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What Should and Should Not Be Included in a Stimulus Plan

Posted by libhom Tuesday, November 11, 2008

Stimulus plans are the buzz of the news outlets, yet very little is discussed in specifics. The failure of the Bush/Reid/Pelosi stimulus plan earlier this year shows that future ones need to be designed more intelligently.

What Should Not Be Included in a Stimulus Plan?

Tax cuts for the rich: Rich people speculate wildly with money from tax cuts, as we have seen with the various investment bubbles and the Crash of 2008. Giving more money to the rich just hurts the economy. If anything, we should use tax increases to make them pay something closer to the fair share in taxes.

Tax cuts or rebates for the rest of us: We won't flush the money down the toilet like rich people usually do, but tax cuts for those of us who are middle class and for the poor won't stimulate the economy. Why? The main reason people are not spending is job insecurity. A small tax cut or a few hundred dollars in a rebate won't open up peoples' wallets when they are afraid of losing their jobs. Any serious effort to stimulate the economy must involve direct job creation. Tax cuts for the middle class and the poor might be part of an economic justice bill, but no one should pretend that they will get us out of our current mess.

What Should Be Included in a Stimulus Plan?

Ending the Iraq War: The Iraq War is a huge drain on our economy. Bringing people and their paychecks home would be a big help.

Lengthening the time people can receive unemployment insurance: Making job loss less frightening makes spending less frightening. Simple logic often gets lost in corporate media that are focused on making their rich owners and advertisers happy.

Public works focusing on long term needs: A sensible stimulus plan won't just be about fixing our short term troubles. It will provide long term economic assistance that will help to pay off the money being spent now. For instance, fixing our crumbling infrastructure will prevent economic disruptions caused by failed bridges, water mains, etc. Massive expansion of public transportation will reduce our dependence on foreign energy sources and fight global warming, both of which will help the economy in the long term. Even NYC is not adequately covered by its subway system, and the city has the best subway system in the country. America can and must do better than that.

Financial support for state and local governments: State and local governments aren't allowed to run deficits, and that means that jobs are being cut due to falling tax revenues. Our economy can not afford more lost jobs. The bailout should include financial help to states tied to preventing layoffs.

Expanded healthcare coverage: This will create jobs for doctors, nurses, and administrators in a time when we need more jobs. It also would make currently uninsured people more secure to spend money since they are less likely to be bankrupted by a medical emergency. Expanding the services of the Veterans Administration would be a just and politically easy place to start, but the general population needs help too.

Greening the federal government: A lot of people could be hired to install solar and wind power at government facilities. That would create future savings for the government while putting downward pressure on energy prices for the entire country. Pushing telecommuting for more federal, state, and local government employees would reduce our use of foreign oil, reducing our foreign borrowing.

Carefully bailing out the automakers: This is an area where American workers and the taxpayers could get screwed if Congress and Obama are not careful. A bailout for the automakers should be used exclusively to help pay the wages and salaries of American employees. The automakers should lose the portion of the bailout that goes to any employees that get laid off. Otherwise, we will just be paying a bunch of corporations to ship jobs oversees.

Freezing ARM interest rate increases and foreclosures: This wouldn't cost the government any money and would dramatically stimulate the economy. It also would protect banks whose own greed and foolishness keeps them from taking these financially prudent steps on their own.

Update - Increase funding for food stamps: A hunger activist on the WBAI news suggested that increased food stamp funding should be included in the stimulus package. This is an excellent idea. Food stamps, unlike tax cuts, have to be spent. Also, the last thing we need for rebuilding consumer confidence is to have peoples' relatives, friends, and former co-workers hungry or going to soup kitchens. An added benefit of this policy is to prevent layoffs at food markets.

 

1 Responses to What Should and Should Not Be Included in a Stimulus Plan

  1. GDAEman Says:
  2. Worth Repeating: "Simple logic often gets lost in corporate media that are focused on making their rich owners and advertisers happy."

     

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