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Wednesday, April 09, 2008

It's official now: George W. Bush is today's Herbert Hoover
Posted by Jill | 5:46 AM
As Herbert Hoover watched the Great Depression decimate the economic lives of Americans, he said:

Economic depression cannot be cured by legislative action or executive pronouncement. Economic wounds must be healed by the action of the cells of the economic body - the producers and consumers themselves.


In other words, "Go shopping", which was George W. Bush's admonition to Americans after 9/11, and it's his admonition these days as well. Where Bush differs from Hoover is that the 24 x 7 media cycle required him to do SOMETHING, hence his signing the legislation that is going to put this country further into debt and give Americans a few hundred bucks that most of them will use to pay off debt.

But in one respect, he's exactly like Hoover, and that is in his insistence that "prosperity is just around the corner", even as every indication is that our economic condition has only begun to swirl around the bowl before being completely devoured by the crapper:

one of the things that's going to happen with this pro-growth package is that not only is it going to affect small businesses like it's affected folks here, but 130 million families are going to get some money, their own money. And of course, the purpose of that is to help boost consumption. We're in a rough time right now; I'm confident we're going to come out of it. And when we do we're going to be a stronger -- stronger and better country.

Congress, of course, is contemplating different measures. And my only advice to them is, one, make sure you give the pro-growth package that was passed overwhelmingly a chance to work, see what the effects are. Secondly, anything they do should not hurt the economy. And thirdly, I, you know, I think we ought to, in terms of pro-growth packages, I think we ought to, again I repeat, give this one a chance to kick in. The experts tell me that this pro-growth package is going to add some -- you know, a percent, percent-and-a-half to the economy here in the latter part of this year. If that's the case, it's going to be an important part of recovering.


Not if they're going to bank it for when they lose their jobs or use it to help pay off credit card debt it won't:

The government's efforts to stimulate the U.S. economy by doling out checks to workers could backfire, according to two surveys asking consumers what they will do with their checks.

Nearly three-quarters of those asked on both surveys said they will either pay down debt or save any money sent to them as part of an economic stimulus package. The remaining quarter indicated they would spend the money, which is the goal of the program.

"Don't expect a big bang from the tax rebate if only about a quarter of that gets actually spent," said Michael Niemira, chief economist at the International Council of Shopping Centers, which commissioned a survey by Opinion Research.

"That's $25 billion, not $100 billion, and it's not clear how quickly it will be spent," he said. What's more, money that is directed toward lenders, be it to pay off mortgages or credit-card bills, is money that's already been spent. In other words, it's already done its job in helping the economy.
ICSC found that 46% of respondents said they would mostly pay off debt with the checks while another 28% said they would save the money. Twenty-six percent indicated they would spend it.

A separate survey from CCH Complete Tax, an online tax-preparation service, found that 47% would pay off debt with any rebate while 32% would save it. Only 21% would spend it.


Of course if you're one of those who has profited handsomely from seven years of Bushonomics and five years of war profiteering and the accompanying oil speculation, you're still sleeping well at night.

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