Tuesday, April 17, 2012
What are we Really Stimulating with the Economic Stimulus Package?
On January 28 2009, the House of Representatives passed an $819 billion economic stimulus package. The bill is titled “The American Recovery and Reinvestment Act of 2009.” It passed straight down party lines with a vote of 244-188 and is now headed to the Senate. Nancy Pelosi and Barack Obama have pledged to jump start this shaken economy with a stimulus package. Naturally, this is a package that had to be passed immediately, or America would face grave dangers. Failure to act now will lead to unprecedented dangers.
President Obama said after the House vote, “This recovery plan will save or create more than three million new jobs over the next few years.” He also said “We don’t have a moment to spare.” (1) Of course we don’t have a moment to spare. Who would want to waste a few minutes to take a look at this bill to see what it is really in it? Every minute we wait, someone could lose their job. If we take too long, someone else might come up with a better idea, or things may turn around on their own. If that is the case, then this ridiculous spending bill would never get passed unless the public is scared or desperate. If we examine this bill, then we may find out what it really stimulates, or what it doesn’t stimulate. According to the Congressional Budget Office (CBO) the following is included in the bill: (2)
• $20 billion to the food stamp program
• $2.8 billion to expand broadband internet service in rural areas
• $8.7 billion to promote energy efficiency and conservation at federal facilities
• $8.4 billion to the Clean Water and Drinking Water State Revolving Funds
• $20.4 billion to the Department of Health and Human Services
• $4.6 billion to employment and training programs by the Department of Labor
• $30 billion to highway construction
• $5.2 billion in grants to states and cities for community development
• $11.1 billion to the Department of Housing and Urban Development (HUD)
• $46 billion to unemployment insurance and other provisions
• Refundable tax credits up to $500 for single and $1,000 for joint filers
One is left to wonder exactly how the provisions in this bill will invoke job creation in the private sector where most jobs are created. What incentive is there to invest in America and start up a new business? Not once will you hear Obama or Pelosi stress how the free market can assist with recovery. Credit should be given to President Obama for at least asking Pelosi to remove the hundreds of millions of dollars that would have gone to contraceptives for low income people. I do not understand how contraceptives can be bundled with an economics stimulus bill (no pun intended). The truth is this bill is not about stimulating the economy; it is about expanding the federal government and increasing those who depend on their programs at the taxpayers’ expense.
The House Republicans stood against this bill and offered an alternative bill called “The Economic Recovery and Middle-Class Tax Relief Act of 2009.” The Republican version of the bill called for a 5 percent income tax cut across the board, increasing the child tax credit to $5,000, freezing the capital gains and dividends tax rates at 15 percent, and relief for businesses. (3) In my humble opinion, the alternative bill is missing an overdue reduction in the corporate tax rate and much needed spending cuts. Taxing corporations only leads to higher prices for consumers since those costs are added to the price of the products they sell. How about giving the consumers a break by cutting the costs of goods sold for our corporations? I am not so sure we can afford to expand the child tax credit by 500 percent either.
The best news for conservatives is the fact that EVERY Republican opposed this bill along with eleven Democrats. This is a very good sign that conservatives appear to have some say in their government. Is it possible that the Republicans have learned from their mistakes of the past? These mistakes have cost them majorities in the House, Senate as well as the White House. I would have loved to have seen this opposition to spending back when the Republicans had the majority in Congress. Unfortunately, the Republicans ran out of man power to block this legislation due to the seats they lost in the previous election. Perhaps if they didn’t abandon their principles, we could be fine tuning their version of the bill instead. Sometimes the best lessons in life are the hardest lessons we learn. The Republican Party has just been taken to school by the party who really knows how to spend money. Welcome to the school of Pelosi, Reid, and Obama.