The Stimulus that Won't Stimulate - by Irwin Nesoff

We’re all too familiar with that old adage “when life gives you lemons…” Well, for the last seven years the Bush administration’s economic policies have been turning our economy from lemonade to lemons. After two terms of failed economic policies, President Bush, joined by the Democratic controlled Congress, is offering us a stimulus package that is nothing more than an ill-conceived giveaway. Do we still remember how Mr. Bush inherited a record budget surplus and turned it into a record budget deficit in just two short years? His response to the surplus was to give out huge tax cuts to the wealthiest Americans while buying off the middle class with a several hundred dollar tax rebate. Now his response to a wrecked economy is tax cuts for the wealthy and tax rebates. How does the same failed policy address two different economic conditions?
Well, now that the US economy has been turned into a lemon that nobody wants to invest in, the administration along with its lap dogs on both sides of the Congressional aisle offer us peels and seeds while holding the lemonade for their few, favored supporters and contributors. This bi-partisan stimulus package puts the tax rebate in the hands of those who are already doing okay financially and would most likely get along without the additional few hundred dollars, thereby not adding a stimulus as much of this extra money is apt to find its way into savings accounts. The Democrats gave into the Bush ideology of no more money for low income and poor people, when they agreed to drop an extension of unemployment benefits and additional food stamp aid. Both of these would have gone to people most likely to spend the money immediately.
Tax breaks for business to increase investment is an unproven response as it may take months for businesses to make investment decisions, and interest rates are currently quite low, so businesses that are prepared to make capital investments already have access to low interest loans.
According to the Economic Policy Institute, an effective stimulus package should include four components: infrastructure investments, relief to states, extending unemployment and tax rebates. Funding improvements to America’s aging and failing infrastructure will provide jobs while making much needed improvements. Federal fiscal relief to states would help to avoid cutbacks in essential services and reduce layoffs. Such a stimulus package would create jobs and growth and help jumpstart the economy by having a faster impact, it would not increase long-term budget deficits nor would it increase the level of income inequality that exists in America today.
So why then do we have a bipartisan stimulus package that will only serve to increase the budget deficit and have minimal impact on the economy? One thought; presidential and congressional election year. What better way to buy votes than to return to voters “their” money?”
But perhaps we Americans are smarter than our elected representatives believe. Perhaps we can’t be bought off so easily. One way that we can show our concern for the failing economy and those that are hurt worst by it is to donate half of the tax rebate to a food pantry. In the seven years of the Bush administration federal support for food and nutrition programs have been reduced greatly while the demand has increased. Food banks across the country are reporting record demand and decreasing support.
So I am gong to send half my rebate to a local food bank, because nobody should go hungry in the wealthiest country on the planet, and because my tax dollars would be better utilized helping those most hurt by the Bush economic policies, rather than buying consumer goods or clothing that are manufactured in China and will not create one US job. As one economist put it, and I quote with some license, “The rebate will be spent on consumer goods from China and the US will have to borrow from China to fund the $150 billion stimulus package, making the Chinese the only ones who will benefit from this plan.”
We will all feel better knowing that our tax dollars prevented some child from going to bed hungry. I hope you will join me and contribute half your rebate to a local food bank or food pantry. Together we can make a difference.