Tuesday, September 16, 2008

Stimulating Randomness

My students know -- mostly because I freely admit -- that La Professora is a social liberal but a fiscal conservative. This makes choosing candidates during election time difficult. The choice isn't great: the social progressive who desires to end want and suffering by spreading money as quickly and widely as an STD at 60s love-in, or the financial tightwad who believes that the unwashed masses should pull themselves up by their bootstraps, disregarding the lack of boots, or shoes of any kind.

Added to this problem is the 2008 stimulus check plan and whether or not the government should do it again. The Republicans pushed hard for the first round, saying it would put a spark into the economy and save us all from recession. Now, it seems, it is the turn of the Democrats to take up the Money to the People mantra.

The national debt is nearly 10 trillion dollars. I can remember when folks complained that Reagan, the "small government" president, left the country with a $3 trillion hole. I'm not one to say that Democrats are all that good at pushing down the money we taypayers, vis-a-vis our government, owe, but the Bush administration hasn't been all that good at living up to the fiscally conservative ideal.

While a good portion of the debt comes from the political and military quagmire that is adding an estimated $7.1 billion per month to the American expenditures -- not counting the untold cost to the average American at the fuel pump due to the increase in gas costs caused by that same policy miscalculation -- a portion is due to the ill-thought out stimulus plan rolled out at the beginning of 2008. A plan that spent $41.8 million just to send out 130 million letters to let taxpayers know that, at a later date, the IRS would be sending them a check. Checks that totalled $168 billion. Keep in mind that the current budget deficit is $407 billion; the highest it has ever been.

The Democrats are so enthused by the "success" of that stimulus, they want to do it again -- before the election, but to keep it to a more modest $50 billion. To which I'd say, they must be stoned. The short-term effect of a stimulus package cannot overcome two key economic factors.

1. Unemployment is at 6.1 percent, the highest it has been since 2003 -- a $100 check isn't going to do it for those without a job.
2. The investment banking industry is on the verge of a total collapse, which will drive even the most spendthriftiest person to think twice about wantonly spending money -- even "free" money.

But, one might say, the stimulus plan worked -- people cashed their checks and bought goods, which will jump-start the economy. Not so, says a recent survey by Harris Interactive. Of those who received checks, 41% used the money to pay down household debt -- mostly credit card bills -- and 31% said that they socked the money away in a savings account or investments, that makes for a total of 72%. Only one in five (a little over 20%) Americans said that they had used the money the way the government had hoped.

This is a clear case of catering to the electorate: you're feeling the pinch, so let's spread some STD -- Stimulus, Thanks Democrats -- in your direction in hopes that this time, you'll spend it on some Chinese-made products at WalMart and feel good about the Democratic party which made it possible.

Makes one wonder if condoms come in political sizes -- what they got, I don't want to catch.


Dynamite With a Laser Beam said...

I agree, this is not really a good solution, just like the rest of the instant fix-its proposed for various issues.

On the other hand, as someone who has about $1200 in the entire world--that side of me really wants a stimulus check. I'm telling it to shush, because I am not the country, but I'd certainly be helped...

Nonny Mouse said...

A 'stimulus check' - a fancy way of saying the government generously allows you to keep a bit more of your own money, for those who have jobs paying well enough to get a rebate on their income, which BushCo then want you to spend, spend, spend. Instead of paying off credit cards... for all those things you've already spent, spent, spent money on... or putting into savings, which banks at this point in time should be desperately in need of rather than lending out any more on, well, credit cards for one. Isn't spend, spend, spend part of what got us into this mess in the first place?

Paying off debt and putting what's left into savings sounds like pretty fiscally responsible to me, y'd think conservatives would approve. But what would I know? I'm a Democrat...