It's Time to Rethink Stimulus

Today’s job numbers have precipitated the usual response from Washington. Spend more money! Get ready for Stimulus ll.

Now all of that might make some sense if we had been spending Stimulus l but so far official estimates put the money out the door at about 10% of what’s been appropriated. That of course leads one to the conclusion that maybe we need to rethink the whole thing. If it’s that hard for the government to spend money then perhaps we just need to put it in the hands of people that know how to go about doing that. I’m referring to the American consumer, of course.

So, why don’t we go back to square one. Let’s rescind the entire stimulus package and just suspend the payroll tax for however long it takes to get the economy back on track. This will deprive a number of politicians of the ability to direct money to sectors of the economy that represent the best bang for the buck in terms of enhancing their prospects of being reelected, but, oh well, we all have to sacrifice. And the Obama administration might have to shelve some green dreams for awhile but a grateful America will surely see its way clear to fund them later if they can just get some damned money now.

This isn’t rocket science unless you’re a government employee or an economist. The former need to make the process of funding recovery expenditures as cumbersome as possible in order to enhance job security while the latter need to argue among themselves endlessly about what does or doesn’t work in order to justify their existence. I know it’s messy and flies in the face of the need to come up with the perfect plan before we spend a dime, but just putting money in folks pockets usually results in them spending it.

So, just cut the tax, maybe shove up unemployment benefits, come up with a program to get cash to the self-employed who are dying quicker since they don’t have access to unemployment benefits and get out of the way. You might be surprised at how simple it is to get this economy rolling again.

Remember, KISS (Keep It Short And Simple Stupid) usually works well.

Comments

[Dave Wrixon:]

Frankly that is the most moronic suggestion I have heard in quite a while.

Jul 02 06:07 PM

[Dave Wrixon:]

But hell, just go for it. Like the rest of the World gives a damn anyway!

Jul 02 06:08 PM

[Danny Newton:]

I don't see any chance of a psychological turn around until something happens to kill Cap and Trade. Increasing the cost of all secors is not likely to do anything positive for the economy. If someone in the Senate would organize a block of voters that would prevent passage like John McCain did to prevent the Nuclear Option wit hte Gang if 14, there would be at least a chance that the recovery would come sooner.

Reorganizing helath care is also not likely to do anything positive. If it works, people will just be forced to make different choices about how they spend their money. Instead of non-health purchases, there will be health purchases. The economy will restructure itself to confirm to the new reality but there won't be any more resources to use on health care if there is not an increase in productivity. I don't mean Chinese or Mexican productivity either.

There was a lot of pain and job loss after the construction of the Interstate. Roadside service industries along the old routes died or moved. The ability to travel farther in a day caused a decline in roadside service jobs and probably had a bad impact on the central core of most cities. The ability to travel farther however also created larger areas around attractions that now contained more potential visitors.

The restructuring of our transportation intake is nothing compared to the restructuring of our health care consumption. The dollar amount is much larger and there will be more pain. Transportation usually consummes about 11 percent of disposable income. Health Care will take a much larger bite. The Construction of the Interstate was much more expensive than anticipated and took longe than anticipated but the added productivity overcame the drag on the economy that restructuring to the new reality caused. I see nothing in the future about any productivity increase coming from health care improvements. Most of the health care costs are in the final days and there will be a small fraction of people who can return to the workforce to make the investment worthwhile unless you count human life at a very high amount.

Jul 03 06:21 PM

[W.E. Heasley:]

Agreed! Recall the Stimulus!

Of course that would upset The Center for American Progress. Or is that really The Center for Regressive American Progress (CRAP).

If they did recall the stimulus, maybe getting rid of Goolsbee, Romer, and Jared “The King of Spin” Bernstein might be appropriate too.

Jul 03 11:51 PM