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I'm anxious to see if/what Obama's economic stimulus package will be.
The tax rebate" they sent out last year did not boost the economy as the feds had hoped. Of the $78 billion in rebate checks, "only" $12 billion was spent, the rest was saved or used to pay existing debt. Economic Stimulus - The New York Times and
Will a New Stimulus Work? | PARADE Magazine (http://www.parade.com/news/intelligence-report/archive/will-new-stimulus-work.html - broken link) and many, many other sources.
Looks like the plan for next year's package is aimed to extend jobless benefits, send food aid to the poor, dispatch Medicaid funds to states and spend tens of billions of dollars on public works projects.
Well, the public works projects is a good thing - that provides jobs as well as stimulating growth via improved infrastructure.
Looks like he may be reconsidering his original proposed tax plan. Let us only hope.
The World Link: Obama promises action on economy (http://www.theworldlink.com/articles/2008/11/10/news/doc491532c79864b208915819.txt - broken link)
and many other sources.
The majority of companies in the US are NOT mega-companies so take them out of the equation and let's just look at the non-megas. The new tax plan will have a great impact on the smaller companies. The owners of these companies don't just take the money and have a big time. They reinvest in their company to make it grow. Growth means more jobs. The majority of new jobs in the US is created by small businesses.
Raise the taxes of these businesses and redistribute it, increase taxes on capital gains and dividends -- there is less money for reinvestment in the company, less growth, and less new jobs created.
There is a really good article at Obama’s Tax-Plan Disaster by Cesar V. Conda on NRO Financial=
which makes reference to data by the IRS which shows that "half of all business income is taxed at individual rather than corporate tax rates, and about two-thirds of all flow-through business income is earned by small-business owners with annual incomes exceeding $200,000."
The article also goes on to point out how increasing capital-gains taxes reduces people's incentive to invest and that directly impacts demand for and values of stocks especially in ventures with high risk.
I know everyone likes to beat up the mega companies. Do they pay their fair share? I don't know. But I do know that many/most of those mega-companies are public and if you are buying stock/ mutual funds, there's a great chance you have funds in their stock. If they are making money you are also.
Have been reading a lot on economic opinions/projections and, contrary to my hopes, the experts are saying that it will be late next year before we may see any type of real turnaround in the stock market. Some are saying it may get a good bit worse before it gets any better.
Just hope Obama proves to be a good thing for the US.
I'm not as concerned at what might come, but I am concerned about what's going on 'right' now.
The Treasury Dept is handing out cash with little to no oversight, no defined structure and giving banks leeway to use the funds for purposes not originally intended.
Quote:
Five banks in W.Va. take federal bailout cash
by George Hohmann
Daily Mail Business Editor
CHARLESTON, W.Va. -- Five banks with operations in West Virginia - Chase, BB&T Corp., Huntington, FifthThird and SunTrust - have announced they have either accepted or have been approved for federal cash infusions as part of the $700 billion rescue plan approved by Congress on Oct. 3.
The United States Treasury has designated $250 billion of the rescue plan money for investments in big banks like Chase and regional banks like BB&T, FifthThird, SunTrust and Huntington.
That has put community banks on edge.Although the rescue plan is aimed at persuading healthy banks to lend again, some fear the federal government is picking winners and losers and the large banks will use the federal money to buy smaller rivals.
Those fears surfaced last week after John Allison, BB&T's chairman and chief executive officer, said the bank would probably participate in the program and might use some of the money to finance acquisitions.
The fears were heightened Friday when PNC Financial Services Group Inc. announced the Treasury was investing $7.7 billion to help it acquire National City Corp. after National City was denied government assistance.
Camden Fine, chief executive officer of the Independent Community Bankers of America, said his trade organization will lobby for changes. "It will be a battle royal from day one in Congress" next year, Fine told The Wall Street Journal. "The one part of this system that has functioned well has been the community banking system. . .We're going to be screaming every step of the way." Neither Joe Ellison, chief executive officer of the West Virginia Bankers Association, nor Donna Tanner, executive director of the Community Bankers of West Virginia, could be reached immediately this morning for comment.
Mike Hudnall, president and chief executive officer of Freedom Bancshares, said today, "We're not going to take any federal money. We're well capitalized. We're making loans. If we were going to do an acquisition, I certainly wouldn't want to use taxpayer money to do it." Freedom Bancshares is headquartered in Belington and has additional offices in Bridgeport, Philippi, Elkins and Buckhannon.
BB&T - the largest bank in West Virginia - announced late Monday that it will receive $3.1 billion in federal money. "We support the Treasury's efforts to stabilize the credit markets and restore confidence in the financial system," BB&T's Allison said in a prepared statement. "Fortunately, our own strong capital position has allowed us to meet the lending needs of our clients, even during this economic downturn. For us, the additional capital will not only extend and strengthen our lending capacity, but provide other strategic options as well."
Huntington Banks announced Monday it will receive $1.4 billion. South Charleston native Thomas Hoaglin, Huntington's chairman, president and chief executive officer, said in a prepared statement, "With this investment, Huntington's already strong capital position will be strengthened even further." "Though we have remained an active lender during these difficult times, this investment enables us to expand our lending efforts to both existing and new customers throughout our Midwest footprint," Hoaglin said. "It also provides us the capacity to continue our efforts to assist borrowers currently struggling due to the economic downturn in our markets. "Further, the capital allows us to give consideration to any strategic opportunities that may arise to expand our franchise through the purchase of weaker banks. Collectively, these activities are expected to provide long-term benefits for our shareholders."
FifthThird announced Sunday that it has applied for $3.4 billion in federal funds. The company did not say what it plans to do with the money.
SunTrust said Monday it has applied for $3.5 billion. James Wells, SunTrust's chairman, president and chief executive officer, said in a prepared statement the infusion "enhances SunTrust's already solid capital position and will permit us to further expand our business and take advantage of growth opportunities."
Wells said he anticipates "prudent deployment" of some of the capital. The prepared statement said that deployment might include areas "such as expansion of careful lending, expansion of business capabilities and the exploration of potential acquisitions in line with the bank's long-term strategic goals."
Chase is one of nine banks originally approved by the Treasury Department for participation in the program. The government will take a $25 billion stake in Chase. ared statement said that deployment might include areas "such as expansion of careful lending, expansion of business capabilities and the exploration of potential acquisitions in line with the bank's long-term strategic goals."
Chase is one of nine banks originally approved by the Treasury Department for participation in the program. The government will take a $25 billion stake in Chase.
Vec when inflation and exorbitant fuel kicked in-- that ate the $$ before it ever got in their hands. Bear market now, low consumer confidence, economic mess stretching beyond our boundaries... it's not going to be a simple fix. Sobriety is good, but it doesn't feel good right away.
Small business is in many ways at the same mercy of mistakes made by higher ups like the rest of us. Believe me I don't appreciate having to pay for others mistakes anymore than you do. Worried about your biz- I hope your company isn't based on luxury items because this bear market is going to take a long time to calm down. You're in a position being smaller to redirect your energy to suit the economy we're actually in, not the one people thought they were in. I wish you well.
Threerun those protections were supposed to be written in. Shareholders wind up being given access to where money goes and where it doesn't, so ultimately the strings attached to any $$ will be complete transparency. No more hiding under a rock like a weasel.
Weird how a 'bailout' (as if to help break even) gets translated into bankrolling corporate take overs between goliaths. Just give me some truth!
Safeguards written in? That's rich. Even if there were, nobody is watching!
Quote:
Want to hear crickets chirping? Ask Washington who's keeping an eye on its $700 billion economic bailout.
Lawmakers and the Bush administration frantically hammered out a gargantuan package to save the nation's economy earlier this fall. But their efforts to recruit watchdogs for their creation have lacked the same urgency.
Take the White House: it was supposed to name a special inspector general to eyeball the bailout, according to the emergency legislation President Bush signed into law Oct. 3. To date, though, no one has been named.
Bush spokesman Tony Fratto said he "would expect" the president to pick someone before he leaves office next January. But, he said, "I can't give you a sense on timing of any personnel decisions."
Since last month, the bailout effort has churned out over $170 billion to dozens of banks, signed contracts with voided conflict-of-interest clauses – and generally operated with many of the normal rules of government hiring and spending largely sidelined.
That doesn't appear to be causing concern among those who pushed the bailout through Congress with sky-is-falling urgency.
Party leaders on Capitol Hill were supposed to name a special oversight commission to check how the bailout was using its legal authorities, according to the law. But over a month has passed without a single name put forward.
"There have been some beginnings of internal discussions," a spokesman for House Minority Leader John Boehner, R-Ohio, said late last week. "Still working on names," said a spokesman for Senate Majority Leader Harry Reid, D-Nev.
"No," said a spokeswoman for House Majority Leader Steny Hoyer, D-Md., when asked if her office had been talking with others about the panel. Senate Minority Leader Mitch McConnell, R-Ky., did not respond to requests for comment.
They might want to pick up the pace: the panel has its first report due Jan. 20, 2009, according to their legislation.
Yea, I had read that bailout money was going to be used for bonuses, to purchase other banks, etc.
Oh our govt - like the Feds paying people to NOT grow corn. Saw a show where some woman out west bought a newly constructed house with a small lot. She got $7,000 to NOT grow corn. She had NO intention of growing corn and was stunned when her real estate agent told her she was eligible to receive the money.
I'm concerned if wages don't come up and jobs don't materialize quickly enough. Another tax link for you vec... The Tax Foundation - Number of Americans Outside the Income Tax System Continues to Grow
Two ways of looking at it-- it hurts people who succeed and have to carry the bottom half of the country- true. Would that success be possible if they weren't here? Probably not. Problem is when money doesn't trickle down (where have I heard that before??) and fair wages aren't paid it becomes a subsidized wage through tax structure. 5 employees @ $5/hr and none of them live well (making them seek gov't assistance for basic means) except the owner, or 2 employees paid on par with cost of living means the load gets distributed more evenly. What happens to the other 3 employees? Other jobs or no job? I can't tell you.
Three the fed has gotten put on the hot seat more than once the past 2 yrs. I think he's going to start crying for his mommy any minute now. I think all the finance magazines have a gigantic dart board with his face on it. Maybe we should have him on suicide watch or something.
The Treasury must got a great deal on paper and ink!! Because their sure printing a lot a money to give away!! At least those working at the treasury have job security, for now!!!!
The problem with the Bailout is simple...evidently, enough money was not thrown at the big gaping hole in our economy...
It's like fanning a guy who is dead...Our economy is dead because the investment capitol is being sent to China...Their (China's) bailout went to plug holes in a vibrant, working/ growing economy...
Business knows that Obama will clobber them with taxes...He said so a thousand times...
The cycle is this: Shut down and go elsewhere...make the money there and come back if its worth coming back to the USA...
Auto Industry? Has manufactured cars with marginal quality...Imports took the market because of quality...
Impossible to solve the problems here...solution? Go into Recievership...discard the Unions and the Benefit Plans...Partner up with overseas countries and try to salvage a profit with what is left..
Business does not exist to keep the eco-freaks happy, do a public duty or save the whales...It's exists to make a dollar...for itself and its investors...when it cannot do that, it changes or dies...throwing 50 billion to the auto industry is like fanning a dead man...He is already dead...
It was euthanasia...Unions, Clean Air Act and its own management, engineering and poor quality goods...
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