$825 Billion Economic Rescue Package

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Debate on the House floor regarding the proposed 825 billion dollar economic stimulus and investment package demonstrated that most Congress persons haven't read it, even fewer understand it, and none can provide any rational assurance it will have the intended effect. Yet, they debated with misinformation, deceptions, and prophecies as to the outcome of such spending. It is necessary to lay down some facts, even if our representatives are bereft of them.

First fact, the package is not intended nor designed to be an immediate economic stimulus package. That is obvious by the sorts of spending included, specifically, infrastructure investment spending, some of which won't get underway until well into or even after 2010. It is a combination package. One part is designed for immediate economic stimulus, as in the extension of unemployment benefits, allocations for state Medicare payments, and tax cuts to the poor and middle class, including some for small business. This stimulus portion represents about 1/3 of the total. The balance is allocated to jobs creation and infrastructure projects.

There is no holistic coherent plan or rationale to the spending package. Many of its parts make sense on their own, such as the extension of unemployment benefits, but, as a whole, it creates no synergy, no extra bang for the buck, that is likely to create more economic activity and government revenues than increased debt. In fact, the opposite appears to be the case. There will be portions of this package that end up wasted dollars, in terms of stimulus, job creation, and infrastructure investment. The reason is simple. The legislation is not going through the normal budgetary process, is not to be paid for by current government revenues or compensatory spending cuts in other areas, and truly is a compilation of wish lists of various representatives, states, cities, lobbyists, and other vested interests in getting their hands on tax payer dollars without ever having to pay it back.

Some Republicans say there isn't enough tax cuts for small business. Despite the fact that small business owners cannot create more business nor hire more employees with additional tax cuts because their business is shrinking as a result of reducing demand and customer orders.

Some Democrats tout the package as an emergency economic stimulus package which of course, in its entirety, it is not. Some Republicans in opposition say this package will create no jobs. Obvious lies from both camps. But, there are other lies in the House debate.

Some Democrats offer the assurance that this package will shorten and lessen the recession. Very unlikely as this recession is being carried forward by a lack of consumption by Americans hoarding their money out of fear of being laid off or losing their jobs during this ongoing recession. This package will do very little in the short term to lessen that consumer anxiety over their jobs and income.

One piece of potentially positive news is that the Senate's version of the bill may introduce billions more spending to prevent the Alternative Minimum Tax from hitting the middle class income groups for awhile longer. But, this constitutes just more spending for purposes not intended, like so many other of this package's spending provisions.

If this were done right, and it won't be, some of the following would have taken place.

1) The bill would have been stripped to an emergency economic activity stimulus purpose including only items with that potential to be realized over the course of 9 to 12 months. Everything else would have to fall under the regular budget appropriations process and subjected to Pay as You Go rules instituted by Democrats.

2) Infrastructure spending would have been planned, phased by short term, medium term, and long term investment returns, and by priority of need, immediate due to safety concerns, needed soon as regular maintenance, and needed as investment in new industries and technologies to facilitate economic activity in the longer term. And of course, the monies should have been allocated accordingly, with an eye to synergy and convergence of jobs creation and industry/economic innovation and growth.

3) The name(s) of every person associated with conceiving and, or, promoting any part of the spending in this package should have been listed with every item of spending for public viewing.

The current version of the package may receive a few nips and tucks in the Senate version, making it more or less palatable to objective viewers of the potential of this package having intended results. But, overall, it appears to be on course for passing as another example of wasteful government spending put together in haste and without appropriate tax payer/debtor safeguards to insure the biggest bang for their future tax debt.

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This page contains a single entry by David R. Remer published on January 28, 2009 7:36 PM.

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