Economic Stimulus, my Arse!
At work about a week ago a friend told me that Congress (specifically the House of Representatives) passed the economic stimulus package President Bush so desperately wants to keep our faltering economy from circling the proverbial water closet. This bothers me. It bothered me the last time Bush decided that our economy needed stimulating in the summer of 2001.
Since it's common practice for people to analyze overly complicated subjects with simple platitudes, who am I to walk away from such an opportunity? My friend asked me when I reacted angrily to the news that this "stimulus" package passed the House to explain why I feel that a several hundred dollar check from the government is a bad idea.
In 2001 when the Bush Administration gave individual taxpayers anywhere from $300 to $600 (depending how you file your taxes), he and the lawmakers who agreed with this plan argued that the budget surplus amassed during the Clinton Administration actually belonged to us because it was "our money". This is a reasonably sound argument. However most administrations don't know how to operate a balanced budget, let alone one that creates a workable surplus. The monies that supplied the "refunds" in 2001 came from the budget surplus amassed during the six previous budget years under Bill Clinton.
Seven years later, there is no budget surplus. The amount of spending this country has done during the Bush years has plunged this country so far into debt that Congress (before it changed into Democratic control in 2007) raised the debt ceiling six times in five years. If the Senate passes this "stimulus" bill (already passed by the House) and we all get checks ranging from $400 to $800, where will that money come from?
I remember getting that $300 check in July 2001 and thinking, "Cool, I can do a little shopping and pay a couple of bills." In retrospect that refund was horribly misguided. Given there is so much in the news about the state of our economy: foreclosures spreading across the country like influenza, the dollar losing value like a depreciating automobile, and people spending years either unemployed or underemployed, extra money in the government's coffers would have helped a great deal. For example, if the Bush administration followed Clinton's lead and kept up the budget surpluses, that money could be reinvested into the country in the form of infrastructure projects for example. Also, that extra money could have paid for the two wars that we are presently fighting in Iraq and Afghanistan (something that is currently paid for in "emergency" supplementals every few months as if the five and six year long wars are surprises: "Whoa! we need extra money to pay for this war we're engaged in but couldn't work into the regular budget!").
If the government had that extra money in it's proverbial bank account, it would not have to borrow heavily in order to meet its many demands. Unfortunately, since the Bush administration does not like taking tax monies to pay for government services, it has to get the monies from somewhere, so we borrow it from countries like Saudi Arabia and China. Interest rates, the price for borrowing money, like all things that have a price tag attached to it, goes up when demand for it goes up. The government, when it needs to borrow, drastically increases the demand, making it more expensive for people like us to borrow money to buy houses, cars, and use other lines of credit. But I digress, if this "stimulus" package passes and gets signed into law, where will the money come from?
To put things simply, the government, much like a household, has to bring in money and at least break even in order to survive. If you can save whatever extra you pull in, you can use that to take care of extra projects your household needs in order to maintain or improve things. If you spend more that you bring in, you will go to your credit cards, borrowing money that will take an exceedingly long time to pay back (if ever). If you continue to spend more than you take in, you will end up going to those usury scoundrels, payday loan stores. People should not have to borrow money to pay for things like plasma TVs, iPods, or other disposable high priced goods. But the government wants you to do just that. I think they will go to the Beijing, Dubai, or Riyadh branch of the [payday loan store name here] in order to make that happen.
Since it's common practice for people to analyze overly complicated subjects with simple platitudes, who am I to walk away from such an opportunity? My friend asked me when I reacted angrily to the news that this "stimulus" package passed the House to explain why I feel that a several hundred dollar check from the government is a bad idea.
In 2001 when the Bush Administration gave individual taxpayers anywhere from $300 to $600 (depending how you file your taxes), he and the lawmakers who agreed with this plan argued that the budget surplus amassed during the Clinton Administration actually belonged to us because it was "our money". This is a reasonably sound argument. However most administrations don't know how to operate a balanced budget, let alone one that creates a workable surplus. The monies that supplied the "refunds" in 2001 came from the budget surplus amassed during the six previous budget years under Bill Clinton.
Seven years later, there is no budget surplus. The amount of spending this country has done during the Bush years has plunged this country so far into debt that Congress (before it changed into Democratic control in 2007) raised the debt ceiling six times in five years. If the Senate passes this "stimulus" bill (already passed by the House) and we all get checks ranging from $400 to $800, where will that money come from?
I remember getting that $300 check in July 2001 and thinking, "Cool, I can do a little shopping and pay a couple of bills." In retrospect that refund was horribly misguided. Given there is so much in the news about the state of our economy: foreclosures spreading across the country like influenza, the dollar losing value like a depreciating automobile, and people spending years either unemployed or underemployed, extra money in the government's coffers would have helped a great deal. For example, if the Bush administration followed Clinton's lead and kept up the budget surpluses, that money could be reinvested into the country in the form of infrastructure projects for example. Also, that extra money could have paid for the two wars that we are presently fighting in Iraq and Afghanistan (something that is currently paid for in "emergency" supplementals every few months as if the five and six year long wars are surprises: "Whoa! we need extra money to pay for this war we're engaged in but couldn't work into the regular budget!").
If the government had that extra money in it's proverbial bank account, it would not have to borrow heavily in order to meet its many demands. Unfortunately, since the Bush administration does not like taking tax monies to pay for government services, it has to get the monies from somewhere, so we borrow it from countries like Saudi Arabia and China. Interest rates, the price for borrowing money, like all things that have a price tag attached to it, goes up when demand for it goes up. The government, when it needs to borrow, drastically increases the demand, making it more expensive for people like us to borrow money to buy houses, cars, and use other lines of credit. But I digress, if this "stimulus" package passes and gets signed into law, where will the money come from?
To put things simply, the government, much like a household, has to bring in money and at least break even in order to survive. If you can save whatever extra you pull in, you can use that to take care of extra projects your household needs in order to maintain or improve things. If you spend more that you bring in, you will go to your credit cards, borrowing money that will take an exceedingly long time to pay back (if ever). If you continue to spend more than you take in, you will end up going to those usury scoundrels, payday loan stores. People should not have to borrow money to pay for things like plasma TVs, iPods, or other disposable high priced goods. But the government wants you to do just that. I think they will go to the Beijing, Dubai, or Riyadh branch of the [payday loan store name here] in order to make that happen.
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