Bell Curve The Law Talking Guy Raised by Republicans U.S. West
Well, he's kind of had it in for me ever since I accidentally ran over his dog. Actually, replace "accidentally" with "repeatedly," and replace "dog" with "son."

Tuesday, January 29, 2008

Free Money

Economic stimulus is all the rage on capital hill today. The reason is obvious: everyone is delighted at being able to hand out checks to taxpayers in an election year, and everyone wants as much credit as possible to redound to them. With Senate Majority Leader Reid's support, the House negotiated a deal with Bush that would be fairly simple: individuals would receive $600 and couples $1200. They would receive this as long as they were working, regardless of whether they paid income taxes or just payroll taxes. And earners over $75K (single) and $150K (couples) would see the rebates phase out towards zero.

The Senate has now proposed an alternate plan, this time also with Reid's support. It reduces the amounts to $500 and $1000 respectively, but extends it to senior citizens on social security and removes the $75/$150K income cap. It also extends unemployment benefits for 13 weeks more. Both bills are expected to pass their respective houses, then conference committee and fights will ensue.

These plans are an interesting contrast. In one sense, the income cap ($75K/$150K) is sensible in that higher earners are less likely to spend rather than save the money. In another sense, it is asinine: as long as the government is handing out free money, it seems bizarre to cut out this segment of the politically active middle class. And it seems a bit unfair, particularly as it denies me my free money. As long as everyone's getting it, why not? I suspect the Senate plan will succeed for that reason. I'm actually not entirely sure why the House Dems were apparently so insistent on an income cap and a phaseout. The phaseout is idiotic, because giving less money to higher earners is a complete waste. If you think someone earning $100K would not do much of value with $600, what is he/she going to do with $200 or less?

11 comments:

Raised By Republicans said...

Free money is the best kind of money there is!!!

Good thing the country isn't running a deficit or anything.

I wonder why no one is talking about the link between the war, the deficit and the credit crunch.

USWest said...

Yeah, and all those $600 checks will either go to backed mortgages of Sony stereo products. Who does that help?

Raised By Republicans said...

I'll probably use mine to pay down my credit card.

The Law Talking Guy said...

Shame on you, RBR. That is what I will do with mine, if I get it, so I agree it's not of much use to the economy. But if you buy Sony, you help drive the local retail economy, at least.

I recommend that we take our $600 or $1200 and spend it on the following: (1) Vermont maple syrup; (2) domestic cheese; (3) domestic prosciutto - see www.laquercia.us out of Iowa; (4) made-in-the-USA underwear. Underwear is always a good investment.

Will this stanch the bleeding and help the economy? No. But if we've all got clean underwear and maple syrup, we can sit at home unemployed eating our pancakes with pleasure.

Anonymous said...

I'm thinking more along the lines of some cool Amish toys rather than even more plastic Chinese-made baby junk. But I'd rather use it to pay down a credit card. Babies like cardboard boxes and wrapping paper best anyway.

-Seventh Sister

Pombat said...

Moot point since I'm in Australia, and they're not handing out free money here (well, unless I've really missed something!), but if I were to get some free money, I think I'd invest it (no credit cards to pay off).

Whether I'd invest it in shares or some really good wine is a good hypothetical :-) Wine prices aren't quite as volatile as the share market at present!

USWest said...

Ah ha! Pombat is right! I have a friend who tells me he can best the stock market in wine investment. I believe him. If had $3000 to blow, I might consider it. If all else fails, you'd have some really great wine to drink!

Raised By Republicans said...

Pombat,

I hear there are some excellent fighting wines down under. Are you thinking of investing in a nice Hobart Muddy or perhaps some Chateau Wagga Wagga?

Pombat said...

RbR - lol. I'm afraid my tastes run to the kind of wines you wouldn't be familiar with because the Aussies aren't daft enough to export them (not in quantity anyway) - the Brands shiraz, or a good selection from Redmans mayhap. If you're looking at Tassie, Bay of Fires or Stefano Lub-something-can't-remember would have to be the go I reckon. And cases and cases of Jansz - mmmmm. USWest is spot on about having good wine to drink if you don't fancy selling it :-)

But seriously, we were looking at some wine prices the other day, and if you buy something like a decent Coonawarra red and cellar it well, then in five years time you're pretty much guaranteed to be able to sell two bottles for the price of half a case of that years release (i.e. tripled value). If you manage to pick an exceptional/rare vintage / very desirable brand, it's even more than that - just look at some of the prices for Grange...

I'm looking online now at some half bottles of sticky I bought two years ago, at $20 each. There's a website here with them listed at $26 each, but completely out of stock (and saying best drunk in 2012 - can't wait!), a quick google doesn't turn up any being sold anywhere. So I'm guessing if I did want to sell them, I'd get more than $26. Even if it was only $26, that's a profit of 30% over two years - not bad.

Raised By Republicans said...

I LOVE Aussie Shiraz! All my friends know to bring me the stuff when they come over.

I never have the patience to invest in wine futures though. It requires deferred gratification.

Pombat said...

:-)))

Send your friends to the Coonawarra, with strict instructions to buy several years' (e.g. 2003, 2004 and 2005 - Redmans do cab sav & shiraz, and always have three consecutive years on vertical tasting) from Redmans, and also Brands if they can get it. That way, you get cellared wine (and well kept!), and *no* deferred gratification required...

(I think the only way our wine-investing friends manage it is by buying so much they're simply overwhelmed, and accidentally leave things to age)