Here It Comes: Obama Considering Another Fiscal Stimulus

Tyler Durden's picture

It just never changes:


Bolded bullets aside, good luck passing another fiscal stimulus Dear President when you can't even issue debt without stealing money from government retirees.

From Bloomberg:

President Barack Obama’s advisers have discussed seeking a temporary cut in the payroll taxes businesses pay on wages amid economic reports suggesting the recovery is slowing, according to people familiar with the matter.

The idea, in preliminary stage of discussion, is among several being debated in the administration with the aim of boosting hiring, the people said on condition of anonymity to discuss internal deliberations. The unemployment rate in April rose to 9.1 percent, the highest level this year, and the economy is a main focus of the political debate in Washington.

The discussion reflects the political constraints the White House is operating under with the Republican majority in the U.S. House pushing to cut federal spending. A hiring stimulus based on a tax break for employers may have an appeal to Republican lawmakers, many of whom have called for measures to help businesses.

A temporary break in payroll taxes also would echo a centerpiece of the deal Obama and congressional Republicans reached in December 2010 to extend tax cuts enacted during the presidency of George W. Bush. That package included a 2- percentage-point reduction in employee contributions to the payroll tax during 2011. The tax finances Social Security and Medicare and is divided between portions paid by employers and employees.

Obama said at the White House yesterday that he’s interested in “exploring” with lawmakers from both parties extending some of the stimulus measures that were part of the tax cut package “to make sure that we get this recovery up and running in a robust way.”

The people familiar with the discussions would not characterize how seriously the idea is being considered or whether it’s moved beyond initial discussions. Other ideas that have been discussed -- and rejected, according to some administration officials -- include a temporary holiday on corporate taxes on repatriated foreign earnings.

And what permawrong Wall Street aparathick lemmings gets quoted? Why the man who had the NFP number off by 300%+ Joe Lavorgna of course:

In an analysis released shortly after the December 2010 tax-cut deal, Deutsche Bank Securities economists Joseph LaVorgna, Carl Riccadonna and Brett Ryan estimated that the employee payroll tax cut would boost gross domestic product this year by an additional 0.7 percentage points.

Enter another speechless moment, especially since it was yesterday that we discussed just how worthless the first $787 billion fiscal stimulus really was:

QE 2 Was A Disaster: Here Is Why US Fiscal "Stimulus" Was A Complete Failure As Well

and a half years ago, Christina Romer, then still employed by the Obama
administration in the position of Chair of the Council of Economic
Advisers penned "The Job Impact of the American Recovery and
Reinvestment Plan" - a report predicting the impact of a fiscal
"stimulus" that took out $787 billion from the pocket of American
Taxpayers (subsequently discovered to cost even more)
and put that money...somewhere. We are not sure where, because
according to a chart now made legendary for its complete failure to
predict the future, it sure did not go into creating jobs. Below we
present the original chart that made the January 10, 2009 presentation,
and superimpose upon it the reality of the past two and a half years. It
is simply stunning. And while we are here, and discussing the abysmal
failure of QE2 (the impending arrival of QE3 notwithstanding), it is
amusing to hear the whimpering of the likes of one Richard Koo, who is
now claiming that all along the money from the Fed's monetary stimulus
should have been invested in the form of a fiscal one. Well, Dick, below is the impact of your fiscal stimulus....AND it also includes the impact of $2 trillion in incremental monetary stimulus. Combined, both
fiscal and monetary stimulus has now missed the worst case projection
for US unemployment for 30 months running. Here is the simple truth:
both monetary and fiscal stimuli are abysmal failures, when the economy
is mean reverting to a state where it was hijacked from courtesy of 30
years of "great moderation" - and there is nothing that can be done to
stop it. Correction: there is one thing - the Fed can destroy the dollar
in its attempt to disprove simple physics. And, ultimately, it will.

From the original ARRA proposal:

And the outcome:

Nuff said.

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alexdg's picture

So they can't even pass the debt ceiling raise and they're going to add even more fiscal stimulus?

Fukushima Sam's picture

Lol, Obama must be an EHM.

I think I need to buy a gun's picture

gold revaluation.....if they raise the price high enough all the jobs will be coming back we will be on our own oil and there will be chaos for a few years thats all.....the dollar is the new peso.......

Weisbrot's picture

a guaranteed way for a lasting stimulus

1> BHO along with the cabinate & senor staff resigns

2> the bernanke & timmah resign

3> pelosi, reid, & frank resign

business & economic sentiment will soar like never before

this must be done as soon as possible

please inform all of the above that it is their duty to step aside and let those that are able and uncorrupted take charge


Pure Evil's picture

The Bilderbergers would shvt bricks and piss blood.


Of course we would still have Boner and Wienerschnitzel, (the new Bevis and Butthead),


(Boehner & yes Weiner)

Spastica Rex's picture

That's pronounced B-AYYYYYY-NUHR, citizen.

Pure Evil's picture

My bad, I thought it is was boner, as in woody, better known as Rep. Weiner.


Stickin' it to the peasants since 1913.

TruthInSunshine's picture

I hereby nominate this song for Obama's 2012 Official Re-Election Anthem, so enjoy:

Curtis Mayfield - Pusherman

It's just the perfect tribute, and works for The Bernankstain, too! LULZ.

cossack55's picture

I always liked Brother Have You Got a Dime.

TruthInSunshine's picture

That's good, too.

I also like an Irishman Abroad Telling It Like It Is, though it's prose, and not music, but fantastic nonetheless.

An Irishman abroad tells it like it is
Michael's picture

I approve of every spending program the federal government can pull out of its ass.

It will make the explosive complete and total economic collapse that much more a spectacular explosion as the entire world collapses in a black hole of debt. 

TruthInSunshine's picture

Man, I see in fight club the strongest and smartest men who’ve ever lived. I see all this potential, and I see squandering. God damn it, an entire generation pumping gas, waiting tables; slaves with white collars. Advertising has us chasing cars and clothes, working jobs we hate so we can buy shit we don’t need. We’re the middle children of history, man. No purpose or place. We have no Great War. No Great Depression. Our Great War’s a spiritual war… our Great Depression is our lives. We’ve all been raised on television to believe that one day we’d all be millionaires, and movie gods, and rock stars. But we won’t. And we’re slowly learning that fact. And we’re very, very pissed off.

Things that go bump's picture

Excuse me.  Who are those paragons of whom you speak?

oncefired's picture

We need to hasten the bankruptsy of the nation - the problem can't be solved. We will have some overdue pain, we can perform a French revoltion on all the big banks and politicains, then pick ourselves up, dust ourselves off and start over

LongBalls's picture

It is that time. Time for the "R"! We need to abolish the Fed. and end fractional banking. Game ON!

Widowmaker's picture

Give me a break.  The way to help small business is trust busting - start with all those taxpayer subsidies and zero taxes.  How the fuck can small biz compete with corps that treat tax as revenue?! End too big to fail/jail.

Yen Cross's picture

 YA GOTTA BE (straight up and honest)

     I don't like spiders, BUT I respect the  BITE!


                                                                                                   oUCH ' YEN

FEDbuster's picture

Why couldn't they all just take a trip to Russia on a Polish jet?

Weisbrot's picture


or even a token event like aboloshing the thing known 0bamacare would go miles in creating jobs as the uncertainty of employee expenses would be gone.


Cleanclog's picture

What is EHM?  Even Huger Moron?

pslater's picture

"What is EHM? Even Huger Moron?"

Economic Hit Man from the Charles Perkins book "Confessions of an Economic Hit Man."

Fukushima Sam's picture

Economic Hit Man.  The guys who work hard to get developing countries to accept huge social and infrastructure projects with the goal of getting them in so much debt that they default and you can get them to do whatever you want.

See the book "Confessions of an Economic Hit Man".

The developing nations don't bring in enough money to keep this Ponzi boat afloat plus they have a new world order to implement so the financials turned their sites on the American people.  Subjugation through debt.

jesse livermoore's picture

i have read the book and you summed it up nicely.  the book really opened my eyes

nmewn's picture

I'm still trying to figger out this;

"President Barack Obama’s advisers have discussed seeking a temporary cut in the payroll taxes businesses pay on wages..."

I have no earthly idea what that winds up meaning...unless they are going to allow businesses to cut back on their "contribution" to Social Security.

hedgeless_horseman's picture

LOL...or maybe reducing our contributions to unemployment, because the states' UE accounts are so flush with cash.

nmewn's picture

Thought about that after I posted, what the business pays into unemployment insurance...they're still pushing from the wrong direction IMO.

All taxes need to be cut on wage earners right down to the local taking both parents having a job to afford a middle class existence is complete bullshit...I know, I am.

No wonder we got 12yr olds killing people...its fucking ridiculous.

We both know how unbacked fiat ends, so all this is pointless anyways, but we could be a whole lot less stressed as we wait for it ;-)

Thisson's picture

Sorry friend, but cutting your income taxes won't actually improve your standard of living because you are still competing with other employees.  Accordingly, once tax rates changes, wages will adjust to a lower nominal level (but same real income level) as competition among job-seekers drives down wages to the new equilibrium level.

On the flip side, companies would create more jobs because it would be cheaper for them to hire employees.   

smlbizman's picture

so they are going to give me a tax break on the employees i don't have any i dont have me one of them phd things but if my phone started ringing than i would hire regardless of the taxes...but wtf do i know, no phd , no  fancy beard and... no demand

knukles's picture

Every fucking thing else already done has been a failure so in desparation let's try employer tax cuts.
Tax cuts!
Not for the working man, for employers.

It was business tax cuts in Paul Krugman's cubicle by the Obama Administration.

nmewn's picture

They were all trained at the same academy, I really suspect they are not genuinely evil personally...just fucking clueless.

Manthong's picture

I believe he said employer payroll tax - that means their portion of social security.

Like Social Security isn't operating at a deficit now either.

WTF, it's all smoke and mirrors anyway.

Sam Clemons's picture

I didn't think businesses paid taxes anyways. See GE.

Can't they just take clients to some worthless sports game (to artifically inflate prices so much that the proles can only enjoy the bread and circuses from home or once in a blue moon) so they can deduct as a business expense?  Or Wall St style, order hookers, blow, and lots of alcohol and call it a business expense.

Sam Clemons's picture

It is legislation like this that made America great.

G-R-U-N-T's picture

He's Brilliant!!!!! God help us! Ugh!

laomei's picture

Why is this so fucking impossible for them to grasp? If you want to increase jobs, you must increase demand without cutting supply.  How do you do that? By dumping cash into people's hands.  No not the rich people, not the upper class or upper middle class.  Unemployment payments have been proven again and again to be the biggest boost to the economy so far.  Why is that? Because people getting them, spend it! Tax the rich more, kill taxes entirely for everything under 20k a year, remove the cap on FICO taxes, set capital gains tax equal to or higher than income tax levels.  Take all that extra money and dump it into the economy in the form of infrastructure improvements and repairs.


As long as you direct the flow of cash driving the economy, you can ensure it primarily goes towards GOOD THINGS.  Contrary to GOP idiocy... rich people do not create jobs.  Demands of the proletariat are what create jobs, rich people only part with money when forced either by market demand or government regulation.


It's really as simple as that... It's time for all the banks to take a haircut and deal with it, if they don't want to play ball they can be nationalized.

ChartreuseDog's picture

So, you dump cash into the lower lower to lower middle classes, who then go out and buy cheap junk from China. China then improves their infrastructure, builds factories, etc.

The people with the money who would be investing in new plants, new technologies, then invest their money in places with lower tax rates. Eventually, they just leave.

Net job creation here: negative.

Thisson's picture

You, sir, apparantly are unfamiliar with the concept of Moral Hazard.  Unemployment Insurance and Supplemental UI already cover 99 weeks.  That is MORE than enough.

Further, central planning is the road to serfdom.

The answer is to cut the burden the parasites impose on the productive.  That means cutting spending, reducing government, and cutting taxes.  Let the MARKET figure out where to deploy those extra funds, not the central planners.

zaknick's picture

Central Planning at its finest from the same ppl who brought you Hitler and
Communism! The zionist money laundry bankstr cartel!

Thomas Jefferson argued that the United States needed a publicly-owned central bank so that European monarchs and aristocrats could not use the printing of money to control the affairs of the new nation.  Jefferson extolled, “A country which expects to remain ignorant and free…expects that which has never been and that which will never be.  There is scarcely a King in a hundred who would not, if he could, follow the example of Pharaoh – get first all the people’s money, then all their lands and then make them and their children servants forever…banking establishments are more dangerous than standing armies.  Already they have raised up a money aristocracy.” Jefferson watched as the Euro-banking conspiracy to control the United States unfolded, weighing in, “Single acts of tyranny may be ascribed to the accidental opinion of the day, but a series of oppressions begun at a distinguished period, unalterable through every change of ministers, too plainly prove a deliberate, systematic plan of reducing us to slavery”. [7[

Orly's picture

So even Jefferson saw these plans as plain as day even way back then.

I just don't understand what people don't understand.  Theory aside, there is a definite conspiracy afoot and has ben for three hundred years.

Nathan Muir's picture

Apathy is a bitch.  Although I heard a rumor that Ron Paul can cure it...

Oh regional Indian's picture

Why Orly, that is what Cognitive dissonance is for. It's easier to be comfortably numb than to be wide awake.


Orly's picture

Of course but it is harder to be comfortably numb when your entire lifestyle has been stolen from you.  That is where all of this is headed.  I can see that many, many more people than I ever thought possible are waking up to what is really going on.

For the first time in a long time, I have hope for all people who yearn to live free.

topcallingtroll's picture

You talk like such a socialist sometimes that I am surprised to see you against central planning.  Maybe you only support "good" central planning.

zaknick's picture

Public, truly democratic central planning is nothing more than a society coherently facing its challenges on the way to providing a decent standard of living fir EVERY CITIZEN.
Fraternity, equality, and liberty (and a good dose of grassroots Austrian economics supported by the state intelligently) is the formula.

Each country develops its own resources and trades for what they don't have. Widespread knowledge of physics and chemistry open up Nature's bounty for all. No monopolies and especially no private monopolies controlling the money or the other commanding heights of the economy are private wealth but public goods.

That is how you support and grow a truly widespread middle class.

Direct democracy through a secure forum online is how it is supposed to be. One citizen one vote, no politicians stealing our ppl's and our countries potential or giving away its wealth to foreigners.