A Quick Note About the Stimulus Package

Been seeing and hearing a lot of lamentations lately about the stimulus package.  A lot of them seem to be nebulous complaints not focused on the actual legislation, but more of the ideological whining that plagues our Democracy.

After actually looking at a nice, objective, analysis of what’s in the package (which you can read here) I came up with a short comment.

600,000 teachers get to keep their jobs.

If one were to “stimulate” the Green Energy industry, one would get a tax cut.

If one were to “stimulate” the auto industry, one would get a tax cut.

If one were to buy a new home, one would get a tax cut.

In one were on unemployment, this provides more money to keep the lights on and keep looking for work. And keeps health insurance for a little while longer.

If one makes less than $100G or so, one gets $400. Two as one (married couples) get $800.

If one is in environment science, there are 100,000 new jobs to be had.

If one likes cops and firefighters, they get some cash too. In order to keep hiring and keep away the growing number of theives (a “recession” creates more people who have to chose between stealing bread and watching kids go hungry).

If one is headed to college (or has kids headed there), more money.

And yes, the 14% of Americans who are poor get a bit too.  Hopefully to give their kids a chance at a better life.  Headstart has a wonderful record for doing this, and toddler care (as mentioned here) is one way to help those trying to make the transition from poverty to being able to consistently pay the bills.

In essence and in act, Obama has done the start of what he promised to do, focus on the Middle Class and the Poor.   Bush’s tax cuts for the rich are, at least IMHO, part of what led to the economic collapse of the banking sector, as a great deal of money flowed into a deregulated system which artificially inflated house prices.  A big part of the problem was that the mortgage industry was divorced from actually holding the pieces of paper they signed, and all the crap flowed from them onto the books of Fannie Mae and Freddie Mac (who, with the quasi-governmental status were assumed to be “Good for it.”)

For a while there, it was possible to not have any real income, or less than one would need, and get a $250,000 note (financed by a $25,000 loan for the downpayment) on the ASSUMPTION that house prices would continue their meteoric rises.   At the base of most crises are flawed assumptions, and this one was no different.

The point of the stimulus bill is to stimulate people to spend money in good ways that will pay more dividends down the road.  The tax cuts of investing in energy-saving technology being one of the main points in that regard, as it both stimulates that industry, increasing the potential for future advancements and cost savings, and focuses on one of the areas that America needs to address the quickest to return to a more stable economy…our general lack of energy efficiency.

As to me personally, this stimulus package does nothing directly.  While I’m in the job market looking for a job, I am not taking unemployment, so I miss that.  Without a job, I don’t get the $400 tax cut.  Without spending money I don’t have, I don’t get the other tax breaks.  I’m not a teacher or a cop or a firefighter, so those are out.  I don’t take food stamps, so no luck there.  I don’t have a toddler in day care as a single parent, so again, nothing for me.

However, given the nature of our current problems and the scope of the hole we are in (Thanks, dude) the package as a whole seems to be on the right track, getting money into the hands of people that will spend it, and encouraging people with money in their pockets to spend it.

One of the biggest problems in this kind of economic situation is those with money refuse to spend it, worried about the future.  As things get tighter, fists get tighter, and the cycle continues.   The hope is to change the attitude and reverse the spiral toward the bottom.

Yes, I used hope and change in that last sentence for a reason, because we need both to recover quickly.  And peace, we probably need that too.

Hope, peace, and change.   Those are words I most certainly believe in.

UPDATE: If anybody would like to economically stimulate me, there’s some places to do that above.   Eating is fun, but one of those big bills that get smaller when the money dries up.  Hence the nature of “belt-tightening” during a rough economy.  We all need to tighen our belts and trim our waistelines (and wastelines…cable news…I’m looking at you) a bit more during a downturn.  If every American (who needs to..at least 31% of us) lost 20 pounds, we would save billions on healthcare, look better, and get smarter (all things we need to do in order to compete better in flat world).