Obama Stimulus Package: an urgent need to do nothing

Wednesday, January 28, 2009

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.

Labels: Democratic Congress, President Barack Obama, stimulus package

2 Comments:

At 5:03 PM, January 29, 2009 , M. Vass said...: Comment as found at worthblog.com, where I am a contributing author.

Norris Hall Says:
January 29th, 2009 at 5:38 am e
Where was conservative outrage when President Bush was pushing 600 billion dollars of spending on the Iraq war.
All of that money was borrowed.

Why are Conservatives all for borrowing money to spend on training Iraq’s police and army, rebuilding bombed out schools, restoring power and drinking water , prop up Iraqs governments and paying insurgents not to fire on US troops.

But when it comes to spending money here in America they call it wasteful.

I think we should ship the Republicans in congress to Iraq.

They seem to have far more sympathy and support for oil rich Iraqi’s than for unemployed Americans
At 5:33 PM, January 29, 2009 , M. Vass said...: Norris,

Thank you for your response.

Now I want to mention something immediately obvious. You never commented on what I spoke about. Is that because you cannot defend what is happening.

I notice that Democratic politicians love the act of looking backwards and pointing to things in the past they do not like, rather than addressing the issue in front of them. It’s a distraction often used in polispeak, and is an effective way to beguile the public into thinking they are doing something or helping when in fact they are doing nothing and don’t want to be blamed for it.

But that aside.

I was among many that disputed the need to go to war in Iraq. That debate ended the second the first soldier set foot in Iraq. An action that was advocated for by Secretary of State (and then Senator) Clinton and many Democrats with full access to non-public information.

Once troops set foot in Iraq, funding was not a question. It was in part the desire of Democrats, after the fact, to not fund troops that helped lead to deaths because of poor equipment and other resource failures.

The fact is that wars have unknown lengths, and only a fool assigns a timetable to such an act. Another fact is that wars are expensive. They boost economies to a degree, but ultimately they cost a lot. Complaining about that cost benefits no one.

Since America cannot colonize Iraq, which would have allowed us to recoup our cost, the only other choice is to have a new Government that is friendly towards America – thus stimulating trade with us in a beneficial manner. To gain that requires more than just propping someone in a position of power. The people of that nation need tangible assets that they did not have prior to allow us to gain a favorable trading arrangement. That means power, food, schools, clean water and so on.

And as for “But when it comes to spending money here in America they call it wasteful.”

Let’s get the facts straight. Republicans are not against a stimulus package. But having learned from the Bush Administration that just throwing money at the public will not work, effectively using money is the goal.

But prove me wrong. Please do explain how $500 million dollars to be spent on studying ‘climate change’ will help any American keep their job next week. Please do explain to me how spending $150 million on honey bees will create a job to replace one lost this week. Please explain to me how billions for research of alternative energy sources (that don’t exist today) will put food on a table, or a roof over the head of a single family during the next 2 years, or even 5.

Explain to me how the Democratic stimulus package spending 25% of the $819 billion proposed after 2 years pass is immediate and job creation that cannot be delayed.

I call all of that wasteful, and conter-productive. So before you ship out all the Republicans that are asking for the money Congress is borrowing to be used to create jobs, and help families now (not in a couple of years), please explain how Democrats are not just looking politically good while advancing pet projects and social agendas on our collective dime.