Well, anyone who reads my posts knows I am against, really any government stimulus package, but this one in particular. So, will it create jobs and help businesses? Let's see what's in it? So, according to the Wall Street Journal on January 16, using the Associated Press as their source, the highlights of what's in the bill are as follows:
Energy
$32 billion Funding for "smart electricity grid" to reduce waste
I've felt for a long time that we needed to get the federal government and the state governments together to work on redoing our electrical grid, nationwide, but it won't provide a significant number of jobs, if any nor does it help anyone except perhaps a few energy companies
$20 billion + Renewable energy tax cuts and a tax credit for research and development on energy-related work, and a multiyear extension of renewable energy production tax credit
Again, this sounds like a great idea, but it doesn't create any jobs and it doesn't help any businesses, at least not this year, and it doesn't do anything for you and me.
$6 billion Funding to weatherize modest-income homes
Okay, our economy is driven by the middle class and small businesses. This idea might actually get money to the middle class to give out to small business owners in order to actually save themselves some money on energy costs. Bravo on this one. Assuming of course that Congress actually defines "modest-income homes" as people who can actually get and spend this money. I doubt they have, but who knows, perhaps we should hope it. Nonetheless, I'll give this 6 billion a thumbs up, at least as ideas go.
Science and Technology
$10 billion Science facilities
Who gets this money and how is it being spent? To build something (construction industry)? Probably to upgrade already existing facilities. Not a lot of stimulus here.
$6 billion High-speed Internet access for rural and underserved areas
This does little to create jobs or help businesses. However, if you think that greater access to the internet can increase ones opportunities to find jobs, I'd have to agree, so while I think this is a task better left to the states, at least it can be justified as stimulus, maybe. So, we are up to 12 billion in "legitimate?" stimulus.
Infrastructure
$32 billion Transportation projects
$31 billion Construction and repair of federal buildings and other public infrastructure
$19 billion Water projects
$10 billion Rail and mass transit projects
I'll deal with this as a lump sum. 92 billion dollars for repair, construction, etc. of our infrastructure. These all sound like things that assist with interstate commerce, which is actually the job of the federal government, so we could argue (depending on the specifics of course) that this 92 billion is legitimate, so up to 104.
Education
$41 billion Grants to local school districts
Sounds good, but doesn't stimulate anything.
$79 billion State fiscal relief to prevent cuts in state aid
Probably useful, but, doesn't stimulate anything, again.
$21 billion School modernization
I guess this might help out somewhere in the construction industry, maybe.
Health Care
$39 billion Subsidies to health insurance for unemployed; providing coverage through Medicaid
This could be the greatest expansion of Medicaid ever, at least since it was originally created. Are we seriously going to add the unemployed to Medicaid? Hmm... not sure how I feel about that one. I always thought it was for seniors. Guess I was wrong.
$90 billion Help to states with Medicaid
And we are going to give money to the states to cover their Medicaid shortfalls. Really?
$20 billion Modernization of health-information technology systems
I know what this one pertains to and it is very big brotherish, but it might help out in keeping one doctor from prescribing something that in conjunction with something you got from another doctor could kill you. It doesn't stimulate the economy though.
$4 billion Preventative care
Preventing what? Regardless, no stimulus.
Taxes
Individuals:
* $500 per worker, $1,000 per couple tax cut for two years, costing about $140 billion
Okay, this 140 billion dollars assumes that we would actually spend this money, but with no requirement to do so, we found out last year that we won't.
* Greater access to the $1,000-per-child tax credit for the working poor
Probably not a bad idea, maybe, but how would it stimulate the economy, the working poor can't afford to spend much and won't spend anymore because you gave them a tax credit, which wouldn't help them anyway because the majority of working poor don't actually pay any taxes anymore anyway, so who would get the money through this expansion?
* Expansion of the earned-income tax credit to include families with three children
Interesting, but it still doesn't stimulate anything.
* A $2,500 college tuition tax credit
This would have been nice when I was in college, but it doesn't stimulate the economy!
* Repeal of a requirement that a $7,500 first-time homebuyer tax credit be paid back over time
This looks good and is helpful to homeowners, sort of. Nonetheless, it is a long term issue, not something that will help anyone in the short term and therefore, not stimulus.
Businesses:
* An infusion of cash into money-losing companies by allowing them to claim tax credits on past profits dating back five years instead of two
This might work for some, but how much and who qualifies really?
* Bonus depreciation for businesses investing in new plants and equipment
This is just peachy. In a time when almost everyone is having to contract their businesses in order to properly compete in the market, we are going to give out money for expansion, whether you need to or not. This is just plain stupid.
* Doubling of the amount small businesses can write off for capital investments and new equipment purchases
This is a nice touch. This one will also help out small businesses save a few dollars this year. Not really going to stimulate anything though, is it?
* Allowing businesses to claim a tax credit for hiring disconnected youth and veterans
Hmm... a tax credit for hiring people that you'd probably never hire for any other reason. Does that sound like a good business practice to you?
So, basically, I found 104 billion dollars of spending that I actually thought might have some effect as stimulus, and there is another 275 billion in tax cuts, most of which won't actually stimulate anything, leaving us with about 500 billion dollars going down the drain. Hmm... in addition, the 104 billion doesn't really do much for the economy overall. It seems like the primary recipient of these funds would be the construction industry. Great if you are in that industry, but how about anyone else? So, this bill isn't stimulus, it never was. It is a laundry list of things from the last 14 years that Democrats have wanted to shove down our throats but weren't able to do because they didn't have a majority or they didn't have the White House. Now they do and they have a chance to do meaningful things and instead, they are doing this. I do hope everyone will survive this stupidity so we can do something about it in 2 years. The Senate seems to be getting their head together in regards to this kind of spending so I can hope that they will, but we are talking politics here rather than economics.
No comments:
Post a Comment