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Pelosi's Obama ear marked porcine stimulation of government bill
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An astute political observer in Alabama, while issuing disclaimers that he was not an economist as he conveyed astute observations to his economically and legally credentialed friend, would have made William Shakespeare proud with soul of wit brevity in reducing the “stimulus” issue down to its essentials.
Two ways to stimulate
“Mike,” he said, “aren’t there only two ways to stimulate the economy: Let the banks make loans based on market wisdom rather than government direction and stimulate job-producing investors to borrow and spend thru corporate, capital gains and other tax rate cuts and regulation reductions.”
I think that sums it up pretty well.
Not a Stimulus
The outline we now have of the Speaker Nancy Pelosi (pictured) House version of the Obama stimulus plan meets neither of the necessary criteria. In short, it is not a “stimulus” bill, unless by stimulus you mean state and federal government job retention and public works pork. We were told that there would be no earmarks and no pork. Yet, what are most earmarks? Public work projects, i.e. pork. I guess if enough of the bill is pork, it metastasizes into “stimulus. Must be an organic “meat”?
Let’s look at some details:
Details of the two-year package, which calls for $550 billion in new spending and $275 billion in tax relief… the document provides the first blueprint of how President-elect Barack Obama and congressional Democrats plan to fight the historic economic downturn, which has already wiped out 2.6 million jobs… [but] few elements of the package would hit the economy before the second half of the year, with the largest boost coming in late 2009 and into 2010.
Not a crisis afterall?
Ok, so we have an emergency, an economic crisis and are virtually threatened daily by the President-Elect that failure to pass the bill before President’s Day (James Buchanan gets equal billing with George Washington), or we would be risking another Great Depression. (We were originally told that we risked calamity unless it passed on Day One.) Yet, now are told that “few elements” of the bill would stimulate until “late 2009 and into 2010.”
Guess they plan on blaming Bush till Valentine’s Day 2010? But I thought the liberal democrats cared about the suffering of Americans going on now?
Public works don't stimulate
We have much experience with pork barrel public works spending in this country since the Great Depression, and despite all the talk of getting funds to “shovel-ready” projects in the states, the fact is that all that will be stimulated initially are jobs for lawyers issuing environmental impact studies. In any event, public works have no history of stimulating recessions into recoveries, ever, even in the equivalents of “late 2009’s and into 2010’s.”
Stimulus only for lawyers and environmental inpact reports
So far, we see that the caring is about lawyer jobs. But what of the rest of the 2/3 the package that is spending:
Some of the biggest expenditures will go directly to the states, with $90 billion going to increase the federal share of Medicaid payments and an additional $79 billion to help states avoid cutbacks in education and other services.
Most of the money is what we called “revenue sharing” in the pre-Obama Era. Now, we have come to what this bill actually is about: saving government jobs.
We are told by President-Elect Barack Obama that we all have to sacrifice, to have “some skin in the game.” Turns out the skin of private companies must lay-off workers but not the government. No, government skin is more equal than other skin in Obama and Pelosi’s game.
Admittedly, Obama's original vague proposal (now removed for the web) sounded better than this Pelosi monstrosity, which is a stimulus bill for government only.
You can look at the details of the spending via the link above, and I am for some of the public works projects. [I also hope that North Carolina, and especially Charlotte gets its fait share. - see box below) But when so much is being spent under the guise of combating climate change fka global warming while the nation is in deep freeze, on “investments” in “clean” energy, I turn a cold shoulder to any claims of “stimulus.”
Tax cuts are good, but aren't the kind that stimulate
But oh yeah, there are some token tax cuts, just not to likely job producers. You see, those folks have been on strike since the democrats took over Congress in 2006 and let the world know that the tax rates of job producers would go up at least by 2011. Obama holds out a Valentine that, despite his class warfare campaign to raise those taxes on the “rich” (ever get a job from the “poor”?), he might just let the “Bush” tax cuts die a natural death.
How nice. The very policy that has had investors on strikes since late 2005 will remain in place and that’s supposed to be a favor?
We know what stimulates, thanks to Coolidge, Harding, JFK, Reagan, Dubya, and Alexander Hamilton for goodness sakes, and that is Liberty, i.e. incentives to industriousness due to the prospect of getting to keep the fruits of one’s labor and capital.
Now, I have rarely seen a tax cut I didn’t like, but most of these are one shot deals much like the two Bush rebates that will not cause consumers to fundamentally change their behavior, i.e. spend instead of save. For that, even the senior senator from Illinois now admits, requires permanent tax rate changes.
So what do we have in the way of tax changes in the bill?:
Businesses would get "bonus" depreciation for investing in new plants and equipment. The proposal also allows companies that have losses this year to get refunds for taxes paid as far back as 2003; current tax rules allow losses to be carried back only two years. The plan also includes Mr. Obama's "Making Work Pay" tax credit of $500 per worker and $1,000 for couples.
The bonus depreciation is good, but won’t kick in for many years. The carry-back loss provision is good, but, by definition only applies to failing companies that aren’t going to be hiring new workers.
The puny $10-20/week individual tax credits, are, well, pathetic.
Why not do what we know works?
Want to really boost spending? How about either a permanent or temporary payroll tax cut?
But if you really want to stimulate the economy, let’s do what we know works and get job-producing investors off strike. Let’s slash one of the world’s highest corporate tax rates, follow the Clinton-Gingrich example and cut capital gains tax rates.
What we have in this country now is a shortage of capital after all!
And let’s follow JFK, Reagan and Bush43 and cut tax rates at the top and let the rich do some hiring.
For decades conservatives have been slandered by the liberal media and democrats as not “caring” about the poor and downtrodden.
We care. Do you?
We can see the left cares about saving government and lawyer jobs, but what about a stimulus for the rest of us?
Mike DeVine’s Charlotte Observer, and Minority Report columns
"One man with courage makes a majority." - Andrew Jackson
But since its not a stimulus bill, we do hope our new Governor of the Tar Heel State is successful in her pig hunt for infrastructure money and pray that Raleigh would leave some scraps for Charlotte's antiquated highway system. As to the revenue sharing money she seeks, we are confident North Carolina comes out on the short end as a net revenue loser, but we digress.
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