Monday, January 28, 2008

Stimulate This!

It isn't often in a predominantly political blog that one can use the words "Bush," "Stimulus," and "Package" all in an article. So what is this Bush stimulus package all about and who is it going to help? The first thing I thought when I heard about the stimulus package was the $300, "thank you for electing me," checks we all got in Bush's first term. I think I signed mine over the Democratic National Committee. This stimulus package is no less political, as the checks will probably arrive sometime in August or September, during convention season. That the economy is becoming an albatross for the Republicans makes the timing something more than a coincidence.

The nature of the package has been pretty well debated--it will go to "taxpayers only"--taxpayers in Republican-speak doesn't include old people, young people, and the working poor. I'll remember that next time someone tries to charge me a sales or excise tax on gasoline, beer, or groceries--"Hey, the Republicans say I am not a taxpayer!" What is interesting is the perverted logic of the highly selective tax rebate. It is supposed to stimulate the economy by putting money in people's pockets. That is a novel idea--I think it was John Maynard Keynes that came up with it--remember the guy whose economic principles were the basis of New Deal liberalism? It always fascinates me when conservatives use liberal economic logic to explain their actions. It makes me realize that many people have no idea the basis of conservative supply-side economic theory and also suggests that Keynesian liberalism seems to remain "common sense" even in in the age of Milton Friedman and Alan Greenspan.

Of course, the economic stimulus package isn't designed to put money in people's pockets--it looks like it is, but it is not. If it were, it would specifically target the working poor and those at the economic margins--it would bring them in to the consuming economy. The target is those who are in the consuming economy so far that they are over their heads. Over their heads in credit card debt, unable to get new credit, and mortgaged to the hilt. Presumably what people will do with the money is pay for last year's big screen TV, Wiii, and RockBand, get caught up on the gas card, pay down that second mortgage, and avoid collections on that root canal. In other words, send the money right back to the institutions which are largely responsible for the mess to begin with--primary lenders, credit companies, and insurance companies. The "bail out" is for the financial hegemons who are starting to get nervous because America is collectively running a large tab and getting later and later on its payments.

No comments: