at the problem, does not solve the problem, and debt grows.

This dog won't hunt, and sooner or later the lightbulb is gonna come on with the American people, who are slow in understanding the fatal flaw in this economic model. Don't expect either party to address this flaw, for they were bribed to change our economy in the first place.

There are no good times ahead for the middle class or the working class. It will get worse over time. That cannot be avoided. Income will continue to move to the top from the middle, as the top already snatched up 60 percent of the income the middle used to have, when we made what we consumed, employing our own people. This ain't rocket science, although some people try to make the simple as complex as possible so people don't understand that this is a simple flaw in our model. We created prosperity by average americans, by making what we consume, here. When you reduce that, the cost is a shrinking middle and a rise in poverty. You cannot get around it, for its a law, just as real as gravity. And this time, there is no FDR around to save capitalism from the excesses of the elites.

 

Yea, turn back the clock.....that'll work...lol. .

 

Well, I disagree that pumping huge dollars into infrastructure wouldn't have a larger impact on jobs and the economy. I was in Pittsburgh last week and was astounded at the condition of both the highways and the bridges. And that's just one city.
The other point you make I can whole heartily support. The gas tax increase based on funding specific projects, but in all honesty know that won't happen. Once DC enacts a tax increase on gas it's a done deal, it'll never decrease.

 

Yea keep building new stuff when you cannot maintain the stuff you have....that'll work as well as it is now...lol..

 

I agree that the land value tax is a difficult sell … but I also believe it is the only tax which can deliver the results I believe you are looking for.

Building large scale infrastructure projects will require access to materials (steel, concrete, asphalt, lumber, etc.) and landowners control that access, via their monopoly over natural resources. So, for starters, the moment the government announced that these projects are planned, you can bet that the price of access to those natural resources would skyrocket. Those who own land where these natural resources are present would wake-up the next day much richer, while everyone else would be poorer due to increased materials costs. Next, that infrastructure has to be placed somewhere, so now we have to fork-over more public money to buy locations from landowners, which will of course inflate the prices of locations, also. Finally, when the infrastructure is complete, the demand for living near that infrastructure will increase the prices of residential land, if it is fit for development, throughout the entire area. So yet another “cha-ching” moment for landowners, and more forking-over of (this time private money) by those who want to live near that infrastructure. Of course, as to the location where this infrastructure is to be placed, local landowners will pay the politicians enormous bribes to ensure (if they can) the infrastructure is placed near land which they own … and why not, the infrastructure is a huge giveaway to the landowners, at the cost of the public, and that is well worth a little bribe money.

Of course none of these problems would be present if the infrastructure were funded via a land value tax. In that case, as the infrastructure was placed, and demand for land near that infrastructure increased, the taxes collected would increase alongside the new demand. In other words, the infrastructure would be self-funding by the new demand it created for nearby land, or from the land from where the natural resources (materials) were drawn. Nobody would automatically wake-up richer or poorer because of it. No one would have to bribe politicians for favorable placement. Those who want to live near the infrastructure, and the opportunities it provides, would simply accept that they would pay higher tax burdens in order to be near those advantages. Most importantly, for those not near enough the new infrastructure to benefit from it, they would not be forced to pay a dime more in taxation in order to fund it.