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TechnoratiBillions in Stimulus Miss the People Who Need It Most
There's something embarrassing -- economically, politically, morally -- about government "bansheeing" to give voters cash handouts disguised as economic stimulus. Does a couple with two kids, making $160,000, really deserve the same $900 as a single mother of one living on tips from her roadside diner job? Does a childless, single lawyer making $74,000 a year really need $600 from a federal government with a $163 billion deficit?
For that matter, it looks like my family -- mother, father, two kids -- will be getting at least $1,200. Can we use it? Sure, although we'll end up saving it, which defeats the purpose of the stimulus. Assuming current job situations remain unchanged, do we need it more than possibly 70 million households that have it harder than we do? No. And most of this "stimulus" handout is going to people who don't need it.
Economically the plan, as the U.S. House of Representatives is due to pass it today, is indefensible. Even if a cash injection into the economy had a chance of preventing a recession (it's doubtful that anything short of China forgiving its $1.4 trillion loan to American consumers could have that effect), the injection the Bush administration wangled with Congress isn't the way. Those who could use the money most in a downturn, not to spend it on consumer frivolities but to pay for basic needs, aren't getting a dime. Some examples:
· Unemployment checks: Unemployment is at 5 percent, up from 4.4 percent a year ago. Unemployment checks run out after 26 weeks. The wanglers refused to extend the benefit even though unemployment checks tend to be immediately spent -- and cushion the blow of unemployment to families a bit better than the lectures of labor officers.
· Job creation: President Bush wouldn't go for spending money on the nation's poor infrastructure, which would have created jobs. The reason: The money would take too long to get back into the economy. In that case, why the $50 billion in tax credits for business?
· Food stamps: One of the most underreported stories since 2005 is the surge in food prices. The International Monetary Fund reports a 75 percent price increase worldwide in three years, after inflation (which explains the $4.50 price tag for a gallon of milk here). Food stamp recipients have seen their benefits severely slashed as a result. Recession or not, they're due for more benefits. The wanglers ignored them.
· Heating oil: Home heating oil was $2.30 a gallon a year ago. It was $3.33 a gallon last week, a 45 percent increase, with another 25 percent increase the Energy Department projects for this winter. The wanglers could have pumped more money into the $2.6 billion federal home-heating-oil subsidy, which would also be rapidly spent. They refused. (Last December, Bush wanted to cut the subsidy by $379 million, Democrats increased it by $409 million. The 14 percent increase is dwarfed by the increases in the cost of oil, however.)
But couples making up to $150,000 will be getting $1,200, and couples without children, making up to $174,000, will be getting some of the hand-outs, as will single people making up to $75,000. The checks won't be mailed until May, which further negates the effects of the package if the country is already in recession. But this is an election year. Instead of booze for votes, as was the old tradition going back to the Founders, it's cash and tax credits.
In principle there's nothing wrong with government intervention to direct the economy. Democrats since Franklin Roosevelt, if not Andrew Jackson, have intervened with equalization in mind. Republicans call that big-spending big government, even though the likes of Dwight Eisenhower and Richard Nixon weren't above liberal tax and social policies for the greater good. Republicans since Ronald Reagan have a different definition of the greater good. It begins around the $100,000 tax brackets and goes up after that. Everyone below that bracket, which is to say 90 percent of taxpayers, is the smaller good and needn't be worried about. As Kevin Phillips put it in "Wealth and Democracy" a few years ago, "the Jacksonian notion that government should not interfere on the side of the rich was reworked into the theorem that government had no business interfering on the side of the downtrodden."
The stimulus package is upper-bracket pandering, further encouraging one of the problems that led to this point: consumption on credit. But if Americans have been consuming on credit for the past 25 quarters in a row, they wouldn't quit spending from running out of money, as the stimulus assumes. They'd quit from becoming fearful that the party may be over. If that's the case, the stimulus, especially this stimulus, won't make a difference. At least one party is over.
Tristam is a News-Journal editorial writer. Reach him at ptristam@att.net or through his personal Web site at www.pierretristam.com.
© 2008 News-Journal Corporation
23 Comments so far
Show AllSure I'll take the money.. pay off a few bills, and save the rest for the storm. If I can afford it I am very much willing to donate part of it to the local food bank, or another charity.
Hi ~Doom and Gloom~ if that has happened wouldn't it screw our thinking up too? Oops, not me, I'm not human. Dougwagner and Therzal both told me so.
If anyone, anyone at ALL, actually believes this incredible, bizzarre plan will do __one single thing__ to help boost the economy, they are either delusional,__ utterly stupid, __ or insane. I didn't believe for one half a minute, that our Congress would EVER, ever, support such an idiotic idea.
Well, silly me!! __ After watching our entire Congress stand and cheer Bush last night, and then give him standing ovations and long applauses, every time he explained one of his policies or plans, I knew that our Congress for the most part, was just as crazy as he is. I honestly do believe, the large majority of them are hooked on mind altering drugs, or perhaps they have been hyptomized by aliens.
This so called tax credit plan is absolutely insanity and it is not funny at all. In addition, our media news people discuss it as if it is a swell idea and blithly advise us, we should save it, or invest it in bonds. You cannot even have a night on the town for $600 anymore. That's about a months heating bill for a hell of a lot of people. It won't purchase 20 days of groceries for a family of four who live in a large city.
MY dear God, you don't have to beam me up, I probably don't deserve it anyway, but please do beam up our leaders, __ ALL of them, and all of their major campaign contributors. Or if that isn't possible, probably isn't come to think of it, __ beam em DOWN. __ PLEH,__ PLEH!
.
.
_______Oops, sorry. When I get excited, I sometimes talk backwards. I meant Help,__ Help!
This bill shouild be called the "Incumbants' Protection Package." In other words, " Let's throw a few crubs to the little people and hope they don't vote our asses out of office. Oh nevermind, we can rig the elections anyway. But then again---maybe we have to do this so it actually seems like they want us to stay in office. " Can't have another Kenya here in Amerika.
The people running this country are shameless scum. We need to clean em all out and start again but good lucvk with that---the fix is in, I fear!
I've not had a chance to read the stimulus bill, but I suspect it'll be a one-time bribe to the middle/working-class, wrapped around permanent or longer-term supply-side breaks.
There was another massive tax overhaul bill (the name slips my mind right now) that Bush passed in the early 2000's, which raised the child deduction. Sounds good for struggling parents, eh? Except for all the corporate and upper-income loopholes it also introduced.
Bush isn't "set up" to do the right thing. He's insane.
In the 1980s, during what I call my "Accidental Yuppie" years, I worked for what was then known at (and truth-be-told for) "the world's largest bank's" corporate headquarters, and since then I have been trying to explain to people that ALL large financial institutions are criminal conspiracies who all would be perp-walked if they weren't rich enough to buy all the legislators anyone would ever need to keep the laws on their side. Computer-educated MBAs, during the eighties, created the economy we have now: so complicated only those who skim the profits can believe it can even be understood.
To try to solve a problem that derives from megabillions in debt by borrowing a bunch more and spreading it around to some of We The People, whatever the ultimate divy-up deal turns out to be, can only make things worse faster.
It's all a shuck-scam and has always been one. Anyone interested in how it works might consider watching this:
http://video.google.com/videoplay?docid=-9050474362583451279&hl=en
Or, browser permitting, see the same thing here:
http://www.paulgrignon.netfirms.com/MoonfireStudio/MoneyasDebt/Money_as_Debt.html
If more people understood this stuff (I know; dream on), it might be barely possible to work out some sort of workaround to keep those of us who have managed to wriggle out of debt from having our meager savings disappear in a puff of hope.
The stimulus package will leave out 20 million retired Americans who earn less than $3000 in income. The old and the poor. I don't want a check - I didn't want the last one. The last time a paltry check was offered, the American people gladly gave away trillions of dollars in surplus to the rich, for a few hundred dollars.
It's a scam - meant to bail out wall street and the corporations. It's also temporary, small, and meaningless.
Ramsay
Why is it such a surprise that a corrupt and dysfunctional government would propose and pass a corrupt and dysfunctional stimulus package? I expected nothing less. I have heard one theory explaining it this way; as the magnetic poles of the earth reverse it creates dissonance in human thinking. It would be tough to disprove that theory.
Tax rebate? what tax rebate I'll never see it and even if I did $1,200 dollars isn't going to take me very far. What I need is a good paying job, something I haven't had or seen much of in a long time. Most of the people I know are in the same boat I'm in, we're working and just managing to keep our heads above water. 1200 dollars, give me a break even the people who need it will only be able to breath easier for one to two months.
Last time I bought a tankless water heater, to save fossil fuels. I figured that was an anti-Bush purchase. I didn't realize at the time that it was the Democrats who insisted on the rebate to make up for Bush's tax cuts for the very rich.
Smart. That $300 bought a lot of Republican votes in 2002.
I don't know what I'll buy this time. But I know if that $150 billion was spent on opening solar panel factories, we could employ a lot of people and save a lot of coal and oil.
Nah, let's just buy some junk.
my $11.00 an hour job means i will be getting about $300. Wow. a car payment and a bag of groceries and i'm on easy street. . .for a month. i guess i don't believe hard enough in capitalism. it is a religion you know. . .and woe to him who disbelieves or spreads the heresy of a managed economy. i know. i'll go to wal-mart and pray! or is it pay?
If the minimum wage could feed and clothe a family of four, there wouldn't be a problem with consumer demand. Henry Ford understood that his workers had to be able to afford his cars or he was in trouble. American capital is finally hoist on its own petard.
The US will borrow $150 billion from China to hand out to people who will buy more stuff made in China. The next generation of US taxpayers will be paying the borrowed money back to China with interest.
Sounds like this plan will provide GREAT ECONOMIC STIMULUS ... to China.
I will do one of two things: either give the money to a need charity like the food bank or a poor family, or send the check back to the government and tell them to stick it!
dlnelson-I just read in the financial page that credit is where the "experts" think this downslide will hit next.
ncycat-Donating the rebate is an excellent idea-I volunteer at our local food bank and plan to give a chunk of it to them so they can buy goods. Most food banks get more bang for the buck than a typical consumer.
Since you feel that strongly about giving help to the poor, why not give that $1200 to a family that truly needs it? It'll be one more deduction for you instead of paying tax on the interest.
I've heard so many people "complain" that the handout should go to those who really need it, but I've not heard one say that they would give theirs to anyone but themselves.
Want to stimulate the economy? Buy yourself a new TV or something; just make sure it's made in America. That is, if you can find one.
Good point Chessgames56. It hasn't happened to all of us, but too many. It's the same kind of thing as happened in Nazi Germany. Very slowly, almost imperceptibly, spun by the propaganda machine, and repeated often enough until otherwise intelligent people begin to believe it.
I wish I knew more to do, other than to very patiently try to explain to people how this works like this. How the machine turns FDR's new deal programs into "it was the war that saved the economy" and other lies (military expenditures have the worst economic multiplier effect if I remember econ 101).
And the reason Bush can't do a public works program is it would go against the right's aim of total privatization of everything. When that happens they will completely stop enforcing anti-trust laws and we'll all be screwed even worse that we are now.
Just wait until the credit card bubble burst. Latest figures Americans owe $915 billion on their credit cards more than the national economies of the 54 poorest nations.
Give to the local Food Banks!!! Every time I go in there I see struggling families. Use some of that refund to go out, buy food, and donate it.
"Those who could use the money most in a downturn, not to spend it on consumer frivolities but to pay for basic needs, aren't getting a dime."
Ha, thats what the administration wants-for people in anticipation of this check go out and buy more "consumer frivolities", maybe even spend a few more dollars while they are in the mood.
What has happened to our hearts in America that we have chosen so many of these sub-humans to lead us? I think that is the question we should be asking. Ironically, when something 'they' don't like happens to one of 'them,' they never see themselves as part of the cause. One wonders how difficult things will need to become before the majority wake up (if they haven't already).
It's a bribe to make us feel better about the Republicans and to overlook the other crises that are facing us. The motto of this government is: "never do what is right, only what feels good".
THANK YOU for pointing out the infuriating truth. The last time my family received 'stimulation' from the government we sent the money to fcnl.org "A Quaker lobby in the public interest". We felt they could do more good with it actually working for substantive policy change that would effect the lives of those in need in our society. This time I think we will direct this money to a very, very needy family we know of who won't be receiving a nickel from the government but who desperately need relief. We believe in our obligation to the common good, continually speak out for government policies that serve that good and do what we can personally every day to act on our belief. We welcome others to consider doing the same.
PEACE-KAREN