Explosive Expressions (Entries tagged as stimulus)

You got your tax cut in my stimulus!

nospam@example.com (Jason Frisvold) — Fri, 06 Feb 2009 15:05:09 -0500

This whole stimulus thing is getting a bit out of hand now... My wife and I spent some time talking about it last night and I think we both agree that while stimulus is needed, it's being handled very poorly.

From our perspective, the economy works kinda like this. Your average person spends money on necessities such as food, clothing, etc. In a good economy, people tend to splurge a little bit and by better cuts of meat, higher quality clothes, etc. When the economy sours, they tighten the budget a bit and settle for the generic brands. But, no matter how you look at it, the necessities of life continue to be bought and paid for.

Those necessities, in turn, provide income for the local businesses and provide paychecks to the workers. Those workers are often the same people that are paying for the necessities in the first place. And so the cycle goes on. During an economic downturn, businesses don't bring in as much and may have to reduce the workforce in order to stay in business.

So now we have the unemployed. Unemployed people can obtain money to buy necessities in two general ways. First, they can apply for unemployment, assuming they had a previous job for a certain period of time. Or, they can apply for government assistance. The latter is, essentially, free money, though there are often strings attached. Of course, my personal opinion is that there are not nearly enough strings attached, but that's another story.

Now the unemployed have money to get necessities, which pays the workers, etc. The cycle is a little bigger, but still functional. Of course, because these people are unemployed, they tend to save as much as they can, effectively hoarding their money when they can. This is difficult, at best, but they really don't have any other options. The job market dried up because of the bad economy, so getting a job is out of the question.

All of the actors above pay taxes in one form or another. Generally, those on government assistance don't pay taxes because their income is too low, but they still pay sales tax, real estate tax, etc. Those on unemployment still pay normal income tax.

Ok, so once we get into this cycle of tightened budgets and unemployment, how do we break it? Well, the "perfect world" answer is to just spend more. Stop tightening your belts and start spending what you have. And that will work, but it's against human nature. The problem is, FUD (Fear, Uncertainty, and Doubt) are the guiding lights of the times. Fear of losing a job, uncertainty and doubt about the future all help to kickstart our built-in self-preservation instincts. How do we protect ourselves? Well, if we need to have money to survive, we start hoarding whatever we can. That way, we have it later, just in case.

Right, so let's make more money available then. But how? How about tax cuts. If we cut taxes, that reduces the amount people have to pay, giving them more disposable income, right? Yup, exactly right. But, because those people are still unemployed, human nature says they'll merely stuff that new income away with the rest to make sure they can survive for the forseeable future. Make no mistake, tax cuts help, but the average person will just squirrel away the money, not spend it.

How do we get people to spend their money then? We've given them more, but it did little or no good. What will it take? Well, jobs is a good start. A person with a job tends to feel more secure as opposed to one that does not. This is true even if the job they have is not completely secure. The problem is, jobs are scare because no one is spending. Because no one is spending, there's no demand for products. No demand for products means that businesses don't need workers to produce or sell those products, so they don't hire anyone.

Crap! We're still stuck in a rut! What now?

How about we create some jobs? Ok, great. How the hell do we do that? Force manufacturers to make more stuff? Well, you can't really do that, now can you. But we can create demand for products by buying them, right? But we don't want to just buy stuff to create jobs, we should probably put that stuff to good use. And how can we do that? By building and repairing our infrastructure, of course.

If the government spends money on repairing roads, renovating buildings, and other such activities, it creates a demand for raw materials. This, in turn, creates demand for workers both for the manufacturer of the raw material, as well as for the business being tasked with the infrastructure job. Workers get money, spend money, create demand, etc. Overall, this reduces the tightness of the market a bit.

So infrastructure spending is the answer then, right? Well, sort of. From my point of view, we need to attack this thing on multiple fronts. Jobs won't open up instantly, and people still need to survive today. My wife has come up with a plan that she believes will work. Let me lay it out briefly.

First, create a bill that handles the tax cuts. Obama ran on a platform of tax cuts, and this would let him live up to that promise. Simple enough, tax cuts for those making under $250,000 per year. That's it. Nothing else. Push it through and see what happens. Democrats should approve because that was Obamas platform. Republicans should approve because they seem to like tax cuts. Additionally, this gives Obama street cred and political capital to spend later.

Second, create a bill that extends support for those out of work. Add additional time to unemployment benefits. Extend welfare, food stamps, and other government aid. Put a time limit on it! We don't want this forever, just for the immediate future. Push this through. Not sure how much trouble this one would be, but I don't think it would see much contention as there are existing provisions in the current stimulus bill to do this already.

Last, infrastructure. Infrastructure comes in many parts. There's traditional infrastructure such as roads and buildings, park maintenance, etc. That will likely be the destination for most of the stimulus money. Jobs created here would be on road and maintenance crews, industrial jobs, etc.

There are other areas that can be tapped as well. For instance, the existing fleet of vehicles that the government uses can be converted to hybrid and eco-friendly vehicles. Obviously a one-shot replace everything approach would be foolish, but there are likely a lot of vehicles due to be replaced. And, of course, those vehicles need to be built, so car makers have jobs. An added benefit here is increased demand for hybrid/eco-friendly vehicles which can lead to additional research in the area, producing better vehicles, etc.

How about modernizing government buildings? This includes items such as adding infrastructure to the building for network connections, modern telephone equipment, etc. In addition, the buildings can be made "greener" by using alternative lighting, heating, and electricity sources. This adds a benefit of ecological responsibility to the equation. Jobs here would be in construction, HVAC, IT, etc.

And there may be other areas that can be tapped as well. Care has to be taken, however, to prevent foolish spending from being added. First of all, spending that is not directly stimulus related should be ejected altogether. Second, let's concentrate on items that will generate long-term jobs and inject capital into the economy in a rapid manner. So, for instance, as important as some people think digital television convertor boxes are, I don't see this as something that will generate long-term jobs. Screening and preventing STDs? I don't think that has a place here either.

There's a lot to be done, and I think there's a clear path to saving our economy. But, if we squander the opportunity we have now, we may not get another. So please, let's get this right. Let's not have another bank bailout situation.

Stimu-what?

nospam@example.com (Jason Frisvold) — Wed, 04 Feb 2009 16:56:26 -0500

So, the debate rages on. What's going to stimulate the economy, and what isn't?

CNN has a breakdown of some of the topics that the GOP is concerned about.

Let's take a look, shall we?

- $2 billion earmark to re-start FutureGen, a near-zero emissions
coal power plant in Illinois that the Department of Energy defunded
last year because it said the project was inefficient.

Hrm. Coal. Well, how do you do zero emissions coal? I'm not sold on this whole clean coal thing yet. And it's near-zero, which means there are some emissions. And emissions and byproducts are two different things, so... Ok, I buy this one. Let's axe it.

- A $246 million tax break for Hollywood movie producers to buy motion picture film.

Er.. why? Seriously. Why? They make millions on the movies, yet we need to help them pay for the film? Axe it.

- $650 million for the digital television converter box coupon program.

Didn't this coupon thing already happen? And wasn't it a complete failure? Supposedly the purpose here is to let the lower-income families continue to have TV reception after the conversion, but I think these coupons were snapped up rather quickly by everyone. I don't see more coupons making life easier, either.

- $88 million for the Coast Guard to design a new polar icebreaker (arctic ship).

This is a DoD thing, isn't it? Isn't the Coast Guard technically an arm of the military? They have a budget. A massive, huge, disgustingly large budget. In fact, their budget is so large that $88 million is like pocket change. Axe this.

- $448 million for constructing the Department of Homeland Security headquarters.
- $248 million for furniture at the new Homeland Security headquarters.

Wow. That's like.. Wow.. I'm not sure how big this building is going to be, but it better be massive if it's going to fix a quarter of a billion dollars of furniture in it.. Seriously, are we loading this thing up with desks of gold and chairs of diamond?

Look, the DHS is supposedly a good thing, though I have a hard time believing it so far. And they need to have a place to do business, right? Are there no existing places in DC that can be purchased? I can accept the cost for building a new building, but $200+ million for furniture? Hell no.

- $600 million to buy hybrid vehicles for federal employees.

Well, techincally, this is probably a good thing. Reduces oil consumption (presumably), and requires people to build the cars, right? So what's the problem?

- $400 million for the Centers for Disease Control to screen and prevent STD's.

Why would you want to block this?

- $1.4 billion for rural waste disposal programs.

I'm not sure I understand this one. Isn't this a state/local responsibility? Or is this money going there?

- $125 million for the Washington sewer system.

They're rebuilding congress?

- $150 million for Smithsonian museum facilities.

Hrm. Well... Hrm. Does this produce more jobs? Sure, the facilities need to be built, and someone needs to run them... Not sure this fits under the umbrella of stimulus, though. The Smithsonian is a government institution, though, so perhaps this does fit. On the fence about this one, I think.

- $1 billion for the 2010 Census, which has a projected cost overrun of $3 billion.

COST OVERRUN? Jesus, we're counting people here, what's the problem? How about we do it online? No, wait, it has to cover everyone.. Hrm... What's the purpose of this again? There has to be a better way of handling this.. $3 billion is insane..

- $75 million for "smoking cessation activities."

As much as I would love to agree with this one, it's in the wrong bill. This is a stimulus bill and smoking cessation really doesn't create new jobs. In fact, if you want to look at it from a job perspective, if people stop smoking, it will actually result in a loss of jobs, no? Quit anyway, though. It's a great way to save some cash.

- $200 million for public computer centers at community colleges.

Another great idea, but not really for a stimulus bill.

- $75 million for salaries of employees at the FBI.

Increased salaries is nice.. But this doesn't create jobs, does it?

- $25 million for tribal alcohol and substance abuse reduction.

See above reasoning for smoking cessation. Additionally, by "tribal," are they talking about Native Americans? Or is this some other meaning I'm not sure of... Seriously, do we need to pinpoint a specific population for this?

- $500 million for flood reduction projects on the Mississippi River.

Aha.. Infrastructure. This is probably a good thing, is it not? It should provide work for construction workers, and provides much needed infrastructure for the country.

- $10 million to inspect canals in urban areas.

This seems like a short term thing to me. Is there some intention to fix/replace/do something with these canals?

- $6 billion to turn federal buildings into "green" buildings.

Damn.. $6 billion dollars worth of green paint? Oh.. right.. Yeah, I like this one. I don't see a major problem with renovating buildings and making them more energy efficient. In fact, this will also reduce the budget as less power would be needed for those buildings. I see that a win.

- $500 million for state and local fire stations.

This is necessary infrastructure, I believe. Assuming this is to keep existing fire stations open and possibly to open additional ones?

- $650 million for wildland fire management on forest service lands.

Would this help in California and other places where wildfires are prevalent? Seems like there's plenty of work to be done there, and this would keep those jobs open, no?

- $1.2 billion for "youth activities," including youth summer job programs.

Hrm.. This would keep the youth out of trouble, provide jobs for those monitoring the activities, and even create jobs for some of the youth as well.. What's the argument against this one?

- $88 million for renovating the headquarters of the Public Health Service.

Why? And wouldn't this fall under the green building thing from before?

- $412 million for CDC buildings and property.

See green building argument above.

- $500 million for building and repairing National Institutes of Health facilities in Bethesda, Maryland.

Seems to me there's a pattern here. Perhaps these buildings need better upkeep? Are these in such bad shape that this is necessary? And is it normally the government who pays for renovations such as this?

- $160 million for "paid volunteers" at the Corporation for National and Community Service.

This is cheating. Seriously. If these are volunteer positions, then pay isn't supposed to be involved. If it's a job, then fine. But this seems pretty short term to me.

- $5.5 million for "energy efficiency initiatives" at the Department of Veterans Affairs National Cemetery Administration.

Ok, I don't mean to be crass, but umm... graves.. they're pretty energy efficient already, no?

- $850 million for Amtrak.

Why? Seriously. Why? This is not a government organization, and I don't see why they should get money and someone else doesn't. Is this company in danger of collapsing? If so, why?

- $100 million for reducing the hazard of lead-based paint.

Stop using lead-based paint. There. Saved you $100 million.

- $75 million to construct a "security training" facility for State
Department Security officers when they can be trained at existing
facilities of other agencies.

I'm gonna guess that should be "when they can't be trained at existing facilities" ... Kinda stupid to build a training facility to train people that can be trained elsewhere. Besides, this is hardly something that will stimulate the economy. Drop this.

- $110 million to the Farm Service Agency to upgrade computer systems.

Where's the stimulus in this?

- $200 million in funding for the lease of alternative energy vehicles for use on military installations.

Wasn't there a thing before about eco-friendly cars? Oh yeah, that and the BIG FRIGGIN BUDGET that the DoD has? Yeah.. suck it up.

Seems to me there's a TON of waste there. Most of this can be dropped, though some of it might be legitimate... Regardless, this entire stimulus thing is a complete mess. My wife has argued that it should be broken into multiple bills, each with its own theme. That's a damn good idea, though it'll never happen. Politicians seem to like to muddy these bills up with all sorts of useless shit before they push them through..

*sigh*