Stimulus Not Very Stimulating

by Doug Thompson

Congress wants to give me a tax cut in its stimulus package. If they do, the money will go straight into the college education of the daughter who’s attending the university.
It will not go into consumer spending. I have a hole in my roof after the recent ice storm. That will be paid for with insurance money. If the stimulus money wasn’t going to the university, it would go to pay down credit card debt. If I wasn’t getting the stimulus money, I’d pay the university some other way.
We’re sure not going to buy a new car or house any sooner.
I don’t think the stimulus plan is going to be very stimulating. I think we as a nation are going to increase our debt drastically and have too few new roads, bridges, school buildings and other capital improvements to show for it. I think our ability to finance new roads, bridges, school buildings and other capital improvements in the future is going to get hurt by all this new debt we’re taking on.
In a column called “Too Little Bang for the Buck,” Robert Samuelson of The Washington Post points out that a proposed $7,500 credit to anyone buying a house (not just first-time homebuyers) didn’t make it into the final bill. Neither did a temporary tax credit of $1,500 for someone buying a car or truck — so much for Democrats saving union car-making jobs.
The problem here is Congress has taken a rather warped view of the idea that you never let a good crisis go to waste. Normally that means you push for real change and reform in a crisis. This time it means passing a bunch of special-interest legislation and tax cuts to get you re-elected when the stimulus bill rolls through.
This is exactly the same sort of mistake the Republicans made when they had the majority in Congress. The temptation to satisfy their constituencies and interest groups blurred out what they needed to do for the country. They had the votes. They could do what they wanted. So they did.
Barely one out of every five stimulus dollars — 21 percent — will get into the economy by September, Samuelson writes. Less than two-thirds of it will get into the economy by September 2010.
Oh, by the way, we’re still in a war or two. Gosh, those are expensive.
Two-thirds of Americans, in a recent Gallup poll, say they want a stimulus package, but also say they don’t expect it to make much difference. “It’s sort of paradoxical: They’re both supportive and pessimistic,” Charles Franklin, a political scientist at the University of Wisconsin-Madison, told USA Today.
The thing that bothers me most about all this is the automatic assumption that a tax cut is the right response to anything. Pardon me, but wasn’t it a national epidemic — public and private — of abuse of borrowing and not paying for what you buy, at least not right away, that got us all into this mess in the first place?
“In Debt We Trust” has become the new national motto that we ought to put on our coins. There’s now nothing we can’t borrow our way out of, we seem to believe.
If we’re going to borrow almost $1 trillion, shouldn’t we get something for the money? Roads, bridges, better ports, more efficient cars — something?
You’d think the money we’ve spent trying to bail out the banks would have taught us to not spend money unless we know what we’re getting.
While I’m in a griping mood … I can’t, for the life of me, understand why our dysfunctional health care system isn’t targeted for more reform. People cite a fear of socialized medicine. Well, when everybody loses their insurance that’s what we’re going to have left anyway. One way or the other, we appeared doomed to go that way. As the stoic philosophers used to say, if you’re a dog tied to a moving wagon you might as well get up and walk rather than be dragged.