Some "stimulating" thoughts

(5 Feb) Before I get too carried away, I'd like to state - for the record - that I'm an independent voter. I'd also like to state that, inasmuch as I've been in the business of helping people make smart decisions about their money for well more than half my life, I am definitely a drinker of the free-market Kool-Aid.

So, about this "stimulus" bill.

What's the big deal about it getting passed so dang fast...other than to reward political cronies - IMHO. Right now, the Democrats in the Senate have said that, due to the increasing hue and cry from all around the country against this piggy in a blanket, they don't have the votes to pass the bill, as is. No surprise that the Republicans are voting against it - though highly unusual to see all of them in the Senate doing so. There are also a bunch of, I'll call them, moderate Democrats not wanting their names on this thing either.

There is NO historic proof that governmental spending will take our economy out of a recession. That doesn't mean it won't get passed. After all, most of the media has decided it's essential - and we know how unbiased those folks are. However, there may still be some hope that there will actually be something that can stimulate the economy in the final bill and I believe most would vote for that.

The catch is some of what I'll polish up for this post to call the "you must be kidding me" provisions. Hopefully, many will be much reduced, if not eliminated. Going back to reflecting on records, I'm sure that there are some well-intentioned folks who actually do believe that some of these things are essential. Nonetheless, as a person with no ax to grind on any of these issues, let's consider a few for fun.

You want my money for what?

Again, before the hate mail starts, understand that I'm looking at this as an economic stimulus bill only - with a minimum of add-ons, earmarks, oh by the ways, whatever you call them.

In no particular order, how does doubling the Federal subsidies for child care stimulate the economy? We also have $4 billion for Federal job-training programs which, theoretically, should be beneficial but, in fact, have a really well-documented record of non-performance.

Apparently, I guess so everyone can watch C-SPAN, we need $650 million for stuff about the switch from analog to digital TV. I guess all the money that's already been spent on this over the past few years just wasn't quite enough. Just where are the jobs from this?

We also have $4.5 billion for the U.S. Army Corps of Engineers budget. Here's the problem. In addition to doubling their budget, this would be in addition to an existing $3.2 billion that has been appropriated - but that the Corps has not yet figured out how to spend! And these guys are already often criticized for wasting taxpayers’ money.

Tax relief?

While I'm all about reducing personal and corporate income taxes to stimulate the economy, what's in this bill may stimulate votes from the uninformed but not the economy. The rebate checks for the low and middle-income folks - based on last spring's results - don't do much of anything. What seems to be in the bill is a lot of foregone revs with little to show for that loss.

The continuing saga of income transfers

One of the things that really sets my choppers on edge is the concept of "wealth redistribution" where non-productive entities are supported by productive ones. The bill, as is, contains $89 billion in Medicaid extensions and another $36 billion in expanded unemployment benefits.

The Medicaid extension is structured as a temporary increase in the federal match. Hold that thought. When was any increase in government spending really temporary??? Seems to me that many of these "programs" have a more than better chance of becoming permanent.

Extending unemployment benefits might be a good idea for other reasons, but it sure won't stimulate economic growth. IMHO, all it does is to provide an incentive for job-seekers to delay re-entry into the workforce.

Oh yes, a personal fave - green energy

There have been BILLIONS of dollars poured down this rat hole through government support over decades. Contrary to what that chunky former senator from a southern state says, your government has been wasting money here for some time. Even this mandating of ethanol - you know, that stuff it costs more to make than you can sell it for, engine rotting fuel additive - has done nothing.

The folly is that, presumably, some rational and intelligent folks, think that another $20 billion will transform everything is simply the idealists ongoing triumph of hope over experience.

Fiscally conservative states having to bail out those who create programs with no fiscal prudence

The State Fiscal Stabilization Fund comprises $79 billion of the bill. Interestingly, among other provisions, the bill states that school budgets are not to be reduced below 2006 levels. Okay.

Here's the rub. The largest, fastest growing segment of the expenses for public schools is...administrator's pay. We certainly wouldn't want those voters put at risk. I guess that's stimulus for them and their votes. No direct spending on what is the basis for any quality education - teachers and books.

Most of this bill looks like a straight handout for strong supporters of the current administration and no more. Kind of like how they do things in my old home town of Chicago.

Wonder how they got the idea???