Spending/Stimulus Bill Passes

Here are some news stories my economics class viewed today and discussed:

ABCNEWS: CATERPILLAR CEO contradicts Obama: ‘We’re going to have more layoffs before we start hiring again’…

Lobbyists had Bill Before Lawmakers Did…

Our Opinion: Stimulus bill flawed, but it should get OK

Democratic Senator Predicts None of His Colleagues ‘Will Have the Chance’ to Read Final Stimulus Bill Before Vote

Worker-friendly stimulus plan offers wealth of job-related aid

Will the stimulus actually stimulate?

Lots of different opinions. I was recently accused of being a “New Deal Denier” by another blogger. There is no evidence agreed on involving anything close to consensus from economists or historians on the success or failure of the New Deal. It really seems to come down to one’s political view point.

Have to remove that from the classroom to get a real sense of it.

So instead of debating the issue, I had my economics class came up with an alternative, and they did, one that is interesting. Say the government created a 2-3 month tax holiday? (They borrowed the idea from a U.S. Congressman.)

According to the population clock at the U.S. Census Bureau there are about 306,000,000 people in the United States. We could not find how many working American’s there are. I’m sure the data is there.

We did find some other data:

Of the population, workers pay $101.6 billion per month in personal income tax and $65.6 billion per month in FICA tax. That’s $167 billion per month, times three months is $501 billion dollars. Consumers will hopefully spend more. We said “hopefully” as no one really knows what will happen with the current stimulus bill, thus ours was hypothetical as well.

By taking a tax holiday this money is in consumer’s pockets almost immediately. Combine this with some kind of stimulus package (that can only make an impact slowly)  to create jobs seemed like the best course of action according to my 16 and 17 yr old students.

Now, I’m not an economist, I only play one Monday through Friday, but I am a thinker, as are my students.  For me, I would much rather follow my student’s plan than the one Congress has passed.

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3 Responses to Spending/Stimulus Bill Passes

  1. Anne says:

    I am a lifelong Democrat and proudly voted for Obama. I have to admit that I have been a bit disappointed with things thus far. Though I believe we needed this bill, I did not understand two things: 1) Why can’t the Republicans compromise!? and 2) How on earth does a Congressman vote for a bill that they didn’t have the time to completely read!? Even if they would have ultimately still voted for it. I just don’t like the closed door, hurry and rush tactics that they used.

    Anne

  2. Sam says:

    My God, the New Deal was the only thing that kept this country afloat in the 1930s…… the current stimulus package is frankly too small thanks to the Republicans. Now we need to raise taxes on the rich, the greed central on Wall Street. Tax cuts don’t work, we need to tax, and if that means you the wealthy elite take it, so be it. It’s their greed that got us here. Also, the Republicans and Bush.

  3. Chris says:

    Anne I agree, where’s the honor in politics today? Oh, wait, what am I saying. I can’t believe that these Senator’s voted for something that they could not have possibly read before voting. Nothing new, I know. However, where you’re about to sign on to the largest spending bill that revolutionizes this country, seems reading (scanning) through it for a couple of days would have been appropriate. I know, they’ll say they already knew what was in it as they read the previous drafts. Horse Hockey, the details are what’s important. Half the bill was stimulus, the other half purely a political agenda.

    Anyway, Sam, FDR raised taxes steadily throughout the GD, it didn’t work. He spent money, unemployment improved, but in the end went right back up. I know he should have spent more, he didn’t do enough. Anyway, there is more I could argue with, thanks for posting.

    Raise Taxes! That’ll stimulate the economy. Get them evil rich capitalist!

    LOL!

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