Tag Archives: stimulus
A little economic humor for the holidays…
An entertaining parody of the mindset of many of today’s economists. Also a great illustration of network externalities.
Between April and December of 2008, about 120 million individuals in the United States received one-time stimulus payments totaling $96 billion. Those payments began phasing out at incomes above $75,000 a year, in part because it was argued that lower-income households were more likely to spend their rebates, so policies aimed at those households would be more likely to have stimulative effects. In Household Response to the 2008 Tax Rebate: Survey Evidence and Aggregate Implications (NBER Working Paper No. 15421), co-authors Claudia Sahm, Matthew Shapiro, and Joel Slemrod… Read More →
If you recall my previous post regarding the “Parable of the Man Who Sold Hot Dogs,” then you’ll appreciate this real-life example of a man and his family creating their own stimulus package! Click here for the full story. Hat Tip to J.R. Marker, III for the link.
The following are some of the major provisions of the stimulus package of interest to small business, according to Small Business Legislative Council, The Associated Press and other sources: It allows small businesses to take upfront deductions of up to $250,000 of the cost of equipment — such as computers, vehicles, furniture and manufacturing machinery — instead of depreciating the investment over a number of years. The deduction was slated to end in 2008, but was extended through 2009. It extends a bonus depreciation allowing small businesses to… Read More →
The House and the Senate have drafted a compromise stimulus bill totalling $789.5B, all but guaranteeing the largest economic rescue program since Roosevelt’s New Deal. Obama hailed the “endeavor of enormous scope and scale,” though it may turn out to be just a down payment on efforts to turn around the economy. The package, which exceeds the cost of the entire Iraq war since the 2003 invasion, will expand unemployment insurance, streamline health-care delivery, give Washington more control over local education spending and tilt federal assistance to the… Read More →
Click to enlarge this chart that breaks down the proposed stimulus package. Source: Senate Releases Second Portion of Bailout FundDAVID M. HERSZENHORN, NYT, January 15, 2009http://www.nytimes.com/2009/01/16/us/politics/16stimulus.html
In case you’re wondering where I stand on the proposed proposed gasoline tax holiday, it would save the average individual motorist a grand total of $28 this summer, but would result in $9 billion in lost tax revenues which would be mostly targeted for infrastructure needs. This is a politically motivated move, not a well-thought-out economic decision. Enough said. Data source: American Association of State Highway and Transportation Officials
Almost two out of every three Americans won’t spend tax rebates included in the proposed government stimulus package, a survey by American Century Investments found. A little more than a quarter of respondents said they would spend the rebate money now, while 36 percent said they would use it to pay off outstanding loans or credit card balances, according to Kansas City-based American Century Investments. Another 25 percent said they would save or invest it. On the other hand… According to a new National Retail Federation survey, consumers… Read More →
Needless to say, I have been receiving a lot of questions at various meetings on the economic forecast for this year and the prognosis for the Green Industry. I always receive curious looks when I start off saying “It depends on who you’re listening to!” Perhaps the following may help to explain. The Federal Reserve Bank of Philadelphia just released its latest survey of professional forecasters and panelists were divided on when the effects of a government fiscal stimulus package would be apparent and how large the effects… Read More →