Obama's Stimulus Package: Stimulus or Pork?

[drbob]

       President Obama has made his break from the Bush administration and now must get to work on the much more difficult problem of dealing with the economy.  Washington Post columnist, Robert Samuelson, has divided our economic difficulties into three separate but connected problems.  Samuelson says that the collapse of consumer spending, the financial crisis, and a global trade crisis are the three issues that Obama must try to mend. 
   Clearly consumer spending had dropped off a cliff over the past several years.  The reasons for this are the decline in the stock market.  American investors have lost several trillion dollars in just the past six months due to falling stock prices and that decline continues today.  The major reason for the drop in consumer spending is the employment crisis.  According to the U.S. Labor Department, America has lost over about 3 million jobs since in the last year.  Our unemployment rate has climbed to 7.2 percent.  Even those who are working, may be unwilling to spend.  They're waiting nervously to see if they will be the next one to receive the pink slip. 
       To fix the consumer spending problem, the President has offered an economic stimulus package.  This seems to me like a good idea, because if nothing is done, economists say, our economy might spiral downward for years to come.  Obama says his program will create jobs in the private sector, which in turn will get Americans back to spending again, causing business to become more profitable and hire more workers, who will spend more and more.  This is the theory. 
In practice, however, there is a lot in Obama's plan that does not seem likely to generate jobs.  In fact some of the plan seems to me to be giant source of cash for some politicians' pet projects.  There is $50 million for the National Endowment for the Arts.  There is $200 million for a teacher incentive fund.  There is $15 billion for increased Pell Grants for college students.  Now I believe that these programs are worthwhile and should be funded, but they will do little to create jobs and do not belong in this package.  President Obama promised that there would be no earmarks in this bill.  Factually, these are not earmarks, because they are in the main body of the proposed legislation, but they look a lot like earmarks. Unless Obama can explain clearly how they will generate jobs they should be dropped from the stimulus package. 
      The suggested stimulus program puts a lot of funds into construction projects, which will generate jobs.  However, construction spending takes a while to get started, so they are unlikely to create jobs in the short term.  Our economy needs the jobs now not next year or even later. 
      To be fair, we must note that the stimulus package is still a work in progress and the proposed pet projects are but a small part of the total $800 billion price tag.  Both houses of congress and the Obama administration will have some heavy negotiations, before process is done.  I have suggested some things to look for and as the process moves forward, let's take a few minutes to let our elected representatives know how we feel about what they are doing.   

[Palehorse]

I am very happy to see you post about this Dr. Bob, because I thought it was just me starting to get a little concerned when I saw what I believe to be "earmarks" appearing within this stimulus package.

I have to say I am more than a little concerned that this is going to decline into a spending free for all before it is all said and done! 

[drbob]

Hi Palehorse,...

"I have to say I am more than a little concerned that this is going to decline into a spending free for all before it is all said and done!"

Yes... I do hope it does not become a spending frenzy... but it is something to watch.. 

[Sandy Eggo]

I have suggested some things to look for and as the process moves forward, let's take a few minutes to let our elected representatives know how we feel about what they are doing.   

This is key. This is such an import part of the process and I really don't think that a majority of Americans take the opportunity to do this. I'm guilty in a large part, but this is exactly what we should do. So many spend so much time complaining, but they're complaining to the wrong people.

[drbob]

Good point Sandy.  Today, we have the easiest means of reaching our legislators as we every have had.  email. 

[Palehorse]

Good point Sandy.  Today, we have the easiest means of reaching our legislators as we every have had.  email. 

Somehow I really doubt that any of them actually read it though. They have flunkies go through their public email and cherry pick those that may gain them political capital as being related to the hot topic of the moment; rarely if ever addressing a true problem of a constituent unless they also happen to be a major contributor. . .

[drbob]

Hi Palehorse,

Yes, right!!  You raise a great point.  The whole issue of getting the big money out of politics.  I'm for really strict limits on campaign donations, but I know all the fuss that raises.