Blogs » Politcs Plus » Stimulus package fatigue?


I just read a Gallup poll that showed 67% of Americans  backing the Obama Administration stimulus package and only 31% approved of the GOP plan.  I seriously doubt the 67% read the 778 pages and 148,000 words of this $827 billion package.  I do think the 67% have a lot of hope.

Senators Susan Collins, Olympia Snowe, and Arlen Specter will join the democrats tomorrow in voting in favor of their version of the stimulus package; this will send it over to the conference committee for final passage.  The president will have a news conference tonight in Elkhart, Indiana trying to sway the skeptic but hopeful nation.  That part of the country is suffering with a 15% unemployment rate. Think that had anything to do with choosing that city?

Is the stimulus package too much or too little?  According to Dean Baker of the Center for Economic Policy and Research we are losing annually; $450 billion housing wealth (our mortgages), $150 billion in commercial real estate (empty buildings) and $650 billion in consumer spending.  That comes up to$ 1.25 trillion making this package too small.  Even republicans think we should do something because they don’t want that Herbert Hoover tag but tax cuts are all they are offering.

We need to get back to basics.

(1)A stimulus plan involves spending and the government is the only one with that much liquidly.  Offer food stamps and they will be spent and it creates $1.73 in stimulus, infrastructure jobs $1.59 in stimulus, and tax cuts only $1.02 in stimulus.

(2)A stimulus is short term and not meant for long-term goals or a sure fix.

(3)The fed does not have any more options because interest rates are already at zero.

The stimulus will probably pass but then it’s on to the banking bill(TARP bailout money) because the banks need the rest of the $750 billion and some more.  This time the free market will play a role by offering to buy some questionable notes at 15 to 20¢ on a dollar.  Patriotic bunches aren’t they?  Rumor also has it that this time some banks will be allowed to fail.