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A sharp increase in the price of used cars of as much as 36% during the pandemic when supply chain problems made it difficult to find new cars, puts lower income buyers under greater financial stress. This meant buyers tended to have much older cars, from 2013 or 2014 that were over 10 years old with close to 100,000 miles. And more likely to breakdown costing a lot to repair. Combined with this need for major repairs the cost of repairs went up 13% in the last year, with a shortage of mechanics plus costlier parts. As a result some buyers of older used cars are unable to make their car payments and are falling behind. This WSJ report looks at the growing problem with some buyers simply stopping payments on loans taken out to buy used cars they could not repair because of the size of the bill.

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As the final Republican tax bill is debated in Congress on December 19, 2017, Senator Bob Casey cited the following points from the Joint Committee on Taxation Report on the floor of the Senate.  1. Americans building their hopes that their pay checks in February 2018 will be increasing are in for a big disappointment said Senator Ron Wyden of Oregon, a senior member of the Finance Committee. The Joint Committee on Taxation estimate is that for the 57 million families making less than 100,000 dollars a year the tax cuts in the Republican legislation will either not reduce their taxes or reduce the taxes by about $100 a year. 2. The bill does little for the big tasks facing America of rebuilding failing infrastructure. Senator Casey cited 4500 bridges needing repair or replacement in Pennsylvania alone. It also does little for health care access for middle class families and is likely to lead to 10% increase in health care premiums. Affordability of college and other hurdles of middle class and working class families remain unaddressed.   3. The $9 billion in the estate tax cuts would finance the Children's Health Insurance program which has expired.  4. The $36 billion in tax cuts for corporations comes at a time when corporate profits are at the highest they have been in 15 years, according to Vanguard founder Bogle. He also points out that wages as a percentage of GDP are the lowest in 15 years. The tax cuts in the Republican bill are not likely to correct this imbalance.  5. The share of GDP of people making more than one million dollars in 1980 was 11%, this is up now in 2017 to 20%. This has led to questions about the wisdom of these tax cuts which disproportionately benefit a very small percentage of Americans who do not need these tax cuts, and come with significant sacrifices for the middle class in terms of what is available in public services, and the cost to their children as infrastructure and access to health and education is made more distant because of a growing U.S. debt from this tax cut. The big problem then with this bill is that it further damages intergenerational mobility in the U.S., undermining the foundation of a democratic society. Damage has already happened in the past three decades as Federal Reserve chairman Janet Yellen pointed out at a conference on Economic Opportunity and Inequality on Oct. 17, 2014, saying-"The past several decades have seen the most sustained rise in inequality since the 19th century after more than 40 years of narrowing inequality following the Great Depression." This is why there is substantial agreement in the media from the Wall Street Journal's Greg Ip to Krugman in the New York Times that the bill fails to correct a harmful trend, and goes further in the wrong direction for a democratic society.       ...

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Details of the $825 billion stimulus plan. Renewable energy does well under the plan including production tax credit for renewables, with $32 billion for a "smart" electrical grid for which GE makes components and lobbied for. Renewable energy producers win an extension of production tax credits now convertible into cash for companies whose losses leave them unable to use the credits. Transportation infrastructure green projects did not do so well, with $32 billion for transportation projects and only $10 billion for mass transit projects.The Natural Resources Defense Council had compiled a list of more than 80 environmentally friendly infrastructure and transportation projects worth about $405 billion. Only a small number of these projects made it. What is in the stimulus to create jobs and stimulate capital investment? Businesses get bonus depreciation, which speeds up depreciation deductions for companies that invest in plant and equipment. The stimulus doubles the amount small businesses can immediately write off for capital investments and purchasing new eqipment, and gives incentives for businesses to invest in renewable energy. States get help with $90 billion going to increase the federal share of Medicaid payments, and an additional $79 billion to help states avoid cutbacks in education and other services. And there is a "Make Work Pay" tax credit for $500 per worer and $1000 per couple. Experts say the effects of the stimulus will be felt in the latter part of 2009 and into 2010. Which is one reason the view of economists that there would be a second half recovery does not reflect conditions on the ground. Goldman has revised its view to 2010 and even that may be optimistic. One example of what has happened in the stimulus in this respect is that the earlier optimistic view of largeinvestments in science and technology, broadband networks, and transportation projects for fast rail and transit have all been trimmed down. Part of the reason may be that the bill for the nation's banking system revival may be larger than realized as an additional amount of $15-20 billion is being negotiated for Bank of America and more money will go to Citigroup. $6 billion is shown for highspeed internet access for rural and underserved areas. Science facilities get $10 billion. Repair of public infrastructure (read roads and bridges) gets $31 billion. School modernization gets $21 billion. And modernization of health information technology systems gets $20 billion which its hoped will provide equivalent or higher returns to pay for some of the universal health care costs, and preventative care gets $4 billion. There is a tax credit for R&D work on energy innovations and renewable energy production of $20 billion, and $32 billion for a "smart electricity grid." These are the proactive parts of the stimulus that create something new and make improvements. They add up to $144 billion. So much money goes to shore up the existing services and supplement incomes, and to relieve stresses on the banking system, and other ways to shore up the system, that the proactive expenditures are only a small fraction or 17% of the $825 billion stimulus. And all the time the federal deficit and debt increases with these huge outlays just to shore up the system. The Heritage Foundation Data Analysis Director Mr. Beach told Congressmen at a discussion chaired by Congressman Cantor (R), on January 16, 2009, that the federal debt would reach 92% of the nation's GDP in 2009 from 58 billion or 70% in 2008, with the $825 billion for stimulus. The federal deficit would go up to $1.31 trillion or 9.2% of GDP up from $541 billion in 2008. See the research paper on the Heritage website. ...