Taxes!

[Osteomata]

We still have not addressed the important part. What are we going to do about the millions of illegals and generational poor. Throwing money at them does not help. It actually encourages them to do less.

Our discussions probably suffer from the rapid and frequent subject changes, and I doubt bringing the highly contentious issue of immigration back into the picture will do anything but obscure the already wide subject matter. As to generational poor, back in the early portions of this thread I mentioned that the national poverty rate has fell steadily, and did so during a period in which welfare type programs were coming into effect and expanding. IIRC, the current poverty percentage has held steady at 14% for several decades. It has not worsened, so it is arguable that this is not, inf fact, the important part of the economic debate surrounding entitlements. I still contend that programs aimed at the poor pale in comparison to the problems of the elderly, SS and Medicare. You are nibbling at the edges.

I took a minute to think about what you wrote. About how my proposed (well, not mine, just an entertaining email that highlights the frustration of some fiscally conservative American taxpayers) would be too expensive. Does that mean you think the stimulus bill and bail outs should have been scrapped? We could have given every taxpaying citizen 200-500K dollars. That would have solved our entire economy problem! All homes could be owned or at least not foreclosed, new car sales would skyrocket, those in "dead" areas would have the money to move and so on. Instead, we gave it to DB car companies who couldn't manage their way out a paper bag, and to banks that are...well....thieves. It went to feed the red tape state government monsters. I am now on the hook for 50K in taxes just to pay off the deficit, and I have not a damn thing to show for it.

I don't get your math. Total bail out plus stimulus is $4.6T, of which about $2.6 has been recovered as it was provided in the way of temp loans. Even if I assume ALL of it was a total give away/loss, that adds up to $15K per person, but I think $6,500 is more realistic. Not a trivial amount, but perhaps you can elaborate on how you achieve a result 30 times the one my calculator is giving me.

My view on the bailouts: I am worried about the moral hazard of private profit with public risk, but confess that the issue is so complex and beyond my limited understanding of the economics involved. After some discussions with a number of very smart and conservative people connected in some way to the issues, I was surprised by their vehement support for the bailouts as absolutely necessary in a time of total crisis in order to avert global economic meltdown, despite their otherwise fiscal conservative nature.

As to the stimulus, I am agnostic. I just don't know. I have tried to understand some of the principles involved, but economics written by economists bores the tears out of me, and I have had to get it second hand from those who can make it accessible. Suffice to say that I have enough doubt about the issues to respect the Keynesians that insist that deficit spending during recession is a rational course, but worry very much that we will lack the maturity to offset it with surpluses during boom times. I think the safest bet is that whatever long term fiscal package that we end up with, it does not entail big cuts or tax increases until 2013 so as not to further endanger the very fragile recovery.