Monday, February 02, 2009
What is Stimulation?
While I'll gladly agree with Glenn's argument that the "Stimulus Bill" is the opportunity to fund massive infrastructure , I've got to disagree with his premise that things like food stamps, medicaid, green energy research, etc...should not be considered stimulus.
The fact is that every dollar of food stamps and medicaid is spent almost immediately and pumped into local economies. As someone who works in the food industry, I can assure the skeptics that food stamps help working class folks keep their jobs. Just ask Price Chopper and Big Y how many employees would be laid off if food stamps disappeared tomorrow?
States are already trimming Medicaid due to budget restraints just as the recession is creating a swelling need for subsidized services. Again, ask North Adams Regional Hospital how many workers would lose their job if Medicaid ended tomorrow.
And Green energy research? That money isn't disappearing into thin air. It is creating NEW jobs.
This is not 1932. The programs put forth are not going to look just like The New Deal. But even back then, FDR called for "relief" programs which kept a certain number of people fed.
The idea is still the same - Keep people employed, provide a safety net for those who lose employment AND also create new jobs. The money ALL goes right back into the economy with a certain multiplier effect.
In 1933, unemployment was around 25%. After four years of The New Deal it had fallen to 11%. It was only when the fiscally conservative Blue Dog Democrats convinced FDR to cut back spending in 1937 that the economy dipped again and unemployment spiked to 18% a year later. It took Hitler and Tojo to prompt the kind of spending that brought the economy back to sustainable low unemployment.
While I'd love to see more concrete and steel in the bill, I don't think worrying about the tiny percentages of the bill being spent on poor people is appropriate or necessary. Instead I'd be much more concerned about huge 11 and 12 figure chunks of taxpayer monies that are going to large institutions that want Uncle Sam to make their investors whole. Screw that. Majority shareholders do not need relief. Buy the banks, wipe out the shareholders and let the debt-laden U.S. Treasury reap the profits when the banks are re-sold in a few years.
And remember, the dollars in the bill need to be spent. ¶ 7:40 PM
The fact is that every dollar of food stamps and medicaid is spent almost immediately and pumped into local economies. As someone who works in the food industry, I can assure the skeptics that food stamps help working class folks keep their jobs. Just ask Price Chopper and Big Y how many employees would be laid off if food stamps disappeared tomorrow?
States are already trimming Medicaid due to budget restraints just as the recession is creating a swelling need for subsidized services. Again, ask North Adams Regional Hospital how many workers would lose their job if Medicaid ended tomorrow.
And Green energy research? That money isn't disappearing into thin air. It is creating NEW jobs.
This is not 1932. The programs put forth are not going to look just like The New Deal. But even back then, FDR called for "relief" programs which kept a certain number of people fed.
The idea is still the same - Keep people employed, provide a safety net for those who lose employment AND also create new jobs. The money ALL goes right back into the economy with a certain multiplier effect.
In 1933, unemployment was around 25%. After four years of The New Deal it had fallen to 11%. It was only when the fiscally conservative Blue Dog Democrats convinced FDR to cut back spending in 1937 that the economy dipped again and unemployment spiked to 18% a year later. It took Hitler and Tojo to prompt the kind of spending that brought the economy back to sustainable low unemployment.
While I'd love to see more concrete and steel in the bill, I don't think worrying about the tiny percentages of the bill being spent on poor people is appropriate or necessary. Instead I'd be much more concerned about huge 11 and 12 figure chunks of taxpayer monies that are going to large institutions that want Uncle Sam to make their investors whole. Screw that. Majority shareholders do not need relief. Buy the banks, wipe out the shareholders and let the debt-laden U.S. Treasury reap the profits when the banks are re-sold in a few years.
And remember, the dollars in the bill need to be spent. ¶ 7:40 PM
