ALTERNATIVE ARGUMENTA

By Patricia L Johnson and Richard E Walrath

The $150 billion dollar economic growth package was announced by President Bush on January 24, 2008 after a bipartisan agreement was reached with the leaders of the U.S. House of Representatives.  The plan consists of $100 billion in temporary relief for families, and $50 billion in business incentives.

The plan calls for taxpayers to receive rebates of “up to” $600 for individuals, and “up to” $1,200 for couples.  Anyone eligible for the above, would also be eligible for an additional $300 per child, which sort of gives you the impression that if you’re married and have two kids you’re about to receive “up to” $1,800 from Uncle Sam.

Don’t rush out and spend the money yet!

Whenever this administration uses the words “up to” you can bet your booties you’re going to get less, so how much less?  Department of the Treasury examples follow:

Married with children:

1) Married couple with two children*, earned income of $4,000, no federal income tax paid.

Individual rebate = $600

Child tax credit = $600

TOTAL = $1,200

2) Married couple with two children, earned income in excess of $3,000, AGI = $45,000, federal income tax is $323.

Individual rebate = $600

Child tax credit = $600

TOTAL = $1,200

3) Married couple with two children, AGI = $48,000, federal income tax is $773.

Individual rebate = $773

Child tax credit = $600

TOTAL = $1,373

4) Married couple with two children, AGI = $80,000, federal income tax paid in excess of $1,200.

Individual rebate = $1,200

Child tax credit = $600

TOTAL = $1,800

5) Married couple with two children, AGI = $160,000, federal income tax paid in excess of $1,200.

Individual rebate = $1,200

Child tax credit = $600

Phaseout reduction = ($500) [5% x ($160,000 - $150,000) = $500]

TOTAL = $1,300

*All children referenced in the examples are qualifying children for purposes of the child tax credit.

Looks like you won’t be pulling in $1,800 unless your adjusted gross income is more than $80,000 and you have paid in more than $1,200 in federal income tax.

The current agreement also provides a temporary tax cut for businesses providing them with the opportunity to purchase equipment this year and deduct an additional 50% of the cost in 2008.

Treasury Secretary Paulson says that he hopes the Senate doesn’t meddle with the stimulus package.  He’s afraid that the Senate might put some stimulus into it–like money for food stamps as well as extended unemployment compensation.

The package does not provide assistance in the form of extended unemployment insurance benefits, food stamp money, or spending on infrastructure, but it does provide some assistance for homeowners who are struggling to keep their homes in the current mortgage crisis. 

Will it be enough?

Of course not!

How much worse are economic conditions today than they were when the first Bush tax-cuts went into effect? 

Is there anyone who would disagree that they are much worse today than they were then?

So, why are we talking about a $150 billion stimulus, maybe, when hundreds of billions in tax-cuts were put into effect then?  Granted, most of those Bush tax cuts went to the rich and business, and we see how much benefit they provided to the economy. 

The purpose of the Jobs and Growth Plan of 2003 was to stimulate the economy with the influx of $350 billion dollars.  On a temporary basis it succeeded in providing some stimulus, but in 2003 we weren’t looking at 1.8 million subprime loans getting ready to reset with higher rates over the next two years.

If the situation is far worse today–as it is–how is $150 billion going to solve the problem?

By Richard E Walrath

The Democrats shouldn’t waste time on Bush. Get a bill on his desk as soon as they can without tax-cuts for business and the rich.  That’s the most inefficient means of providing stimulus.  They just pocket the money.  If Bush wants to veto the bill, let him do it.  

He and the Republicans can take the heat in November. 

Food stamps, extended unemployment benefits, and a month’s rent would be good for starters. 

On the McLaughlin Group this past Friday, Monica Crowley said that the last time they gave out refunds some of the people didn’t spend them–they saved them. 

That’s because they started passing them out from the top. 

Try doing it from the bottom this time, and all the money will get spent.

By Richard E Walrath

So far, you’d think the subprime mortgage crisis affects only houses in the cheap rent districts.  Not so, the next wave is going to hit homes that look like these.

FDR declared a Bank Holiday until a way could be figured out to keep the banks from going under.  We need a a Home Holiday on mortgage increases for 90 days.

One of the funniest things the media is putting out now is the idea that Willard Romney will benefit from the economic crisis we’re having because he has such extensive business experience. 

Does he have an MBA, too?  Just like Bush?

That will be such a help! 

Why do I refer to him as Willard Romney?  That’s because it’s his first name. 

“Some Simple Emergency Survival Tips” posted on January 20, 2008 contained the following statement in error.

“A pair, or two, of extra socks tucked inside your car will help keep you warm if you get stranded, and you will have a pair handy if your feet get wet and/or cold.”

Please note the following correction:

By Richard E Walrath

No, don’t tuck your socks inside your car. Your car doesn’t care whether it’s warm or not–it has no feelings.  Tuck your extra  pair(s) of socks inside your shirt to keep them warm and dry, and to help keep you warm.

By Richard E Walrath

Survival techniques for emergencies. 

A candle burning in your car if you get stranded will give off enough heat to keep you from freezing to death.  Open the window a little now and then to get some air. 

Keep a bag of newspapers and some matches in your trunk so you can build a fire - this may help somebody find you and will keep you alive until you’re rescued.

A pair, or two, of extra socks tucked inside your car will help keep you warm if you get stranded, and you will have a pair handy if your feet get wet and/or cold.

To survive, you have to make your situation better, not perfect, just better.  That makes you feel better.  Then you find or think of something else you can do to improve your situation.  It helps if you know a few things to start with.

Countries in Europe use hot water to heat their homes.  The water is centrally heated and piped into houses and buildings.  With 400 million people, Europe uses about half the energy the United does with only 300 million people.

Water running into a bathtub provides heat, and once the bathtub gets hot, the heat stays there.  If you’re cold and you start to feel warmer, you feel better right away.

A few techniques for keeping your home heating costs down:

Block drafts - if you cannot afford weather stripping, roll up a towel, blanket or throw rug and place in front of the door.

Dress in layers - the more layers you wear, the warmer you’ll be.  Five layers is about as many as you can wear and still move around.  Outer garment should be some kind of wind breaker, not a sweater.  If you’re going to be outdoors, a sweater won’t keep the wind, snow or rain out.  If you’re indoors, it doesn’t matter so much. But if there is no heat in your house, you’ll feel warmer with an outer garment.  Wear the sweater inside.

Invest in electric blankets - if you have little or no heat, you can still stay warm at night if you have electric blankets.

Open your drapes or blinds to let the sun in during the day. 

Close your unused rooms and shut the heater vent.

By Richard E Walrath

The big ‘ R’  is fast closing in on us, so now we hear about plans for doing something about heading it off. 

Hillary Clinton is proposing a $70 Billion stimulus plan for those with lower incomes–that’s called trickle up.

What I don’t understand is why does it take seven years and $700 billion of trickle down to get us where we are? 

Why not just skip the trickle down idea since we know it doesn’t work?

If we can head off the big ‘R’ with only $70 Billion, just think of what we could do with $700 Billion!

People are way over their heads in debt, and have no way out except bankruptcy which the Republicans have made more difficult and more costly to protect their business interests, but bankruptcies are on the rise.

People on the bottom half just can’t make it any more on their incomes.  The median household income is below $50,000.  Food, housing, health care and energy are consuming more and more of their incomes.

Add a debt burden that has been steadily growing to this picture, and you see the
Big ‘R’ fast approaching.

What the bottom half needs is an increase in income–not just a short-time, one-time
stimulus. 

Wages have been suppressed and depressed for years.  The minimum wage stayed at $5.15 an hour for almost ten years! 

When you have to stop going out to McDonald’s, you know things are getting bad.

Starbuck’s sales are dropping.  People who used to spend $3 for a cup of coffee aren’t going to do that anymore.  Appleby’s has been having problems for some time and Wendy’s is even worse off.

Even more telling are McDonald’s sales which have fallen.  People aren’t eating out so much–even to buy a hamburger.  When you have to stop going out to McDonald’s, you know things are getting bad.

Next thing people will have to do is learn to boil water and make soup.

Meanwhile, debt in the bottom half has soared.  Add to this grim picture growing unemployment and the financial crisis due to the subprime mortgage mess, and you can understand the situation we are in. 

Richard E Walrath is a former budget analyst and co-owner of the Articles and Answers News and Information sites:  Articles and Answers  Articles and Answers 2007 and the Alternative Augumenta blog.

By Richard E Walrath

People are way over their heads in debt, and have no way out except bankruptcy which the Republicans have made more difficult and more costly to protect their business interests, but bankruptcies are on the rise.

People on the bottom half just can’t make it any more on their incomes.  The median household income is below $50,000.  Food, housing, health care and energy are consuming more and more of their incomes.

Add a debt burden that has been steadily growing to this picture, and you see the Big ‘R’ fast approaching.

What the bottom half needs is an increase in income–not just a short-time, one-time stimulus. 

Wages have been suppressed and depressed for years.  The minimum wage stayed at $5.15 an hour for almost ten years! 

Meanwhile, debt in the bottom half has soared.  Add to this grim picture growing unemployment and the financial crisis due to the subprime mortgage mess, and you can understand the situation we are in. 

By Richard E Walrath

The big ‘R” is fast closing in on us, so now we hear about plans for doing something about heading it off. 

Hillary Clinton is proposing a $70 Billion stimulus plan for those with lower incomes–that’s called trickle up.

What I don’t understand is why does it take seven years and $700 billion of trickle down to get us where we are? 

Why not just skip the trickle down idea since we know it doesn’t work?

If we can head off the big ‘R’ with only $70 Billion, just think of what we could do with $700 Billion!

By Richard E Walrath

It looks like another Perfect Storm to me.

I’m talking about the NH Primary results which left egg all over the pollsters and the political pundits and the media. 

Ever since the book and the movie, by the same name, came out, things that go wrong are called a perfect storm.

For opera lovers, it was the Una Furtiva Lagrima that escaped from Hillary Clinton as she bravely faced the cameras and voters on the fateful final day before the election.  That’s what swayed the election, say they.

Not so, says Andrew Kohut, President Pew Research Center, who brings you the Pew Polls.  It was the po’ white folks, the poor women voters, to be exact, who turned out in record numbers to vote for Senator Clinton. 

Kohut, in his NYT Op-Ed piece today, probably has summed up the results best. 

Pollsters, pundits and the media saw what they wanted to see, not what was really there.

Now they will have to face the possibility that their dwindling number of readers and viewers will continue to dwindle and diminish.  But I would suggest that being wrong isn’t something that the pollsters, the political pundits and the media should find so hard to explain. 

After all, they’ve had lots of practice.

It reminds me of one of Clint Eastwood’s movies, Pink Cadillac.  Somebody named Roy is supposed to be acting as a look-out, but a gang goes right around him unnoticed by Roy.  How could they get by Roy, says one character in the  movie. People have been getting by Roy for years is Eastwood’s answer.

Lots of stuff–people and things–have been getting by the pollsters, political pundits and the media for years–seven going on eight years, at least.

Richard E Walrath is a former budget analyst and co-owner of the Articles and Answers News and Information sites:  Articles and Answers  Articles and Answers 2007 and the Alternative Augumenta blog.