with mainstream America.

That will take a while.

But you are right--if we insist on trying to run the whole world--maintain military presence worldwide--and continue spending tax money on wasteful "defense" policies, we're toast.

I did inhale.

Where are you getting your information on the budget negotiations? Not disputing what you're saying, but where are you reading about $400 billion in tax cuts for Snowe, Collins, and Nelson?

I think a lot of people would be irritated that they voted for Republicans in Democrats' clothing, and would call and write for the most liberal members of congress to reject the bill.

Plus AMT
Plus the money states will use to cut taxes out of the stimlus bill (already happening)

That's going to come to 400 billion.

They are also taking out 200 billion in spending from the 900 billion number. That leaves 500-200 = 300 billion in spending.

Pre-compromise does it's lethal work.

Always put your best bill forward, let them carve from that.

The few hundred billion that are at stake in this bill probably won't matter all that much. The US and world are headed into the mother of all corrections, and the so-called stimulus plan is not going to break the fall. Moreover, the banksta bailout is just papering over systemic rot.

Probably the wisest course for individuals right now is to sell all excess stuff and build a bunker of liquidity for the coming tsunami that is going to wipe out a wide swath of wealth built on the sand of debt and the loose pebbles of wishful thinking.

Or you could apply for reverse offshoring.   IBM invites laid-off U.S. employees to work in India

Redefining the possibilities of the word "offshore," IBM has invited its recently laid-off U.S. workers to find work with the storied company in developing countries like India – where salaries are a fraction of what Americans are used to.

Progressives swallowed hard when they learned of Rahm Emmanuel's appointment as White House Chief of Staff, but rationalized that it would take a pile-driver personality to pound a progressive agenda through a reluctant Congress. Now Obama's initiatives are wilting in the face of feeble Republican opposition and Rahm is not making any difference.

Stirling's depiction of a permanent plutocracy in progressive clothing looks to be more convincing every day. I still hope he is wrong and that Obama can bring real reform to our deeply troubled nation.

The patient is already dead, and you have chosen not to like anything that anyone does since probably last November. That's fine.

First, a tax cut is stimulus and it does represent a faster stimulus than spending, albeit a weaker stimulus. Spending is stronger, but slower. Hence the mix. The goal is for one to take effect immediately and then the other to kick in over time. I think the economic bad news has had as much to do with the mix as anything, as all parties see the need for quicker stimulus that can only come through tax cuts.

The original proposal had tax cuts in the form of an immediate approximately $25 to $40 per paycheck reduction in payroll withholding paired with a tax credit. That is stimulus and it has been there all along.

One of the latest 'tax cut' additions is tied to spending on a high ticket item, automobiles and it emerged as a result of the latest auto data. That is stimulus. There is a tax credit on buying an automobile.

The spending side of the stimulus bill has been strong and holding up quite well, and in truth the Senate has been allowing the stimulus totals grow larger with the addition of tax cuts, so some of these additional tax relief are not coming at the expense of spending, it simply is not one thing or the other.

I just don't see this shrinking thing. Frustration with Republicans is understandable from Democrats, but the Senate is currently functioning as it should be. The fight the messiness, it to me is totally refreshing. I watch and go my god it is Democracy in action!! It is not a bunch of republican drones marching mindlessly in lockstep, being dragged before bush if they disagree. It is negotiation, give and take, a search for ideas, frustration, cliff hangers, risk of failure.

I believe in democracy and bipartisanship, and the messy process. For me it has been wonderful to watch, and the model provided by Obama is nothing short of amazing. Respect, listening, allowing the process, persuading. I do not see at all how he is diminished in this process, and his approvals are the highest of any modern President right now.

Don't know what else to say. This is also the earliest a bill of this size has ever moved through Congress. As I like to remind it is only February 4, so the whole process is nothing short of amazing.

from the FT:

By Martin Wolf
A hyperpower’s place is in the wrong. This is particularly true when, as last week at the annual meeting of the World Economic Forum in Davos, the hyperpower in question is barely represented, at least at the official level. But, truth to tell, the critics of the US – led by prime ministers Wen Jiabao of China and Vladimir Putin of Russia – had an easy story of incompetence and malfeasance to tell.

Yet, however easy it may be to blame the US for the current global economic woes, it is also to the US that the world looks for a solution.

The general mood in Davos was one of gloom verging on despair. The gloom is justified, as the update of the World Economic Outlook from the International Monetary Fund makes plain. Global economic growth is now projected to fall to a mere ½ per cent this year, its lowest rate since the second world war. Output in high-income countries is expected to fall by 2 per cent, the first annual contraction since 1945. Industrial production and merchandise exports are in free fall, as consumers decide they do not need that new car or other goody right now (see charts).

Given the rate at which they have been downgraded, reality could be far worse even than these forecasts. The global downward spiral of uncertainty, caution and cutbacks in lending and spending may continue. Alternatively, policy action may turn the ship around. But that action must be decisive. This is particularly true for the Obama administration, on which so much depends. It has a golden opportunity to reverse the spiral now. After that it becomes part of the problem. So far the evidence is discouraging. It should be far bolder.
...
Protectionist pressures are rising rapidly, not only in finance, but in trade. On the former, Gordon Brown, UK prime minister, turned up in Davos as hypocrite-in-chief, bemoaning the rise of the financial protectionism his own government has been practising. On the latter, nothing can surpass the folly of the Buy America provision in the draft US stimulus package. This is an invitation to retaliation. For a country that must export its way out of its slump, this is mad>. For one that made an open global economy the keystone of its foreign policy for two generations, it is vandalism. Is this the change we must believe in?

Contrary to views expressed in some circles, notably in the US,depressions are neither good for us, nor unavoidable. What is needed is determined and globally co-ordinated action. The lead must come from the US: it remains the hyperpower; the economic system is one it promoted; and the crisis had much to do with mistakes its policymakers and private institutions made, even if aided and abetted by mistakes elsewhere.
...
Unfortunately, what is coming out of the US is desperately discouraging. Instead of an overwhelming fiscal stimulus, what is emerging is too small, too wasteful and too ill-focused. Instead of decisive action to recapitalise banks, which must mean temporary public control of insolvent banks, the US may be returning to the immoral and ineffective policy of bailing out those who now hold the “toxic assets”. Instead of acting as a global leader, there is resort to protectionism and a “blame game”.
...
We are living on the cusp of history. The priority is to reverse the downward spiral of despair through overwhelming and concerted action. That will only occur if the US now gives the leadership we need. Mr Obama may even find, as many presidents have found before him, that leading the world is easier and more rewarding than cajoling a recalcitrant Congress. This may not be the challenge he expected. But it is the challenge he confronts. History will judge his presidency on whether he dares to succeed.

http://tinyurl.com/bdroxp

Willem Buiter, also blogging for the FT, railed at length about the "Buy American" provision in the stimulus package now going through the Congress, and indeed devoted his screed to assailing protectionist sentiment creeping into practically every major economic players' "recovery" actions, including Gordon Brown's risible "British jobs for British workers" sloganeering.

http://tinyurl.com/cr556d

Obama had a honeymoon?

--
Town Called Dobson: Blue Life in Red America
A Daily Political Cartoon

You have a bill that will be somewhere proximate to $900 billion to be metted out as tax credits to go in folks pockets and spending (stimulus). So lets say $300 billion goes to credits to families and unemployed folk, food stamps, and people buying cars, and $600 billion goes to build stuff, and just be spent.

All the economists indicate that a tax cut metted out in payroll or to unemployed and poor get spent and this basically works out to a one to one ratio of benefit. For reasons I do not fully understand spending goes at a ratio of $1.50 of benefit for every dollar spent.

So $300 billion is worth $300 billion in GDP and $600 billion is worth $900 billion in GDP or $1.2 Trillion. This is going to be spent or credited over a two year period of time or $600 billion in each year. Gross domestic product in 2008 is $14.4 trillion so the stimulus adds 4.1% of GDP in each year over a two year period.

The stimulus looks to me like a winner no matter what. It will probably keep GDP positive in both 2009 and 2010 as efforts in 2008 did with the $300 billion stimulus in the form of tax cuts did (adding something like 2.1% to GDP in that year, with year over year at a positive 1.3% GDP, pretty nice considering.

Not rocket science, and it will probably work. Consensus forecasts are for real GDP in 2009 to be .5% to 1%, and to 3.3% by 2010. I would wager that it will be something in that realm with a stimulus package as envisioned. And without stimulus we would be looking at -3% GDP in 2009 and -1% GDP in 2010.

Another rule of thumb: every 2% of GDP creates about one million jobs. so a total of 8% of stimulus is 4 million jobs. Obama is cautious and says 3 million. The CBO does its analysis and concludes 1.3 million to 4 million. That's how it works. And by the way that math keeps unemployment below 8.5% to 9%.