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2009 Stimulus Plan

 
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PostPosted: Sun Apr 03, 2016 4:49 pm    Post subject: 2009 Stimulus Plan Reply with quote

PeakTrader:

The Obama tax cuts were too small and too slow (and much of the Bush tax cuts expired).

I think, a large permanent tax cut in early 2009 (e.g. $5,000 per worker or $700 billion), along with more unemployment benefits of shorter duration, would’ve had a more powerful effect than normal, because of prior overconsumption.

Households would’ve paid-down debt or caught-up on bills to raise monthly discretionary income and strengthen the banking system. Typically, when households pay-off a credit card, they run-up the card again. And, paying-off a car loan adds a significant amount of monthly income. Much of the slack in demand would’ve disappeared more quickly and the banking system would’ve been in a stronger position.

It should be noted, dollars shifted from U.S. consumers to the federal government through annual trade deficits.

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