The Economic Stimulus Package: A Political Solution for An Economic Problem
Today Congressional leaders announced an agreement with the White House for an ecomomic stimulus package that would provide for rebate checks for American families.
House Speaker Nancy Pelosi, D-California, said at a Capitol Hill news conference.
"Tens of millions Americans will have a check in the mail. It is there to strengthen the middle class, to create jobs and to turn this economy around."
House Minority Leader John Boehner, R-Ohio, said,
"I'm looking for quick action in the House. I hope that the Senate will follow quickly so that we can put this money in the hands of middle-income Americans as soon as possible."
Hubris, thy name is Congress.
Does anyone actually believe that the U.S. government can turn the economy around by dumping tons of money into the market??? (for those who do, I would love to show you some nice property near a swamp in Florida)
Let's just call this plan what it really is - a vote-buying plan by American politicians so that they can pretend to have done something when in reality we would be better off if they did nothing.
I'm particularly interested in some of the questions that aren't being asked about this plan:
- Where does this money come from that is given back to the American people?
- Who is going to be hurt by this plan?
- What incentive is there for the businesses and people who have made poor (and often greedy) decisions over the past few years to change their behaviors?
I have never been more convinced in my entire life that Democrats and Republicans are essentially alike in that at the end of the day all they care about is staying in power. And usually as the expense of the American public.
Technorati Tags: Economics Politics economic stimulus congress white house nancy pelosi john boener ben bernanke
Some answers to your
Some answers to your questions, Will.
1. From the printing press, of course! If we need more money, we can just print it. Right???
2. Nobody, of course. (Reference previous answer for explanation.)
3. Um....you've got me stumped on that one. Maybe if Congress sends you a check you'll stop asking these tough questions. Sheesh, what kind of a patriotic American are you?
Will - Maybe the devil is in
Will -
Maybe the devil is in the details and you missed the complete package, but question #3 seems to show you didn't...
"What incentive is there for the businesses and people who have made poor (and often greedy) decisions over the past few years to change their behaviors?"
The $600 rebate per person is hardly going to help anyone that has mortgage himself to the hilt to buy a house he can't afford. It may put off his foreclosure for a month or two, but it won't help and he'll still be punished by the market for his greedy decisions.
Some of the greediest people were Wall Street bankers who packaged risky sub-prime loans as Grade A bonds. Banks are writing off BILLIONS and these $300 rebates (if that is what they are and not just loans against our 2009 tax liabilities) won't do much there.
Overall, it isn't a horrible package. The economy is based solely on expectations. With the media screaming RECESSION! RECESSION! like it was 1929, politicians had to do something. The package is designed to reassure people that the world isn't going to hell in a hand basket.
Expat - The package may be
Expat - The package may be designed to reassure people, but I think it is having the exact opposite effect. If our elected leaders would get their own financial house in order and then come to us and explain that our economy is not in fact teetering on the brink of collapse, that alone may reassure people. Regardless, though, the current approach is most certainly not accomplishing that goal. The headlines of Congress rushing to avert a financial meltdown are only adding to the angst of Americans.
Wrong plan. Wrong time. Wrong message.
Will and I have very
Will and I have very different economic philosophies, but I agree that this stimulus package is really silly. I imagine many people will, like me, put that money towards paying off a fraction of a much larger bill (credit cards, mortgage, loans, etc.) and that it won't really make its way into the broader economy through any kind of consumption. Nor should it. Most Americans, like me, significantly overspend and more significantly fail to save. Handing out checks for $600 just encourages more of that bad behavior (though it is worth noting that this bad behavior is precisely what the culture encourages from us and is perfectly in line with American values). I think we need to hold these large corporations, as well as the government, responsible for the decisions they have made and focus government spending on services that consistently alleviate people's suffering during these periods of economic turmoil. The whole "give a man a fish" story seems cliche, but if it ever applied perfectly, this is it. Handing out a check for $600 only helps if you're going to do it again next month, and the month after that, and the month after that. The metaphor falls short because Americans know how to fish, but there's no fish to be had.
Dustin Kidd
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