Lets talk about the Stimulus Plan.... 4

[shaunsnoll]

Hi everyone,

please excuse me if this is discussed somewhere else, but i thought this part of the forum would be appropriate

i'm just looking at this ~90B$ in US infra spending over the next 2-3 years from the Obama plan and wondering what you guys take is on how it will impact the US E&C Industry? I have found the members here to be of high quality and intelligence so will be interesting to get your feedback and thoughts.

thanks!

 

[shaunsnoll]

but my initial take on the stimulus plan is that it will have very little affect on the US Engineering and construction firms, the loss of state and local municipal funding for infra will be substantially more than the increase in infra spending from the stimulus bill.

you guys thoughts?

 

[shaunsnoll]

initially i was kind of hoping the large engineering and construction firms would be able to escape this global slowdown due to their big backlogs and this stimulus plan but now i'm not so sure....

 

[cranky108]

If the federal reserve bank had done as it was promised, in the early 1900's, we would not have this problem in the first place.
So congress is tossing money into the fire the federal reserve made.

I believe we should lay all the blame on the congress. But sence very few people read enough history to understand when the problem was made, we are doomed to repeat history.

 

[jmw]

When we view the new president addressing the financial crisis we should be careful not to think that here is a new broom come to clean up the mess caused by others; in fact he had a life in politics before he became president and he is, or was, part of the problem - think: "Community Reinvestment Act" and ACORN.

In other words, it was expedient then to promote some dubious economic theories for political advantage and now those chickens are coming home to roost.... but why should we expect that he is now able to deliver the solution? did he learn something more about economics in the interval? and what has changed?

Back then it was about getting the banks to lend money to people they didn't consider a good risk and now the need is to bail those banks out and put the economy right....

http://www.telegraph.co.uk/comment/...-sub-prime-house-that-Barack-Obama-built.html

http://www.mediacircus.com/2008/10/obama-sued-citibank-under-cra-to-force-it-to-make-bad-loans/

http://obama2.com/archives/tag/community-reinvestment-act/

In the UK we have the same situation, the chief culprit is now expected to suddenly be sufficiently smarter now to be trusted to fix a problem he caused.

To be fair, I suspect it is not going to be an easy presidency because peoples expectations far exceed what any one man can deliver and he may be unfairly judged as failing when he may achieve more than any other person could do but fail to deliver what people expect him to do.
This doesn't seem like an auspicious start.

JMW

http://www.ViscoAnalyser.com

 

[msquared48]

This is a quote of a portion of an article posted on the internet today regarding the educational portion of the stimulus plan...

"Higher Education:

The maximum Pell Grant, which helps the lowest-income students attend college, would increase from $4,731 currently to $5,350 starting July 1 and $5,550 in 2010-2011. That would cover three-quarters of the average cost of a four-year college. An extra 800,000 students, or about 7 million, would now get Pell funding."

Do I understand this correctly? Is someone really saying that the average cost of a 4 year college education is under $8000.00 (1/3 more than 5500)? I think that this is firm evidence that whoever cranked the numbers here did not attend any accredited four year college - possibly an on-line college? Twenty years ago, I was paying over 4K per year for my son to attend the UW as a resident. I understand the costs have gone up to $1500 to $2000 per quarter now, just for the tuition, let alone for any books and lodging.

This is ridiculous. Someone is not being realistic here. I don't thik it's me.

Mike McCann
MMC Engineering

 

[ivymike]

Is that the amount per quarter?

 

[msquared48]

I wondered the same thing, but it certainly is not stated as such in the article... If so, the writer of the article should be shot.

Mike McCann
MMC Engineering

 

[655321]

During the last 8 years President Bush and his buddies in congress ran the US National Debt up almost 5 trillion dollars. That's a 100% increase in the National Debt since 2001. Further, our country hasn't balanced a budget since the 50's. Now all the sudden everyone is worried about deficit spending? Please.

I'm no economist, but on the cusp of a depression probably isn't the best time for the county to all sudden get some religion about spending borrowed money. If we can borrow 5 billion with Bush for...i don't know what....I'll give Obama and the Democrats a shot with their stimulus plan.

Anyway, my company is definitely expecting some benefit. The're capital improvement projects I know that are on hold right now that will be released once some funding becomes available. I'm certain there's a lot small businesses out there like ours where a couple modest infrastructure projects could be the difference in our doors being open or not in 2010.

 

[MechEng2005]

I'm with VC66. Throwing money around may cause a short term boost. However, eventually that money is going to need to be repaid. In some cases, this will work out. If, for example, you loan money to start a company, then that company sells a ton of stuff to foreign nations, you tax their profits, and you can end up better off. However, I don't see infrastructure projects (or last year's stimulus that was given to individuals) achieving a long term gain. I think the US needs to decide what it wants to be doing in 10-20 years and invest in that. If the US would spend such large sums of money to provide a better education, research new technologies and the like, then I think they will have items that will be in demand in the future. The only thing building infrastructure will do is provide a short term boost (maybe, if we are lucky) and at the end you produce nothing but increased maintenance costs and a smile for the guy that gets a shorter drive to work (until the short-term benefits run their course and the economy dives again and he loses his job anyways).

Put the money into SOMETHING THAT WILL PAY OFF! I don't care if it's new military equipment (assuming we will sell equipment to allies, not use it hold the world hostage), the auto industry (increase US market share), biological research, drug research, new or more efficient forms of energy, a new pet rock, whatever...

-- MechEng2005

 

[ewh]

Chia Pets for everyone!

"Good to know you got shoes to wear when you find the floor." - [small]Robert Hunter[/small]

 

[jmw]

Its all quite simple really.

The money will go into two main areas:
One: to bail out the banks who were made to lend sub-prime and now have to foreclose on properties that aren't worth the money lent to buy them
two: to secure those properties for the poor folks who never could afford them in the first place.

How much money will be left that is actually spent on something that is "wealth generating" is the question. The trouble is that socialism spends on services not wealth generating so it is a bad time ion the US and the UK.

Truly speaking, it is all good money going after bad.
If these guys played poker, I'd play poker.
They forget that it doesn't matter how much money is in the pot, it isn't yours any more. You only put more money in if you can win the pot, not because you have an emotional attachment to the money you already put in.





JMW

http://www.ViscoAnalyser.com

 

[ctopher]

I thought this was funny:

Chris
SolidWorks/PDMWorks 08 3.1
AutoCAD 08; CATIA V5
ctopher's home (updated Aug 5, 2008)
ctopher's blog
SolidWorks Legion

 

[B16A2]

I think throwing too much money at US infrastructure at once will be counter productive. States wont be able to manage the influx of projects, the contractor supply can only expand so quickly, and engineering can only produce so much at once. 2-3 years? That's what it takes to design some of the heavy infrastructure projects. My guess is a lot of the design will be outsourced and the contractors will be excessively wasteful with the taxpayers money.

Overall impact for US E&C will be poor compared to a 7-10 year plan like it needs to be.

 

[Zapster]

Perhaps the realignment of the housing construction bubble into an infrastructure balloon will make things better when the balloon bursts? Our politicians are just trying to ensure that the house of cards does not drop on their watch. I would rather take the financial hit now instead of gifting the national debt to our children and grandchildren. I cannot understand how any responsible person can see the solution to their self-made problems is to hijack the future wealth from the next generation.

I am disgusted with the deficit spending by both the democrats and republicans. For those who choose to blame the last 8 year increase squarely on the republicans, you should rethink what has taken place the last two years when the democrats were responsible for much of the deficit. Now let’s see how much the deficit rises with Obama kowtowing to the congress.

 

[ivymike]

m^2: looked it up online, and found that "The amount of the Pell Grant varies from $400 to $4,050 (annual figure) depending on the student’s eligibility."

oooh, that ought to cover books.

 

[satchmo]

I am hearing that the "tax cuts" work out to about $8 to $13 per week. Stimulating.

 

[imcjoek]

"I am hearing that the "tax cuts" work out to about $8 to $13 per week. Stimulating."

Ah, good. I can afford that value meal I always wanted.

 

[MechEng2005]

It seems to me that the root of the problem is deficit spending. How long can you keep spending on "credit"? However, the govenment is going to "bail out" the banks and financial institutions that made loans without thinking about "What if things don't work out perfectly?". Meanwhile, the government will continue to borrow money and assume things will work out perfectly. Seems like the fox watching the hen house to me.

-- MechEng2005

 

[Dtuck]

If a big bank can't get it's act together, maybe there should be more little banks and credit unions. People should watch where their money goes, stop using credit and seek not to depend on big anything. There's no violent revolution necessary. Just spend your money with people who are making good products that last(from whatever country). You will buy less stuff, enjoy it more and the banks and businesses that don't deserve to be in business will go out of business the old fashioned way, they'll have NO customers. We the people are 70% of the economy. Vote with your dollars and not your credit. The mistake is thinking that "they" have to fix any of your financial problems. We are the solution.

 

[ivymike]

that works for an individual, perhaps. what if I'm in finance at a company looking for $5B to finace a capital improvement? should I go to Prosper.com and hope that Warren Buffett shows up?