Government Rebate.

[ND66]

As you may have heard, the Administration is giving us a nice rebate. However............

- If we spend that money at Wal-Mart, all of it will go to China.

- If we spend it on gasoline, it will all go to the Arabs

- If we spend it on fruit and vegetables, it will all go to Mexico, Honduras, and Guatemala.

- If we purchase a good car, it will all go to Japan.

- If we purchase useless crap, it will all go to Taiwan AND NONE OF IT WILL HELP THE AMERICAN ECONOMY.

We need to keep that money here in America. The only way to keep that money at home is to buy prostitutes and beer, since those are the only businesses still in the US.


.

[Dr Mordrid]

As you may have heard, the Administration is giving us a nice rebate.
>
We need to keep that money here in America. The only way to keep that money at home is to buy prostitutes and beer, since those are the only businesses still in the US.

It's not just the administration but both parties in Congress who voted in the tax rebate/giveaway/"stimulus package".

For those who aren't aware: virtually everyone in the US who filed an income tax form will get $600/adult & another $300 per kid, even if they had no income or are on Social Security or disability.

Call it vote-buying or a national welfare payment, either would be accurate

[cjolley]

I prefer to call it Negotiated Extended Withholding Honorably Defined Tax Voiding.

[Dr Mordrid]

Incumbents Job Assurance Program?

[cjolley]

I like my acronym better.

[xortam]

... For those who aren't aware: virtually everyone in the US who filed an income tax form will get $600/adult & another $300 per kid, even if they had no income or are on Social Security or disability. ...

That's wrong.

... You're eligible if you have a valid Social Security Number (SSN), can't be claimed as a dependent on a tax return and have either an income tax liability or "qualifying income" of at least $3,000. Qualifying income includes any combination of earned income and certain benefits from Social Security, Veterans Affairs or Railroad Retirement. ...

Also you are phased out of the rebate program if your AGI is over $75,000 for individuals and $150,000 for married couples. There's a lot of middle class people who fit into that category. The rebate is certainly not for "virtually everyone in the US who filed an income tax form."

See http://www.irs.gov/newsroom/article/...177937,00.html for information on the Economic Stimulus Payments Program.

[Dr Mordrid]

That's wrong.

Also you are phased out of the rebate program if your AGI is over $75,000 for individuals and $150,000 for married couples. There's a lot of middle class people who fit into that category. The rebate is certainly not for "virtually everyone in the US who filed an income tax form."

Given that as of 2006 only 19.01% of all US households make more than $100,000, much less $150,000, "virtually everyone" is much closer than "a lot of middle class people". If anything $150,000 is closer to 10%/12%, making them even more of a minority than indicated above.

Most social/political discussions of "middle class" these days define it as between $35k and $100k with $150k placed in the lower-upper class.

[xortam]

Your statements are still wrong and needed to be corrected.

[Umfriend]

IMHO, vritually everyone equals 90% not. Moreover, not all households are couples, may are single who would not be eligible as of $75K. Then there is the low-end which is left out: not virtually everyone.

But I'd be OK with discribing this as a rebate aimed at middle- and lowerclass (wichh are the ones with the highest propensity to consume).

Rather Keynesian, this rebate as is the underlying analysis (shifting the demand curve). The joke actually holds much value. One of the issues with Keynesian policy is that it causes an import-leak, not just because of the immediate propensity to import but also because it rises interest rates en makes the home currency more dear.

It will fail, not because Keynesian analysis is wrong per se but because it does not apply in the present situation: there is no shortage in demand in the US, au contraire, as can be seen by the trade deficit.

[cjolley]

It will fail, not because Keynesian analysis is wrong per se but because it does not apply in the present situation: there is no shortage in demand in the US, au contraire, as can be seen by the trade deficit.

Why do you say that demand and the trade deficit are that closely tied?
If demand goes down (read decreased purchasing power) and foreign produced goods are cheaper than domestically produced goods then one might expect the trade deficit could go up. No?


As for Doc's comment, the right practically lives on the snappy headline, backed up by as cursory a glance at the facts as is possible.
I'm surprised you bothered Xortam.

PS could this be moved to Politics please?

[Umfriend]

Why do you say that demand and the trade deficit are that closely tied?
If demand goes down (read decreased purchasing power) and foreign produced goods are cheaper than domestically produced goods then one might expect the trade deficit could go up. No?

No. It is hard to see why decreasing demand would also cause substitution of domestic products by foreign products.

[cjolley]

No. It is hard to see why decreasing demand would also cause substitution of domestic products by foreign products.

Not substitution necessarily, it could be a timing thing. The expensive domestic purchases would be dropped first. This could increase the deficit even if over all spending went down.
I'm not saying this has or will happen. Just speculation.

[Umfriend]

But it is conceptually hard to imagine, really. Even if domestic buyers cease purchasing domestic products only then that would not affect the trade balance.

[cjolley]

But it is conceptually hard to imagine, really. Even if domestic buyers cease purchasing domestic products only then that would not affect the trade balance.

My example was bad, sorry.
The result of trying to do two things at once...
I'll think about it some more later.

[ND66]

And all I wanted was to buy some beer........

Can't even throw a joke in here without turning it into something.......


.