Thursday, Jan 24, 2008
'Helicopter Ben' good to his word!
bbc news: Deal reached on US economic plan
House of Representatives Speaker Nancy Pelosi said Congress would act on the deal "at the earliest date, so those rebate cheques will be in the mail".Some 117 million US homes will receive a rebate of up to $600 for individuals and up to $1,200 for married couples.Washington is moving fast to try to avoid the US falling into a recession.
Good grief, now they're posting out greenbacks to everyone to prevent the collapse.
Posted by tick tock @ 10:09 PM (829 views) Add Comment
23 Comments
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1. it_is_going_with_a_bang said...
If thats a one-off payment - tax rebate etc. surely it's just beer money and a good night out or two.
Can you imagine Flash Gordon giving us all £500 each.
What real difference would that make.
None whatsoever at all.
Apart from a few good weekends maybe! ;-)
2. growler said...
Its not April 1st, so we have to assume the mighty USA is giving money away as last effort to head off a recession - sorry - downturn. I'm afraid the price of easy money is super humble pie. I'm not American, but this is humiliating for an economy such as USA.
3. enuii said...
I have never seen anything as desperate, they are giving all their Al Bundy's and Homer Simpsons (married with 3 kids) $2100 to spend.
To those who are seriously in debt it will make no difference, those on the edge will stagger on for another 3 months or so and for the rest it is some pocket money to spend on imported electronic goods or other retail entertainment.
This is one stunt that is definitely no in the book of Gordonomics, or at least I think it isn't.
4. japanese uncle said...
The rich don't need such petty cash, while the poor will not spend it but put it to the repayment of debt, will be of no effect at all.
St Barnanke must resign his post and serve as alternative rescue dog in the Alps in atonement for his sin.
5. quiet guy said...
I offer two observations about this (unbelievable) story:
1) Hopefully the failure of this effort will become apparent in time to discourage the BoE from trying anything similar.
2) The cynic in me suspects that this has more to do with the coming American elections rather than serious economic management.
Please Merv! Please BoE! do not adopt Zimbabwean economics.
6. Stevie Dee said...
And people say that the likes of HPC are talking the masses into a recession. The cowboys have been running the show for too long, and it is really now showing. F**ked by April.. so buy your tins of food..
7. d'oh said...
What shocks me about this is that the currency markets reacted positively to it. How is a one off benefit cheque going to sort this mess out? Flabbergasting.
8. symo said...
Absolutely no recession in the US then. What continues to amaze is that these people claim to know what they are doing and have a 'plan' to combat future problems. Surely it would be in the FED's interest to let everyone in the world know what these problems are and then take action to prevent them. The $500 or whatever the final figure is will only contribute to oil producing nations wondering why they price their product in such a useless form.
9. cornishman said...
JU said "while the poor will not spend it but put it to the repayment of debt".
Perhaps that is the idea.
A lot of the problems with the financial system stem from people with no money being given mortgages. If their mortgage payments can be made for a few months more then the Easter 'buying season' for houses will kick in and houses will start selling and everyone will live happily ever after...
10. Imhal said...
Why don't they send the good people of the UK a cheque too?
We promise to spend it on American goods to help boost exports - honest we do!
HAL
11. speculatorone said...
I wonder what GB & AD will dream up?
12. uncle tom said...
The reaction of the markets was weird - what should have been greeted with disbelief and as a desperate measure seems somehow to have restored confidence...
It shows how unconcerned the US has become over the integrity of its currency - who in their right mind would buy US treasuries now?
13. george monsoon said...
I think this has more to do with a whole generation of people in the Western world, who are used to spending what they don't have. For some reason the governments think they can dish out some panacea that will cure everything without making people pay back what they owe?
Has the whole world gone mad? I feel very ill at ease with the situation.
14. Debtfree said...
This is a sign that USA is collapsing under its own weight at an alarming rate.
Wonder how the yanks will survive compared to the russians when they collapsed ?
Be interesting to see if certain states become countries, such as california and florida.
After all, thats what happened with the eastern block.
15. Hunthunthunt said...
"Money for nothing and your chicks for free."
16. hpwatcher said...
putting off the inevitable
17. alan said...
@George Monsoon,
"I think this has more to do with a whole generation of people in the Western world, who are used to spending what they don't have".
I agree - The interview with Precter (see later post) covers your point in depth.
18. dbnazz1 said...
It looks like desperation.
19. Stevie Dee said...
This is not CAPITALISM!!!
20. d'oh said...
It is desperation...what bothers me is that the markets are still behaving as if this, the 0.75% cut and the tentative Ambac/MBIA bailout makes everything okay. These are signals that things are very very not okay. Anyone care to comment on the psychology of the bounce in world markets that these announcements have seemed to engender? I thought the participants were paid super £££$$$ for their special abilities and insight...
21. stillthinking said...
The people who work in the market are faced with getting no money, or getting lots of devalued money, so its not a difficult choice for them. I don't see that this is a difficult choice for Bush either, the US owes a lot of money to the rest of the world and they are reducing the value of the debt. For everybody else its a problem. I don't see that its a problem for the US, and as the dollar goes down, their exports go up. Demand for US goods will go up as their price goes down.
I also read somewhere that due to the foreign holdings by the US government being roughly the same as their debt, devaluing one increases the relative value of the other, so for them no difference. Apart from the debt.
I don't understand why the dollar hasn't gone down more though if this is a sign of the future.
22. drewster said...
@ju: You're right, most people will just use the money to repay debt. It's a transfer of debt from private balance sheets to government balance sheets. I think it will have an effect though. US GDP per capita is $44,000; and if each person gets $500 then that's a 1.1% boost to GDP straight away.
23. Will said...
Who says that the markets are behaving as if the 0.75% makes everything okay?
Inflation acts on share prices as well.