Obama Stimulus Package: an urgent need to do nothing
The more I hear about the Obama stimulus package, the less I like it. Yet it is the most “urgent” piece of legislation that his Administration is working on passing, immediately. Just as the $800 billion for the credit crisis had to be immediate.
And just as with the mortgage/credit bailout quick action without forethought provides for mistakes, waste and a few political amendments that no one will notice until after the fact.
As of right now, the Obama stimulus package is being referred to by President Obama as
“All we can do, those of us in Washington, is help create a favorable climate in which workers can prosper, businesses can thrive, and our economy can grow," Obama said. "And that's exactly what I intend to achieve - soon.”
Now think about this for a moment. The stimulus package is intended to avert a depression and reverse the recessionary trend currently happening. This is important to remember as I continue.
25% of the Obama stimulus package will not take effect until after 2 years have passed. That’s not my opinion, that’s from the White House itself. Thus the package is not immediate.
The package includes several hundred billion dollars for environmental studies. That also takes an extended amount of time, and provides nothing to the economy. But it does make the global warming crowd feel all warm and fuzzy.
The package requires that:
“Much of the spending would be for items such as health care, jobless benefits, food stamps and other such programs.”
Jobless benefits do not create jobs, and therefore does not help the economy. Food stamps do not create jobs and therefore does not help the economy. Healthcare could create jobs, except that the money allocated for that is to supplement the coverage and cost for those that have lost a job. Again it does not create anything.
And a huge portion of the stimulus package is targeted to give the public money. But that’s not exactly true. First you have to make less than $75,000 (or $150,000 for those filing joint). Second you must receive a paycheck. Third you will receive a discount on the federal taxes you pay – up to the first $8150 of your annual salary.
That last one is important. It means that if you get paid once a month (as an example), and in month 2 or 3 your income exceeds $8150 you will no longer get the benefit. Of course the entire benefit only amounts to about $120 a month anyway. Which should be plenty of money to go out and buy hoards of new items. Which would create new jobs.
Except that $120 a month isn’t much at all. For most major purchases, like a new TV that will work with the HD changeover, cost far more than a mere $500 (which would take 4 months to save up to and is not immediate). Add to that equation the fact that the average American has $6000 in debt, and with tens of thousands of jobs being lost so far in this month alone most are more concerned with lowering debt as opposed to buying a new shiny something to compete with the Jones’ next door.
So again this is not creating jobs.
But there is some portion of the funds that will go to small businesses. Roughly $2.7 billion dollars. Or in other words, next to nothing. And larger businesses will get money as well, if they can prove they can create jobs through Government approved calculations that have been proven to be next to impossible to qualify for.
But do not fear. The Government will be funding jobs via public works. Like in the time of FDR. Except that just like then, if nothing is being done to create private sector jobs, which the above proves it is not, when the Government stops the funding there are no jobs for people to apply for.
In essence, this is a political polispeak attempt to look good. The long term effects are negligible at best. The quiet side provisions are definitely not popular. In virtually every aspect it fails to create jobs, or spur consumer confidence. It fails at its immediate and definitive purpose, stimulus.
If this passes, Democrats in Congress and President Obama will look good. For a while. And Republicans will have yet another thing that will be blamed on them. And when the built in failure of the plan becomes apparent, Republicans will be the first people selected to blame for their disagreement.
What is needed is a stimulus plan. Not the word stimulus, not the projection of sending the public checks that will need to be paid back at some point in the future. Least of all is the need for the Government to take care of everyone as if they were children, which this package does in abundance.
I don’t want the Government to give me what it thinks I need. I want the ability to earn enough to make my own choice about what I actually need, and if I do well what I want.
All politicians should reject the Obama stimulus package. Democrats won’t. Most Republicans will. And it will get passed because there are more than enough Democrats who seek political gain over their constituents well being.
Not the definition of change most voters expected, but it is change indeed.