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!

 

[cranky108]

What kind of infrastructure?
Wind farms for our electric cars.

Get real, the best way to get out of this is a war.
Bomb Mars now!!!

 

[civilperson]

655321,
My recolection of current history has two years when the budget was both balanced and the national debt reduced by 363 billion, 1999 and 2000. This was a result of a good economy and a congress vs president of differing parties. (Then came George W. and the 5 trillion growth in debt.)

 

[rapt]

Actually the logic of deficit spending when necessary is good, as long as there is a surplus when times are good. As long as the average over time is 0, they have it right.

Unfortunately for the USA, during the good times of the last 20 years there has basically been deficit spending (except for the 2 years mentioned above) in both the good and bad years along with major underspending in some important areas. Thus, when the really bad years come along, like now, the country is basically bankrupt before you start the real decifit spending. And it is not just the government, companies like GM etc have done exactly the same. They were losing money in a boom market, so now they have no chance. I hope you all have deep pocketrs to pay it all back beacuse the brilliant individuals who made fortunes out of it all will not be donating it back!

I feel sorry for you, but you voted for them (50.1% of you anyway), even though their policies are effecting (and stuffing) the whole world.

In Australia we have had surpluses for most of the last 10 years so a little deficit spending in the current times should not hurt too much as long as it is spent on the right things. Unfortunately, the new idiots in power here have got that part wrong.

 

[KENAT]

In principle the idea of bringing forward some of the infrastructure work which would need to be done eventually anyway; and in the process at least temporarily employing some of the people that would otherwise be on unemployment or welfare etc. is very appealing to me. Seems to me it wasn’t that long ago, after the Minnesota bridge collapse that many on here were bemoaning our lack of investment in infrastructure so isn’t this a chance to kill 2 or more birds with one stone?

Now I'm not dumb enough to think that contractors etc. can necessarily go from building timber framed houses to refurbishing/replacing bridges & the like, but they should be able to do refurbishment of schools and other government owned buildings, shouldn't they?

I've started to wonder if the bill should have been broken out, rather than a ridiculously large amount of $ in one go it could perhaps been split up, something like:

- Short term stimulus such as infrastructure projects ready to go or even in work but lacking/soon to lack funds, defense projects in a similar state and maybe even some planning for further infrastructure projects to potentially be funded. Essentially things that can be started within a few months and generate things of long term value to the country while keeping a few people off unemployment (and off course hence giving them money to spend to generate more jobs…)

- Short term 'bail-outs' to states or federal agencies etc. to maintain essential services.

These 2 to have been arranged in about the current schedule.

- Medium term stimulus similar to above but covering jobs that still need some planning/engineering before ground is broken etc. Perhaps jogs that can’t start before the end of this year but could start by 2010 and be complete within a year or two of then. Some ability to vary the amount actually spent depending on how the economy is doing at the time it comes to be spent would be nice but may be impractical due to the uncertainty it implies.

- Long term recovery plan. Including money for education, research, studies (real ones not bottom less pits for partisan think tanks etc.) into things like a comprehensive energy policy, possibly some longer term infrastructure but based on needs/logic etc. not just pandering to lobbyists be they from the oil industry, environmental groups or anyone else fixed on only their narrow view point.

Honestly, I have my doubts about the benefit of ‘cut taxes across the board’ approach/elements or the ‘tax refund’ like last year, for reasons stated by others above.

At the risk of sounding like a Philistine, I’m not sure the ‘national endowment for the arts’ is worthy of funding under cover of ‘stimulus’. Although I have some sympathy for design studies for new Coast Guard ice breakers and even contraception for those on benefits (that second should get some flames from the average eng-tips member).

However, I’m sure the above breaks to many fundamental rules of economics/politics…

thread769-236603 is related.


KENAT,

Have you reminded yourself of faq731-376 recently, or taken a look at posting policies:

http://eng-tips.com/market.cfm?

 

[moltenmetal]

We Canadians are getting on the infrastructure band-wagon too.

The trouble with building infrastructure is that to politicians it's sexier to build new than to fix the old crap our forefathers built for us.

So we'll get NEW stuff- new bridges etc.- when we already are having trouble finding the money to fix the OLD stuff...nobody wants to put money into operating grants for transit systems or for fixing roads and bridges, because nobody wants to raise taxes to pay for it.

To you Americans: try supporting the physical infrastructure you need for a country physically much larger than yours but with 1/10th the population (ie. Canada), then cry to me about an "infrastructure deficit"!

At least our banks were regulated and kept more or less out of the sub-prime mess. Sure, they took a few write-downs and their share values took a tumble, but none of the major Canadian banks is anywhere near collapse. Sometimes regulation actually works...

 

[jmw]

And if you bring forward a lot of stuff, what happens when you've done it?

There ain't no such animal as "bringing forward".

The idea that you are "bringing forward" something you'd have to do anyway is that you'd have to pay for it anyway.
True.

However, as a "there, there little taxpayer, don't worry about high finance, leave it to the experts. Just think you'd be spending this money anyway." it sucks because it doesn't tell you you still have to find bundles of cash for something to replace it in the future (unless they do it so badly it has to be done again).

OK, it was something you figured you might be able to afford in a year or two and you are going pay a penalty by doing it now anyway.
But you can't then leave a void in the future and that means replacing it in the future with something that probably wasn't so essential and which you couldn't afford anyway and which will be priced in a sellers market - government funding for economic stimulus fix-ups doesn't have to be justified like ordinary jobs which means the cost/benefits will be way out of wack and the costs will probably go way over budget anyway and everyone will "justify" it as "necessary" ergo, a seller's market.

Of course, it may be that the Iraq reconstruction game has proven so good a money spinner for some that the chance to play the same game on home turf has some influence here... just a different quarterback and coach.

JMW

http://www.ViscoAnalyser.com

 

[cranky108]

So after the projects are completed, are we going to bring forward the tax increases?

The irritating part is some of us are paid less than the top of the industry in good times, but our jobs are more stable. And we have to carry these top earners in bad times.
Maybe they should have put some money back, so we would not have to carry them.

 

[IceNine]

How about a tax on finacial transactions...put into a fund to bail these jokers out when their speculation blows up in their faces.

 

[cranky108]

I thought the problem was they did not do finacial transactions, although they said they did.

I still like the tax on people who don't vote. After all who is going to vote agenst it.

 

[shaunsnoll]

"I still like the tax on people who don't vote. After all who is going to vote agenst it. "

HAHAHA!!!!!


do you guys think that the big companies who will be bidding on these government contracts will get very low margins on the projects they DO end up winning since the government obviously has all the negotiating power here?

 

[TheTick]

Business tax = tax on earners who have no vote.

 

[ctopher]

From our friend macduff:

http://www.stimuluswatch.org/project/by_state

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

 

[KENAT]

JMW I'd have thought that part of the plan for what to do after the projects that have been 'brought forward' would be that private industry/construction will have improved and at least partially filled the void.

Also while I perhaps wasn't explicit enough I agree that improving existing infrastructure whould probably take priority over completely new items. Though the amount of money in the current plan you might think there'd be at least some for both.

Probably wishfull thinking tough.

There are some fairly significant road works near where I work, that will stop in a few days because the State is in a financial crisis. This seems an example where some federal money might be of benefit - rather than stopping it and restarting it in X years when the state gets their poop in a group.

KENAT,

Have you reminded yourself of faq731-376 recently, or taken a look at posting policies:

http://eng-tips.com/market.cfm?

 

[jmw]

Just looking at the Stimulus list... noted West Virginia with 1 project and Florida with 1752....

Now one thing the American citizen should look out for is that which we see in the UK.... the money gets spent in the ruling party's strongholds....
e.g.

http://www.thisislondon.co.uk/news/...healthcare, transport and policing/article.do

http://www.telegraph.co.uk/news/new...eats-first-in-the-queue-for-lottery-cash.html

So if you live in a democrat state, you're OK.
Of course, if the same traits are found in US politics as UK, it will help you personally if you or your company donated to the Democrat cause....


JMW

http://www.ViscoAnalyser.com

 

[jmw]

Of course, WV needs to get its politicians organised or they'll get nothing but take a look at that LA SOlar Power Plant program...$2,160,000,000.00 and compare to some others...by the way, california seems to have the most plans prepared..

JMW

http://www.ViscoAnalyser.com

 

[ctopher]

I noticed the short list of projects for my city; they were already approved to do this work last year. The funds were set already. The stimulus $ will end up for police overtime pay, or city council bonuses.

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

 

[rapt]

The deficit is funded in future years by increases in tax receipts and lower social secutity costs, not increased taxes. As the economy improves, companies make more profits and more people have jobs so tax receipts increase and government costs reduce.

The basis of this has to be that the taxes are set at the correct rates to end up in balance over the long term. Unfortunately for USA, this has not been the case. The taxes are so low compared to government spending that the country is in deficit in the good times rather than in large surplus, so yes, your taxes will have to increase and by a lot more than they should have, because they have been too low compared to spending (doesnt feel like it does it) for decades.

RE the infrastructure being brought foreward and therefore not there to be done in a few years when it would normally have been, that is the idea. The infrastructure is built in the bad times and when the economy recovers private sector production takes over.

It is all very logical as long as the tax rates/government spending logic is correct. Unfortunately USA's is not and you are now in hock to the tune of $12trillion and increasing by trillions per year.

The idea is that the government goes on a debt binge when the private sector goes off it and vice versa. For the last couple of decades in the US, both the goverment and private sector have been on debt binges and you have nothing to show for it.

 

[jmw]

Given that we are in this mess because politicians (and economists) couldn't see the wood for the trees, it is probably a bit much to expect them to know how to get us out of a recession/depression.

Somehow it seems a bit unfair that any fool can get us ino a recession without knowing how they did it but why should it require knowledge and skill to get us out?

One wonders to what extent recovery will be "accidental", a normal part of the continuing cycle of things.
Of course, politicians will always be around to claim credit and apportion blame, as necessary, but who knows what is true? Certainly politicians wouldn't know the truth if it bit them. They do recognise the opportunity to make a quick buck for themselves and their cronies.
A recession is a great excuse to spend money, if not wisely, then well. Some very questionable expenditures will be made which normally would be frowned upon but which will be "justified" as "it was necessary".

On the other hand, given the politicians need to keep the people cowed and frightened, a depression is as useful as any other scare. Perhaps they won't need the AGW scare any longer and we can at last let that drop? I mean, come on guys, one scare at a time please.

JMW

http://www.ViscoAnalyser.com

 

[TheTick]

There are analysts and economists who saw it coming. There were a few well-informed members of Eng-tips that also saw it coming.

 

[civilperson]

The American voters are getting the government that they deserve including the Stimulus package of deficit spending. A minority of citizens vote and a majority of voters follow some party line to the detrement of third party candidates. One issue candidates such as balanced budget and Value Added Tax reform are outside the pale. Eventually, the pain of living with the current crop of venal politicians/lobbyists/corporate funded campaigns will motivate the citizenry to a radical change or even a revolution. The economy, (and currency), requires trust in the future and when the trust is eroded the economy stops working.