Thursday, February 05, 2009
The Economic Stimulus Package
The enrolled Senate version of the Economic Stimulus Plan is 731 pages long. This writer has seen it, but he has not read it. While the expression may be an oxymoron, it would be good to read an authenticated summary version of the details.
Mostly what the public sees and hears of the details comes from its critics. Yet reliable news sources, visual and paper, tell us that the plan is supported by nearly all economists of repute, including Nobel laureates. Of course, most critics are republicans who have become united to obstruct most initiatives of the new president regardless of the consequences.
As more information has come out regarding the economic stimulus package going through the House, it has become apparent that a portion of it has become ideological as well as economic in nature. That is, some portion of the expenditures proposed may relate to the political agenda or goals of the democrats. Not that these expenditures are not stimulating to the economy, but they give republicans an opening to criticize.
There is a big ideological difference over tax cuts. Republicans want nothing else but tax cuts for individuals and businesses. They want the Bush tax cuts for the wealthy preserved. Yet credible authorities, including Nobel laureate Paul Krugman, insist that tax cuts are the least effective method of pumping money into the economy. Nevertheless, tax cuts are a part of the republican ideology and politics.
This observer would reduce the amount of money in tax cuts to a bare minimum. These are known not to be as effective as other initiatives, and they really constitute giveaways just like the rebates. There are entirely too many costly tax breaks in our system now favoring business, and too few restraints against greed, exploitation, and international piracy.
Proposed tax credits and early write-offs and depreciation schedules for businesses should be carefully examined for signs of corporate welfare. Infra-structure improvements must be culled, and any plain pork projects should indeed be eliminated. Purely social welfare items probably don’t belong in this bill, unless their purpose is strictly stimulating and perhaps time-limited.
Cities and states should not have projects assumed by the federal taxpayers just because they are “shovel-ready.” This makes passing the burden too easy.
State and local governments participating in a federal dole should have “maintenance of effort” requirements, meaning they cannot reduce their own expenditures in similar projects. Federal taxpayers should not be “bailing out” local taxpayers who are not really trying. Frugal state and local governments will pass the burden to the feds at every opportunity, if so allowed, and let local taxpayers escape responsibility.
Some parts of the economic stimulus package do appear more directly useful and effective than others.
That which has to do with the electric grid, wind power, auto limitations, and “green” projects appears good. While incorporating some aspects of the “Pickens Plan,” more stress should be on projects of that nature. Few should argue over streamlining health records, preventive medicine, extension of unemployment insurance, keeping health insurance for those losing jobs, or for assisting common and higher education and student aid.
Perhaps appropriately, the economic stimulus plan fails to address directly the exporting of American jobs, and it does not impose tariffs to protect American labor from cheap foreign competition. As it is now practiced, trade is draining capital away from this nation at an alarming rate, and our job market is being reduced to servicing one another rather than producing tangible products.
We are seeing already threats being made by foreign interests if the stimulus plan’s “buy American” provision stays. But how foolish would it be for our taxpayers to burden themselves with a measure that does not restrict its stimulus to our own industries.
Of course, the trade deficit is a long-term problem rather than a short-term stimulus-type undertaking. But it is directly related to the nation’s present problems, and it must be considered in the solutions. Cheap labor abroad is lowering American wage standards.
Unless trade problems and job exportation are addressed, and unless we regulate our trade to include more “buy American” requirements and stimulate our own manufacturing sector, we are not likely to see again the kind of middle class prosperity that has been traditional in this country. Our power abroad will then follow the path of weakness at home.
Dr. Edwin E. Vineyard, AKA The Militant Moderate
Mostly what the public sees and hears of the details comes from its critics. Yet reliable news sources, visual and paper, tell us that the plan is supported by nearly all economists of repute, including Nobel laureates. Of course, most critics are republicans who have become united to obstruct most initiatives of the new president regardless of the consequences.
As more information has come out regarding the economic stimulus package going through the House, it has become apparent that a portion of it has become ideological as well as economic in nature. That is, some portion of the expenditures proposed may relate to the political agenda or goals of the democrats. Not that these expenditures are not stimulating to the economy, but they give republicans an opening to criticize.
There is a big ideological difference over tax cuts. Republicans want nothing else but tax cuts for individuals and businesses. They want the Bush tax cuts for the wealthy preserved. Yet credible authorities, including Nobel laureate Paul Krugman, insist that tax cuts are the least effective method of pumping money into the economy. Nevertheless, tax cuts are a part of the republican ideology and politics.
This observer would reduce the amount of money in tax cuts to a bare minimum. These are known not to be as effective as other initiatives, and they really constitute giveaways just like the rebates. There are entirely too many costly tax breaks in our system now favoring business, and too few restraints against greed, exploitation, and international piracy.
Proposed tax credits and early write-offs and depreciation schedules for businesses should be carefully examined for signs of corporate welfare. Infra-structure improvements must be culled, and any plain pork projects should indeed be eliminated. Purely social welfare items probably don’t belong in this bill, unless their purpose is strictly stimulating and perhaps time-limited.
Cities and states should not have projects assumed by the federal taxpayers just because they are “shovel-ready.” This makes passing the burden too easy.
State and local governments participating in a federal dole should have “maintenance of effort” requirements, meaning they cannot reduce their own expenditures in similar projects. Federal taxpayers should not be “bailing out” local taxpayers who are not really trying. Frugal state and local governments will pass the burden to the feds at every opportunity, if so allowed, and let local taxpayers escape responsibility.
Some parts of the economic stimulus package do appear more directly useful and effective than others.
That which has to do with the electric grid, wind power, auto limitations, and “green” projects appears good. While incorporating some aspects of the “Pickens Plan,” more stress should be on projects of that nature. Few should argue over streamlining health records, preventive medicine, extension of unemployment insurance, keeping health insurance for those losing jobs, or for assisting common and higher education and student aid.
Perhaps appropriately, the economic stimulus plan fails to address directly the exporting of American jobs, and it does not impose tariffs to protect American labor from cheap foreign competition. As it is now practiced, trade is draining capital away from this nation at an alarming rate, and our job market is being reduced to servicing one another rather than producing tangible products.
We are seeing already threats being made by foreign interests if the stimulus plan’s “buy American” provision stays. But how foolish would it be for our taxpayers to burden themselves with a measure that does not restrict its stimulus to our own industries.
Of course, the trade deficit is a long-term problem rather than a short-term stimulus-type undertaking. But it is directly related to the nation’s present problems, and it must be considered in the solutions. Cheap labor abroad is lowering American wage standards.
Unless trade problems and job exportation are addressed, and unless we regulate our trade to include more “buy American” requirements and stimulate our own manufacturing sector, we are not likely to see again the kind of middle class prosperity that has been traditional in this country. Our power abroad will then follow the path of weakness at home.
Dr. Edwin E. Vineyard, AKA The Militant Moderate
