New Stimulus Goal: Move From Big Negatives To Zero Growth

Now that the government has spent nearly $1.4 trillion to stabilize the financial system, economists and policy makers -- and the president-elect -- are trying to figure out how much must be invested in a stimulus package to stop the recession, and what that money should be spent on.

The size of a possible stimulus plan rises as the economy contracts, and that is happening at a 4 percent annual rate, according to current estimates, or eight times as fast as it was this summer. Just offsetting that contraction requires a federal infusion of at least $400 billion, many economists calculate. And even that would not restore a healthy economy.

"The hope is that the next stimulus package will be large enough to move the economy from big negatives to zero growth," said Mark Zandi, chief economist at Moody's Economy.com. "That is the benchmark today: zero growth."

Read the whole story here.

Comments

[Bitsko]

Estimated receipts for fiscal year 2008 were $2.66 trillion.

* $1.25 trillion - Individual income tax
* $927.2 billion - Social Security and other payroll taxes
* $314.9 billion - Corporate income tax
* $68.1 billion - Excise taxes
* $29.2 billion - Customs duties
* $25.7 billion - Estate and gift taxes
* $50.7 billion - Other

Why are corporate taxes third on the list? Move them to the top, please.

[KillTheMessenger]

Corporate income tax is third on the list because corporations can reinvest and offset their earnings and there is nothing wrong with that. In a well managed corporation the corporate income tax paid should be very close to 0. If it's not, I would fire the CFO and the head of accounting and hire someone who actually knows how to do their job. Most of the individual income tax and the social security and other payroll taxes are from corporate revenue, anyway. And that is how it should be.

[darthdarcy]

Zero growth that's something to strive for alright...!

Get rid of this guy...!

[Tom95134]

Finally, someone is waking up. European economists have been saying for some time that U.S. growth would be negative through 2009.

Republicans will do everything in their power to limit the amount of a stimulus package and push for larger tax cuts. Clearly tax cuts don't work because the money doesn't circulate in the economy. Put people to work and they spend.

From the article, "The financial sector bailout does not address this decline. Rescuing banks and other lenders has little direct impact on economic growth or job creation. The chief goal of the bailout is to get credit flowing again from reluctant and damaged lenders." Now, all we have to do is get the banks to start lending again. I wonder what happened to all this influence that Paulson had? In my opinion, all the bailout did was push money into the pockets of those that had more than they already needed.

[Excitedforfuture]

It's not that tax cuts don't work, it's who the tax cuts are given to. Giving tax cuts to big corporations and the wealthy does not put money into the economy! Giving tax cuts to the middle class will put money into the hands of people who will spend it and help move the economy!

The trickle down theory does not work, we know it, but when will the republicans finally figure it out?

[KillTheMessenger]

The Republicans know it, too, they just don't mind lying about it.

[KillTheMessenger]

If you can't win, just redefine winning as not losing.

And if that does not work, redefine it as not coming in last.

And if that does not work, either, go for the Olympic spirit... participation is everything.

:-)

[SoD1]

The Illusion of never-ending capitalistic Growth and prosperity for a "few", is just that, an Illusion. FACT is in every economical System "growth" can only be "generated" AFTER creating a decline firstly!! In other Words, in Economy like in many various things in Life humans -Americans in particular- move one step forward while stepping at the same time two steps backward.
Only if we come to realize that "Stability" alone is more worth than "GROWTH", will we ever be able to succeed!

Beside, aren't we all fooling ourselves to 'believe" we could solve these intentional finacial scam of all times without "resetting" our economical principles/system, while the whole Economy remains a total FRAUDULENT playground for greedy, egocentric gamblers?

Man of today is as naive and socio-emotionally primitive as a Cave man! I clearly would question the thesis of human intellectual growth alone through Evolution

[rabiddog6708]

Setting the bar low....a lesson brought to us by Dubya and friends. No matter how low the bar was they could always limbo under it through sheer incompetence.

[Midnightrain]

Here's some free advice: Don't print any more money. Make the stimulus package a form of consumer debt relief applicable to all households making under $150,000 a year. Pass immigration legislation granting employment status to all undocumented workers; doing so would allow a fresh stream of tax revenue into our system as well as offset ever-rising health care costs. Purchase all mortgage loans made to qualifying families between 2004 and 2007, and refinance them at an affordable rate. Then invest in education. Make sure that our children are taught financial literacy so that this crap never happens again.

It is ignorance combined with blind trust that has led us into this unspeakable mess.

[ChaiKat]

I like your idea. I could use some debt relief. The stimulus checks that went out earlier this year was spent on bills in my case and the case of many of my family and friends. Nope, didn't get enough to buy that new dining room set I need to stimulate the economy.

[Viper]

No cash send outs! That does not insure where the money is spent. Borrowing money from China that ends up stimulating China!

It needs to be invested in Green , MFG and infra structure... not people buying IPODS made in China... thats how we got here.

Regards