Today we have a new economic stimulus plan revealed.
The $150 Billion dollar package consists of:
- $300 to $1200 dollar one time June tax rebate - for anyone who earned at least $3000.00 in W2 type wages. Nothing mentioned about temporary 1099-misc. workers or small business owners who are hit the hardest often in a recession and cannot collect unemployment insurance
- Allows Fannie Mae/Fannie Mac to buy out up to $626,000 dollar mortgages temporarily up for $416,000
- Large businesses can take a 50% additional tax exemption on new capital expenditures
- Small businesses can write off $250,00 in new capital expenditures, versus $112,000 currently
- There is also mention of extending business operating losses previous tax years as a write-off
This is a drop in the bucket.
What about generating jobs? You can't (try as they might) buy someone off with $300 bucks all the while promoting policy that wage represses the middle class and expect any change beyond increases in the federal debt.
That's what is needed, heavy investment in areas that generate production, jobs, economic growth. We have twin deficits and plain too much debt yet instead of looking to generate new industries, jobs to reduce those deficits, we get hand outs to the middle class so they can go shop.
Indeed, criticism is now pouring in about little real effect this will have and at the Davos World Economic Forum, we have scorn for US economic policy.
According to this CBO chart on stimulus effectivenesss, Food stamps, extending unemployment benefits are truly needed to improve our social safety net.
For myself, the real issue here is the twin trade and budget deficits, the realignment of the US economy due to our absurd trade policy, unregulated financial markets, private equity, hedge funds and global labor arbitrage agenda simply is not being addressed.
Comments
Thank your kids too.
After all they are "lending " you another $300. Do we think the generations to follow are not going to be bitter. Our children and our childrens children that will stagger under the weight of an $10,500,000,000,000 thats 10.5 trillion dollars like the blog says. Bush alone has stolen 6 trillion dollars from your kids and slid it to his rich friends. I don't know about you but that enrages me.
past rage
They also claim we cannot have social security or health care on top of it. Not one mention of the DoD, this massive military budget.
We need enough Americans to start demanding policy that is in our best and long terms interests.
I don't buy the CBO putting "unknown" of the benefits of investing in public works, US infrastructure on their stimulus analysis spreadsheet.
Infrastructure
I would have to guess improving the nations infrastructure is the most beneficial way that money could be spent. The money would stay here and help employ people in the construction trade who have taken the brunt (so far) of the slowdown. At least our children will be able to use the roads and bridges of which they are footing the bill. Its only fair and thats why this administration does is against the idea.
Social security is solvent to 2040 they have stolen the money for themselves and their buddies like Blackwater. Its criminal.
infrastructure
I link to the CBO's quick spreadsheet where they claim investing in public works will have a small effect. I don't know how they get that for intuitively it would improve much neglected public infrastructure which generates business, jobs for Americans, buying of US raw materials and should keep any deficit spending at least within the United States.