The more I think about it, the more the anti-recession stimulus package feels like a bad idea. The Congressional Budget Office forecasts economic growth of under 2% this year. If I recall HS economics correctly*, a recession is when the economy shrinks, not when it grows less than what some stock brokers might want. University of Michigan professor Mark Perry puts together a chart on unemployment claims that suggest we are nowhere near a recession. And Harvard's Prof. Mankiw posts a list of eleven columnists comprising what he calls "The Coalition Against Fiscal Stimulus," including George Will and Robert Samuelson. In agreement with the likes of those two conservatives that the stimulus package won't work is Robert Reich, Bill Clinton's labor secretary, now UC Berkeley prof.Count me in with the stimulus package naysayers. Even if our economy is in the crapper, it is in large part because a lot of people borrowed more money than they should have, and because banks and subprime lenders let them borrow. While I cringe at the thought of taking away people's homes, it may be time for some economic tough love. We as a nation have borrowed irresponsibly; we are lucky the economy isn't in worse shape. Instead of borrowing $140 billion dollars from our children so we can continue to live beyond our means, maybe we should finally accept responsibility for our greed and overspending.
I'm not eager to give up $1500 in free money from Uncle Sam. I certainly don't want the Powers clan to go shoeless for want of its expected $3300 tax rebate. But if there's not really a recession, and if a stimulus package won't do much to stop one, then why throw $140 billion of our children's money down the consumer spending drain now?
We won't like it, but maybe we need to just weather this economic storm (if it even rises to that level), pay our debts (federal and household), and start putting the economy on a more stable footing for our kids. Hmm, sounds like a much more doable plan for building a legacy than bringing peace to the Middle East....
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*I do remember my high school econ and govt teacher, Ken Reitzel. Sad news for my Madison readers: Mr. Retizel passed away last week at age 77. The MDL obit says he served in the Army in Japan during the Korean War. Mr. Reitzel then taught in Estelline, served as principal in Hurley and Willow Lake and superintendent Colman, then came to Madison, where he taught social studies for 26 years. Condolences may be sent to the family through Weiland Funeral Chapel.
The stimulus package is nothing more than a back-door agreement with China, who is fronting the $150 Billion to the US government so it can send checks to taxpayers, who in turn will spend a disproportionate percentage of those checks buying necessities from Wally World, most of which are produced in China. Their image and sales are suffering from the "lead" paint issues, dangerous ingredients in vitamins and pet foods, so here comes China to our rescue, and we in turn, shall rescue them. Interesting?
ReplyDeleteChina is certainly counting on our continued frenzied buying to prop up their accelerated GDP growth. Maybe the whole world economy needs to take a breather... but can we do that without disaster?
ReplyDeleteIt is all part of the mythological belief that prosperity can be defined in terms of consumption - i.e. that the ability to consume is a summum bonum, is itself a stimulus towards prosperity. Naturally under such a misguided value system, we would find any and all means to increase the ability to consume, as this would continue to foster the illusion of prosperity, including the squandering of future resources for immediate short term gain. But if ability to consume is in fact simply a side effect of the achievement of prosperity, we (collectively) may be in for quite a rude awakening when the illusion withers and we see there is nothing but a man behind the curtain waving his wand at indicators and chanting complex formulas.
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