Topics: Free Games, Religion, Finance, Politics, Weekly Recap

Wednesday, March 10, 2010

The Stimulus Packages

I'll just come out and say it... I hate the stimulus program! Media and politicians like to float the number of people employed but that doesn't seem to answer the practical question. What is the net benefit we are getting from it?

There's a walkway in front of work that they've demolished and repaved a number of times. On my office board we have guesses as to how much money has been spent on this walkway. We're sure it's in the tens of thousands by now with all the equipment and workers that have been employed. The problem we have though is we didn't know the sidewalk had any problems to begin with. Sure it's nice and new and has some nice crisp curbs, but what was the overall benefit to the business? I could maybe see if this was the sidewalk in front of the main lobby for customers to see a really nice exterior, but it's not like it had any cracks in it or was discernibly uneven. The point is, you could spend a ton on making things look nice but that doesn't help you sell more product. You don't want it to be a dump, but just spending more on something doesn't mean you'll get more.

Those that are not familiar with www.recovery.gov should check it out some time. I do have to give President Obama and his administration props for creating this website. It has spending broken down by the following categories: entitlements, tax benefits, contracts, grants, and loans. It even has pretty charts and pictures for all you ADD types.

I'm going to ignore the entitlements part since that's just a way of pushing money into one of our current budget gaps and not really about stimulus or creating jobs. Also paying someone to do nothing isn't job creation. Helping someone provide for their basic necessities during a down turn is a good thing, but the bad part is how this promotes fiscal irresponsibility. We had negative savings rates for too many years when we could have been saving for the bad times and keeping our debt more in check. There are some other negatives as mentioned by the following article. I can't blame government for bailing out businesses when it's become such common practice for individuals. News flash: welfare and unemployment insurance is main street's bailout.

Tax benefits I can understand and if the government is running up our debt (thus my portion of the US debt) by giving people the money for that debt at the fed low interest rates then fine by me. I don't understand why some people get upset about the debt going up to give tax breaks. They gave us the money to pay it back should they then raise the tax rate instead cutting the budget. Where's the problem? My only issue is when you are targeting certain groups of people to get the tax break and not all people who pay taxes...robbing Peter to pay Paul.

That being said I am not a big fan of the tax credit for new home buyers. It does help the economy, but we are encouraging further creation of debt while at the same time giving large sums to a select number of people that very well would've bought a house anyway. Pretty close to cash for clunkers but at least the additional home buyers means new sources of income for schools and local government.

So that brings me to the next 3 for which you can see the breakdown of awards by state and look at the state maps to see exactly who was awarded what. Wonderful! Looking out there for my area I pretty much just see universities and schools being awarded the money. In the case of schools I'd have to assume they are classifying it as saving a job (what govt refers to as job creation... must be from a special course like Govt Econ 101). With all the money we are paying in school taxes, why is it never enough? Schools will have to make cuts eventually... we are just holding off the inevitable which is the exact opposite any normal business would do things.

In the case of universities I can only guess what academia would be doing with it. Are we funding all the pet research projects going on there or is this some big experiment academia is doing to see if they can figure out how to create jobs? Basically I am left having no idea what this money is trying to accomplish because it doesn't seem to be about creating new permanent jobs.

So instead of this government talking about "creating" jobs. I want to hear leadership. I want to know what we as a country should be focused on creating here that will provide value. Maybe it's high speed rail. Maybe it's rare minerals. Maybe it's alternative energy. Maybe it's education reform. If they want to talk stimulus, that's what they should be selling us.

2 comments:

  1. who are the ADD types you are referring to?

    ReplyDelete
  2. Is that question rhetorical?

    ReplyDelete