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« Distinguishing Opinion from Analysis | Main | Seeking Balance from Bloggers and Media »

February 13, 2008


Bill aka NO DooDahs!

On a second reading, your quips reminded me of this gem from the Devil's Dictionary:

"Politics: A strife of interests masquerading as a contest of principles. The conduct of public affairs for private advantage." ~ Ambrose Bierce

Bill aka NO DooDahs!

Wait! We're not totally socialist now?


Rob - A useful approach to your question would be to think of rebate receivers as having many different characteristics. The plan was designed to get some cash into the hands of those with a high marginal propensity to consume. That is part of the economic discussion. It is to be expected that some will save or pay down debt.

Banks are already willing to lend to qualified borrowers and the rates are attractive.

The psychological question is important. I suppose that if many people become convinced that this problem, unlike all of those that have come before, has no solution, and that all of our leaders are bumbling idiots -- well then it might take longer to work out.

You are definitely pointing to the concerns of many.




What if people don't spend? What if they pay down revolving debts or save in anticipation of recession (look at what I earn by paying down my debt vs. the opportunity cost of deploying that money for living if I lose my job)? Does that increase in capital on hand make the banks want to lend?

Does it matter this time around? What if we go totally socialist in November and take a hard right on the Laffer curve? What about spending discipline? Can we afford our own habits? At what point psychologically are we pushed into recession?

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