Bill Gross of PIMCO: REFI for everyone?

[PeshakJang]

the government has to supply jobs.

The idiot/liberal mindset in a nutshell, right there.

 

[sactoking]

I've heard that proposed by several politicians. It frankly has a lot more appeal. Besides the reasons you stated, the FICA vacation would (a) reward those with an honest paycheck-underground economy types and nonworkers are passed by, (b) it would infuse the economy with immediate cash, (c) no governmental type planning on how and where the money is spent-if you want to blow yours on a kewpie doll collection, so be it and (d) it is somewhat progressive tax relief, meaning less paid workers get a higher percentage of relief.

Self-employed persons would see a less immediate benefit to this type of stimulus, as well generally pay our FICA taxes quarterly. OTOH our FICA taxes are higher.

I wonder what the cost of such a giveback would be, and how Congress would pay for the uncollected FICA taxes (for SS, Medicare, etc.). Unfunded liability would be amathema to the GOP/teabaggers, and quite a few other people too.

Stopping FICA would be insanely stupid.

1) SS, Medicare, etc are already projected to be headed toward insolvency, there's no need to speed it up unless you have some magical idea to "fix" these programs that could be enacted simultaneously

2) Lots of state/municipal workers have an honest paycheck and don't pay FICA tax, thus would see no benefit

3) You remember the Making Work Pay Tax Credit that Pelosi was so proud of? The one that gave a "benefit" of $7-33 per paycheck, depending on how often you were paid? Didn't that just make you want to go hog wild with your spending and 'stimulate' the economy with your extra $15 every two weeks? No? Well, that's because a payroll credit is fairly worthless. Even a decent amount of money looks pretty small and has little psychological effect when distributed over 12, 13, 24, or 26 periods.

 

[Slew Foot]

All these band-aids will not address the issue, the fact that there are no jobs to support the economy, planned or otherwise.

Hate to say it but I agree with this guy.

 

[Darwin333]

We need a second stimulus not more government backed financial instrument risk taking.

We are already borrowing record amounts of money and our debt is the equivalent to an interest only 4 year ARM that we took out when rates were at historic lows (Read: its gonna be a major bitch when rates go back up, unless you want to argue they will stay at their current rate for the next few decades).

So, um, exactly where do we borrow another trillion from?

BTW, why shouldn't we at least spend all of the last stimulus first?

 

[thegimp03]

What kind of stimulus would actually help because it doesn't seem like the last one did anything and I don't think that anything is going to improve without jobs. Who actually believes that unemployment is actually below 10%?

 

[dfuze]

All these band-aids will not address the issue, the fact that there are no jobs to support the economy, planned or otherwise.

Exactly. This was part of our economic class discussion. It's a chicken and egg type ordeal; people are uncertain of what is going to happen so they don't spend more than they have to and companies aren't getting more business so they can't hire.

 

[her209]

Suspend the employee contribution to FICA for 6 months. That would pump billions of dollars into the economy by giving people with jobs more spending money.

But how many people would actually spend it versus saving it or paying down debt, especially in this economy?

 

[jiggahertz]

All housing should be owned by the government and leased for one year by bid. Those not bidding sleep in the street. This would insure that folk who bought long ago don't squat on valuable land. Taxes could probably be cut to nothing. Folk who work could lease near where they work of farther away as they chose. The poor could lease small homes in the middle of nowhere and grow their own food, maybe having a negative lease.

sarcasm? please say yes

 

[Jhhnn]

There are no jobs because of all the uncertainty within the economy.

Some of it is related to the normal business cycle, but a lot of it is related to the Democrats and their anti-business mentality.

Obamacare, cap&trade, card check, the end of the Bush tax cuts etc etc all of these items are anti-business and all over them are supported by the Democrats. They are creating an environment where a lot of businesses are afraid to hire because they don't know what the future will look like.

Gawd. I think you picked that talking point straight from the pages of the weekly standard.

Explain how honoring the guarantees made to GSE investors is anti business, or how the stimulus package wasn't good for business, along with the other various mortgage programs.

Uncertainty exists for no reason other than repub obstructionism... The direction we took over the Bush era obviously hasn't worked out very well, but they simply won't allow a new one to be taken... They seem to want paralysis, seem to relish the thought of a deflationary spiral. Maybe that's because the true Bush constituency is sitting on huge liquidity, recognizing that it'll just become more valuable when cash is king and jobs are even more scarce...

 

[lothar]

Second dip or second stimulus, your choice.

Second dip.
I want to buy more stocks.

 

[lothar]

The first one was too small.

How many stimulus do we need?
Bush's stimulus + TARP money + Obama stimulus = still not enough stimulus?

I forgot the amount we've spent on each and the total amount of stimulus we've spent so far.
Bush stimulus gave $600 to everyone who made less than $75,000.
TARP I & II rescued banks and provided stimulus.
Obama stimulus provided stimulus.

How much in your opinion is not "too small"?
What's the magic number we need to spend that you're looking at?

 

[lothar]

But how many people would actually spend it versus saving it or paying down debt, especially in this economy?

Saving, paying down debt, and spending all help the economy.

 

[Moonbeam]

sarcasm? please say yes

What's the problem. The best places to live should cost the maximum traffic will handle. Why should some bum own an apartment building in New Your because some family member bought it in the 1880s? If everybody leased we wouldn't have taxes.

 

[manimal]

Second dip.
I want to buy more stocks.

sadly the rich will get a lot richer and the poor shlubs who were depending on the value of their home and their 401k will have to rely on Social Security.


In regards to the refi for everyone idea what about people who own their homes? Its basically lowering the value of my house to keep the neighbor afloat. The viciousness of this cycle is if that neighbor loses their house the value of the entire neighborhood goes down.


Many sane economists do think a second stimulus is going to be necessary. Hopefully they wont waste the money on tax cuts. Funny thing is unemployment insurance is widely held as a very effective stimulus. People buy food and pay rent and mortgages with unemployment checks.

 

[dmcowen674]

Quote:
Originally Posted by dmcowen674
All these band-aids will not address the issue, the fact that there are no jobs to support the economy, planned or otherwise.

Hate to say it but I agree with this guy.

Wow Global Cooling is really kicking up, hell must be freezing over

 

[CycloWizard]

Gawd. I think you picked that talking point straight from the pages of the weekly standard.

Explain how honoring the guarantees made to GSE investors is anti business, or how the stimulus package wasn't good for business, along with the other various mortgage programs.

Uncertainty exists for no reason other than repub obstructionism... The direction we took over the Bush era obviously hasn't worked out very well, but they simply won't allow a new one to be taken... They seem to want paralysis, seem to relish the thought of a deflationary spiral. Maybe that's because the true Bush constituency is sitting on huge liquidity, recognizing that it'll just become more valuable when cash is king and jobs are even more scarce...

Really? You think uncertainty is the result of obstructionism rather than this magical "reform" wand that the Dems are waving around? How long would you wait to start a business right now if you had been contemplating it? Are you ready to throw your money into stocks in a given industry? I'm not because I have no way of knowing whether one industry is going to be sacked by the next 3000 pages of "reform" that Obama signs. Obstructionism keeps things from changing - that is not a source of uncertainty, as we are already aware of the status quo. Even if the reform is good in the long run, only an idiot would claim that it doesn't add uncertainty in the short term while we figure out what those 3825793257 pages contain and how they'll play out in practice.

 

[dmcowen674]

Quote:
Originally Posted by dmcowen674
All these band-aids will not address the issue, the fact that there are no jobs to support the economy, planned or otherwise.

There are no jobs because of all the uncertainty within the economy.

Some of it is related to the normal business cycle, but a lot of it is related to the Democrats and their anti-business mentality.

Obamacare, cap&trade, card check, the end of the Bush tax cuts etc etc all of these items are anti-business and all over them are supported by the Democrats.

They are creating an environment where a lot of businesses are afraid to hire because they don't know what the future will look like.

No you dolt, Obama had nothing to do with the loss of jobs.

The environment created is the one your hero Bush created by design by him and your GOP friends.

 

[Jhhnn]

Really? You think uncertainty is the result of obstructionism rather than this magical "reform" wand that the Dems are waving around? How long would you wait to start a business right now if you had been contemplating it? Are you ready to throw your money into stocks in a given industry? I'm not because I have no way of knowing whether one industry is going to be sacked by the next 3000 pages of "reform" that Obama signs. Obstructionism keeps things from changing - that is not a source of uncertainty, as we are already aware of the status quo. Even if the reform is good in the long run, only an idiot would claim that it doesn't add uncertainty in the short term while we figure out what those 3825793257 pages contain and how they'll play out in practice.

So, uhh, I suppose everything would be peachy and business would start hiring if we just keep on keeping on, apply Bush policy to the problems that Bush policy created, right?

Tell us which industries have been "sacked" by policy change so far so that we can get a better idea of what you're talking about... While you're at it, explain how the status quo supports job creation, too... or exactly what your republican heroes propose to remedy the situation their policy has created...

 

[CycloWizard]

So, uhh, I suppose everything would be peachy and business would start hiring if we just keep on keeping on, apply Bush policy to the problems that Bush policy created, right?

Tell us which industries have been "sacked" by policy change so far so that we can get a better idea of what you're talking about... While you're at it, explain how the status quo supports job creation, too... or exactly what your republican heroes propose to remedy the situation their policy has created...

Strawman much? I never said that the status quo was good, only that change breeds uncertainty. The larger the change, the larger the uncertainty. And I'm not a member of any political party so I have no problem pointing out that the Republicans are as bad as your Democrats in almost every regard.

 

[StageLeft]

Second dip or second stimulus, your choice.

Great choice. And after the second stimulus is the next option third dip or third stimulus? When does it stop?

Guys is right, this would help some people and may jack housing prices. But why stop at 4.5%? Do 3.5%, why stop there? Lock everyone in at 1%. With that I'd be rolling in cash and I could finally start stocking up on real gold or out-of-country assets.

I think the gov could easily just send out checks again but in the minds of some (like me) when the government is so desperate for the economy it's sending checks out what does that tell intelligent people? It tells stupid people to go buy a flat screen. It tells smarter people that things are pretty dire and that money should go into paying down debt or savings.

The government will continue to try and juggle this but so far all it's getting for its efforts is stalling the progression of what would have been a worse recession, though doing so at great expense.

Many sane economists do think a second stimulus is going to be necessary. Hopefully they wont waste the money on tax cuts.

Second stim will be like the first, going heavily toward state workers so they can pretend this is not a major recession.

 

[WackyDan]

I have a better idea: quit putting band-aids to hold a limb on long after it should have been amputated. Inflating housing prices again is not a solution. Want the economy improve? Then quit dicking around with every knob on the control panel and let people know that they are again in control of their own destinies, that their best laid plans won't be ruined by more government intervention, and that the rules of the game won't change every week.

AMEN? Germany didn't do a stimulus and they are kicking ass economically compared to the rest of the EU. They cut spending, got very creative in how they funded unemployment, and now the rest of the Eu is pissed at them for throwing the whole Union out of balance. Go figure.

Why do we reward failure with more stimulus, more taxpayer money?

We bought a house well within our means, a modest home in a modest neighborhood....I have no credit card debt, no car payments. I don't even have a flat panel TV as of yet. Not because we're poor ( our household income was 6 figures before I was laid off ), but because that 12 year old tube just hasn't died yet. I don't give a crap about the Jones next door and what they drive or how fancy their TV is compared to mine.

I digress... But here is the deal for me. I saved and I saved. When I was laid off at the end of April, I wasn't stressed out. I have only the mortgage and utilities to pay, and regardless of unemployment and my severance, I wouldn't have to worry about not making my modest mortgage payment for years. Now... I wasn't debt free until 2003, my wife wasn't debt free until 2005-2006. It's not like I was making great money for ten years, but only recently for a few years before I was laid off.

So, What is my reward for being responsible with my finances? Why should my tax dollars bail out the neighbor down the street who just had to have the BMW, 60" new tech TV and send their kids to private school? Don't use the argument that losing their home impacts my property value... as I'm in this house for the long term, and have equity still to this day.

The problem with gov't programs like these Mortgage bailouts is that they are generic and cast a wide net. I submit that there are people out there that got caught in a bad deal, and had bad timing that should be helped. Unfortunately I see these programs helping people that had bad math skills, or splurged on the waterfront lake house with boat dock that they just had to have... People that bought the biggest house and then filled it with furniture bought on credit...or they bought back as the bubble grew and cashed out part of the equity on other real estate, decked out SUV's, new boat, etc.

If they would target those that fit a narrow spread of "how and why" they found themselves unable to make their house payment, I would be for it.

If their house is now underwater, then they should walk away and not be bailed out. A home is an investment and carries risk of loss like any other investment. That we are willing to bail out people upside down on their mortgages is beyond reason.

Anyway... I rant... Is the only reward I get for being financially responsible even in my own unemployment simply that my tax dollars will save the stupid and financially inept while keeping my stellar credit score? Please... There are no lessons being taught here.

 

[WackyDan]

Quote:
Originally Posted by dmcowen674
All these band-aids will not address the issue, the fact that there are no jobs to support the economy, planned or otherwise.




No you dolt, Obama had nothing to do with the loss of jobs.

The environment created is the one your hero Bush created by design by him and your GOP friends.

Yet jobs continue to be lost and not created. CEO's continue to be quoted on the current administration and their policies implemented or proposed as a reason they are not hiring. You have to be deaf and blind not to be tuning into that channel. This admin is not business friendly and it shows.

 

[Fingolfin269]

AMEN? Germany didn't do a stimulus and they are kicking ass economically compared to the rest of the EU. They cut spending, got very creative in how they funded unemployment, and now the rest of the Eu is pissed at them for throwing the whole Union out of balance. Go figure.

Why do we reward failure with more stimulus, more taxpayer money? [snip]BLAH BLAH BLAH

Why are you so against the American Dream, WackyDan? WHY? You and your 12 year old TV are not helping this economy at all. Responsible Americans are in debt. Do your part and then beg for a government handout. It's the only way.

/sarcasm

 

[GoPackGo]

Lowering rates on a mortgages is long term stimulus.