Every once in a while, I think I have misjudged our elected representatives. Then they go and do something massively boneheaded, and I am reassured that my initial assessment was correct.
Who in their right mind thinks that spending $800 billion of the taxpayers' money is a good way to get this country back on its feet financially? OK, I'll give you the tax cuts (more about that later), but the spending is ridiculous!
Infrastructure spending? Granted, we do need it - the reports on our bridges and highways tells us that much. But is the stimulus bill the right place for it? These projects will generate jobs, certainly, but the way this thing is structured, they will all be temporary (once the work is done, you don't need the workers anymore, after all). So two or three years down the road, bam! Unemployment shoots back up. And infrastructure projects doesn't even begin to address the unemployment issues we have on the white collar side, unless you seriously expect out of work investment bankers to be swinging shovels? Might be entertaining, at least until the first heart attack, but I don't think so.
And of course, there's the pork. Heck, with all of the pork, you'd think they were having a barbecue on the Hill. Can we say social engineering? To be honest, I don't disagree with all of the proposed spending - I think getting health records automated is a good idea, one that will help doctors provide better care. But it is not going to stimulate the economy, and should be debated in a separate bill.
So what about those tax cuts? I've been hearing the various congress critters talking about a $500 tax credit. At first, I thought, "$500 a month - great!" But then they went on to explain that it really means $500 a year. I have news for all of you in Congress - I don't know what planet you're on, or when the last time you actually had to live on the economy was, but $500 a year is nothing. I paid the federal government $12,000 out of my paycheck in 2008. So you're going to cut that back to $11,500? Gee thanks!
To put it in perspective for you, $500 is equal to my utility bill for one month, or one fifth of my mortgage payment, or one quarter of my property taxes. So as far as a stimulus, it falls pretty short of the mark.
So what should we do? Everyone seems to agree that we need to do something, so here's my suggestions:
1) CUT TAXES. An across the board 50% tax cut for everyone. Let people keep their money so they can pay off their debts (aren't those what got us into this in the first place?), and have more cash available to pump back into the economy - the list of purchases I've been deferring is about as long as my arm. Cut the corporate tax rate to 11% - make us competitive with the rest of the world, and you might see less outsourcing and relocations - and isn't bringing jobs back to the U.S. the point?
2) CUT SPENDING. Hey, when my income goes down, the first thing I do is try to economize on my expenses. So why is the government borrowing money that my kids and grandkids will have to pay back, so that they can keep spending like drunken sailors? Nobody likes to cut programs, but at some point you have to bite the bullet and stop the bleeding.
3) REWRITE THE BUDGET RULES. Currently, the rules allow Congress to count things like the Social Security trust fund, projected future tax revenues, and a bunch of other things as income for the government in the current fiscal year. This is insane. If you take the Social Security money out of the picture (which will happen as soon as the boomers retire and Social Security is no longer taking in more money than it pays out), the national debt is approximately $56 TRILLION! Let's have some truth in our accounting, instead of hiding the costs of these programs through slight of hand. After all, the first step to a cure is admitting you have a problem...
4) REWRITE THE TAX CODE. How about we have a tax code that your average PhD can understand, never mind the poor guy who only has a B.S in engineering. On top of that, eliminate federal tax withholding. The biggest problem we have with people understanding the tax burden on our citizens (especially among liberals) is that it is mostly invisible. Because the money gets taken out of the paycheck automatically, most of us never think about that withholding - all we look at is our take home pay. Come April, whatever rebate we get seems like a gift from the government, which is exactly how they want it. In reality, that rebate is your own money, which you have lent (interest free) to the government for a year. Eliminate the withholding, so that come April every person ends up writing a check to the government, and I guarantee that you'll hear a LOT more talk about the tax burden on our population. Writing a check for several thousand dollars will do that.
So there's my plan to stimulate the economy. What do you think?