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February 3rd, 2009
08:00 AM ET

Stimulus strategy

Anderson talks with his panel about what President Barack Obama will have to do in to get his economic stimulus plan passed.


Filed under: Economy • Finance • Wall St.
soundoff (17 Responses)
  1. Markee

    Here's an idea for a stimulus plan: let's give every head of household $1 million dollars. That would be way less than the proposed amount and it would go right to the people and help those who truly need it. We'd end up saving money on the stimulus package and it would stimulate the economy.

    February 4, 2009 at 5:27 pm |
  2. lora

    GIVE THE BANKS MORE MONEY ASAP!!! But, give it in the form of a prepaid mortgage payment for homeowners ($5,000 per social security number associated with the loan, up to a max of $10,000 per loan). This would infuse money into the banks, and give homeowners a chance to free up money to spend elsewhere. It would also stop /delay the foreclosure process for many.

    February 4, 2009 at 2:39 am |
  3. Jerry - Buffalo, NY

    Student Loan Forgiveness Multiplier Effect

    Student Loan forgiveness and economic stimulus. Each month, my wife and I pay more for student loans than we do for our mortgage, property insurance and property taxes combined (our property taxes increase each year, so soon this statement may no longer be true). We are both lawyers; however, I apply my skills to running a not-for-profit dedicated to assisting micro-enterprises and my wife works in a not-for-profit legal services corporation. Needless to say, we earn less than others with whom we graduated. Realistically, our relative earnings make little difference for this proposal.

    We can all agree that stimulating the economy requires money to flow into businesses and housing. There are two ways to accomplish this – through the front door or through the back door. In other words, money can flow to the business by 1.) making capital available to businesses so they can bide their time, create products with greater demand, or honor existing obligations until people begin to feel more comfortable spending money; or 2) putting more money in Americans' pockets. I agree with your campaign message of cutting the middle class some breaks. I suggest, though, one effective strategy to stimulate the economy would be for the federal government to buy-down people's federal student loans. (Data on the numbers and amounts are conspicuously unavailable to the general public.)

    In the case of my wife and I, if half of our federal student loans were “bought-out”, we would likely have more than $400 more per month to put into the economy. (Obviously, if the federal government buys down the principal, the total interest paid would also decline, which would have an additional impact.) A great deal of this, almost $5,000 annually would flow directly into the economy. We could plan for a second child (more diapers, daycare, etc.), do some much needed home renovations, or pay off some private debt (e.g. credit cards, private student loans, car loans, etc.) This last prospect addresses strategy 1.) above because it would add to lender liquidity – whether they lend, is another issue entirely.

    How about some examples?
    Take Stan, for instance. He graduated with a Masters in Education three years ago; With his student loan obligations, he has no ability to save for the down payment on his first home. reducing Stan's student loan obligation would give him more flexibility to save for a new home (heck, require him to participate in a home-buyer's club or a home-ownership Individual Development Account), which would directly impact the housing market... positively.

    What about Lisa, the college graduate with a B.S. in engineering and design? She has a great idea for a new product, but saddled with education debt, she struggles to save money to invest in her knew design, leaving us all to wonder... would we all be better off, if she could bring this product to market?

    Jerry
    Buffalo, NY

    There are several questions, the answers to which I do not have time to find.
    How many people (actual number – current and former students, parents carrying student loans for their child) have students loans?
    How much do we owe?

    February 4, 2009 at 12:38 am |
  4. Sue B

    Sammy – Here we go again with “from the top down” mentality. Tax breaks for the employers who are maintaining their workforce and even hiring is great….but again its that trickle down effect. We only hope the employers continue to do the right thing …lets face it, unless it’s a nonprofit organization these tax breaks go a long way to making companies profitable. That may calm some of the fear with a “sense” of security but will it truly get people to start spending? Not me! My employer is trying to get out of the red....like so many others...its not going to help me directly...now when I need! The ‘employees’ need REAL security which come in the form tax breaks for them too!

    February 3, 2009 at 5:23 pm |
  5. sammy

    I agree with priyasusruth. The problem right now is 'fear' – fear that you may not have a job in the coming months or years. Fear of the uncertain. And as long this fear exists consumers are never gonna loosen their wallets. Whtever extra they get is going straight to their savings. I think the government need to do something to address this fear....
    Give big tax breaks to companies who have maintained their workforce or even bigger tax breaks to companies who are hiring. Maybe even a little help to companies like this in terms of very low interest loans etc.
    This will bring a sense of security to those consumers w.r.t their jobs and hopefully will loosen their tight reign on their wallets

    February 3, 2009 at 3:17 pm |
  6. Sue B - Detroit Metro

    I find it very interesting that the GOP Leaders are having issues with the $900 billon stimulus bill and list what they feel as waste.
    -$125 million for the Washington sewer system…Washington gets a new sewer system and it puts some people to work getting it done!
    -$1.4 billion for rural waste disposal….rural areas get rid of the “waste” and it puts people to work not to mention…helps the environment!
    -$500 million for state and local fire stations. Not only are they the first responders to disasters – that protects everyone’s interests….and again…puts people to work!
    -$200 million for public computer centers at colleges…..absolutely not a waste…how many kids go off to college without computers and need that access!

    Now, I can go on and on! I’m not saying that I agree 100% with everything in the package but...99-1/2% of it puts people back to work that will truly STIMULATE the economy and “we the people” will actually have something to show for it! The GOP doesn't want to spend $200 million so MY college kids have access to computers but you will give MY mony...BILLIONS to Wall Street with no questions asked and assume that the few responsible parties will “do the right thing”! Yup that’s the GOP alright!

    February 3, 2009 at 1:30 pm |
  7. Warren

    I believe that these politicians just don't get it. Our economy is based on spending; 66% in fact is spending. So the common sense thing to do would be to let people have or keep more of their money. I voted for OBAMA but the republicans in the Senate have it right with their plan.

    However, I do not think it is enough. I think it is time to move towards a consumption tax. If anyone wants a copy of an independent smo jo look at the benefits email me at wguess3198@yahoo.com with "consumption tax" in the subject line.

    February 3, 2009 at 1:26 pm |
  8. Sonya

    I think that I heard on CNN last night that the Republicans want to modify the stimulus package and add 15% tax credit for 1st time homebuyers and mortgage interest rate reduction for homebuyers. If that is the case, I am a little confused. Most americans have credit scores that the banks will not accept or they do not make enough money to support purchasing a house. At least that is the story that was relayed during the first stimulus debacle. Middle class americans have lost homes which has also affected their ability to purchase a home. So...I guess I am not sure who will benefit from the 15% tax credit and new home purchases. Could someone please elaborate?

    February 3, 2009 at 1:20 pm |
  9. shannon buckner

    the stimulus package may help some companies. I own a micro business which is a full service hair salon. Will help me as a business. i think if you want to help give every household that pays taxes $300,000.00 pull that household credit report payoff all debt on the credit report. If the house mortgages is $300,000.00 pay half. If there is any money left over have the household to take a money management program. If they pass the class allow the household to invest into their own future. Everyone won't do right with the money. The amount of $300,000.00 won't make people go out and stop working, it will hopefully make people spend money, pay taxes, and invest in themselves. The government can get the money back with a federal sales tax of 1% for a four to five years.

    To give the money to the companies don't mean that they are going to call you and say they got this money so now we are going to lower your note or rate.

    February 3, 2009 at 12:54 pm |
  10. carmen McAdams

    Apparently Obama just reads what is put on the teleprompter without paying attention to the words written for him. Each day he reads a different time frame and amount of jobs that will be created, and said that the public would have five days to review non-emergency bills online before they were signed. Taxing income over $250,000.00 then let it expire

    How much longer before America and the press wake up to Obama’s FALSE PROMISES from his campaign? He said he would tax those who make over $250,000.00 a year, the rich, whose are still gainfully employed. But wait, he would not want to cut off the hand that fed him, and his campaign, all the celebs, Oprah who funded his campaign. Don’t punish them, but take it away from the lil’ guy.

    All the fundraisings during his campaign, the money for his security on Jan.20, and the inauguration balls, etc. All this money would have been better served to the get the Us back on track. Where’s the public outcry for that wasteful spending? During these dire times the stimulus strategy should have been focused on those without homes, jobs and struggling to put food on the table.

    What does it say about the ethics of this Administration with all the tax dodgers, i.e, Daschle and the likes all failing to pay his taxes? Nice role models. The only way they get held accountable is through the vetting process, but his it otherwise.

    Washington is and will remain the same. The only change that Obama does is change is mind, while no one seems to notice.

    February 3, 2009 at 12:53 pm |
  11. priyasusruth

    Obama government should consider increasing the tax rebate for the companies [ who doesnt lay off their workers] . This would be a huge reassurance for them & may reinforce the companies & provide them with the motivation that is very much required for stabilization the in the current economic conditions.Also, this may encourage them to keep their workers & employees thereby contributing their part towards improving the economy.
    Otherwise this would be a cycle going on & on.
    now lets hope for the best with the stimulus package.

    February 3, 2009 at 11:47 am |
  12. Jeanette

    why should a stimulus package be passed when they have added so much pork to it. Some of the pork is so obviously pork that it was added (just like in union negotiations) so they would have something to take out without taking out the other pork which they want passed for their lobbyist. What happened to the great ones lobbyist promises??? It is a very small amount that is actually being put to use to give us jobs and to help the middle class Government as usual!!!

    February 3, 2009 at 11:44 am |
  13. Derrick

    Why has the administration opened up a forum for people to express their Ideas on how they can help with certain topics such as the foreclosure and mortgage problem. I have been watching president Obama and I have put together a great idea to help the low-income neighborhoods turn around this mess with minimal funding from the government. President Obama call me or email me, I can help!

    February 3, 2009 at 11:01 am |
  14. brad in new york

    Lately we are hearing more and more talk about giving more help to homeowners that are in trouble. From moratoriums to tax rebates. Why?

    While I believe we should help out people in crisis, what about the "other" homeowners? The ones who didn't overextend themselves. The ones that didn't create the housing collapse.

    Why should the bailout only favor those for bad behavior? If the government really wants to start to turn this economy around, why don't they give some of the bailout money to those who were NOT the cause of this mess? I think we should be able to put that money to better and more responsible use. Just like we have been all along.

    February 3, 2009 at 11:00 am |
  15. Eric Sweitzer

    Is everyone on Capitol Hill completely clueless as to the real problem of the ecomony? Due to unforseen circumstances I had to file Chapter 7 bankruptcy and lost my home. Thanks to Bank of America! They refused to work with me at all. I even begged them to work with me or I would have to file bankruptcy and they wouldn't get any money. Their comment was "Good luck and we'll see you in court." Now I'm expected to help fund their bailout and also put the burden of paying for this stimulus package on my grandchildren as well. Look at all of the thousands of americans that is in the same situation that can no longer get credit to buy another home or even a car. So with so many americans unable to obtain credit now who is going to buy all these houses and cars because people with money and good credit already own a home and newer cars. But yet we are expected just to sit back and due without when the banks are the ones not wanting to work with the people to save their homes or even try. Obama's cabinet members are apparently not worried about the tax burden because two of his cabinet members didn't pay their taxes! Does this seem fair and just?

    February 3, 2009 at 10:58 am |
  16. Sarah

    Can't the government just pass the tax cut portion for the middle and lower class working poeple now, and fight about the rest of the stimulas package as they will? As usual while congress is fighting the issues, main street is out here dropping off like flies and dieing a rapid death financially. I think Obama is really trying to work on this and trying to work with the republicans just to get it going. I just hope the republicans try to cooperate as well. How much longer are we suppose to wait. Wall Street, AIG, and the banks didn't have to wait. Speaking of AIG, I just inquired about drawing out my paid portion of my retirenment fund with AIG to pay my taxes and behind bills. They told me that the Federal Government just past a law that if you draw out, you can't participate for 6 months. A law just passed since the bail out. No matter how you look at it the middle and low class who does most of the work ends up paying double for the rich and their greediness.

    February 3, 2009 at 10:41 am |
  17. Derrick

    Why are all these so called high paid and educated people on capital hill making such a dilemma about this stimulus package. Most of them voted for the 1st stimulus package in which the money is being wasted by huge coporations that are cutting jobs. The GOP party didn't make a big deal about that package did they! Now that a package has been put together that can actuall reach the people they complain and wanted to pout. How Ironic!

    February 3, 2009 at 10:34 am |