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Economic Stimulus Plan ‘Not Enough to Make Real Difference’ |
The economic stimulus plan announced today by House leaders and the Bush administration falls far short of reaching the people who need help the most and the quickest—and is weighted far too heavily with business tax breaks.
While the package does extend tax rebates to lower-income workers and families, something the Bush administration initially opposed, it ignores two of the most important and effective methods to provide a quick economic boost—extension of unemployment insurance (UI) benefits and increased food stamp benefits. AFL-CIO President John Sweeney says:
The latest economic stimulus proposal simply is not enough to make a real difference for America’s working families. It is up to the Senate to extend unemployment benefits and increase food stamps to get money into the hands of those who will spend it quickest and need it most.
Every month, about 200,000 jobless workers exhaust their unemployment benefits. Economists across the political spectrum agree the most cost-effective stimulus is boosting and extending UI benefits and food stamps. Doing so would provide direct help for workers and families hardest hit by the economic downturn. Says Sweeney:
As the economy weakens, the number of people without jobs will only increase, and the number of unemployed workers running out of state benefits will increase, leaving too many families with nowhere to turn.
Robert Greenstein, executive director of the Center on Budget and Policy Priorities (CBPP), says the Congressional Budget Office (CBO) reports UI and food stamp expansions deliver “the biggest bang for the buck.”
Of all tax and spending stimulus options that CBO examined, the only two that it found would have a large “bang-for-the-buck” as effective stimulus and act fast to boost the economy are the unemployment insurance and food stamp provisions. Both could start injecting more consumer purchasing power into the economy within one to two months.
Lawrence Mishel, president of the Economic Policy Institute (EPI), says it’s “scandalous” that the stimulus package directs some $50 billion to business “incentives.”
This deal gets it half right by providing broad-based payments to individual workers and for children, with the administration backing off its ineffective, inequitable approach. It is scandalous, however, to throw about $50 billion at businesses for investments that have already been made. It is common sense and established economics that businesses invest and hire when they have customers—not when they get tax subsidies for equipment to make things they can’t sell.
The AFL-CIO has proposed a five-point stimulus package that also calls for fiscal relief for local and state governments. Because many state tax codes are linked directly to federal tax rates, economists warn the business tax cuts could lead to a reduction in state revenues resulting in economically depressing budget cuts and tax increases by state governments. Today’s congressional plan ignores state relief. As Greenstein says:
As a result, many states will have to enact deeper and more painful budget cuts, likely hitting areas from health care and education to aid to local governments. Those state budget cuts will also act as a drag on the economy.
It is up to the Senate, says Sweeney, to fill the holes in the House proposal:
In addition to extending unemployment benefits and increasing food stamps, we call on the Senate to include fiscal relief to help the states avoid the recessionary effect of budget cuts and tax increases. And we call on the Senate to include an acceleration of ready-to-go construction projects that will put Americans to work making desperately needed repairs to U.S. schools, bridges that have been declared unsafe and sewage-treatment infrastructure.
Sweeney’s full statement on the economic stimulus package is available here.
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A Federal anti recession economic stimulus package should be all about an aggressive energy program to immediately and significantly extend miles per gallon for autos and trucks, commission the production and installation of major renewable energy initiatives, put into immediate production plug-ins and other practical alternative auto power systems and impose strict energy conservation measures. Take bush’s $150 billion tax rebate program and use it for research and development towards making America energy independent; not in 10 years or 15 years, but more like 5. It’s time for Congress to advance meaningful policy for the long term benefit of America and the American people.
Albert Colone
Oneonta, NY 13820
Many tings need to be done. These are my views.
1. Politicians promise making new jobs!!! What good does that do when we let jobs go to other countries? No wonder people are losing their homes when their jobs are going to other countries while some of our politicians become wealthy.
2. Our veterains need better benefits, It seems to me, many benefits are taken away. If our military can put their life on the line so others can enjoy their freedom, we need to take care of these people when they get out of service. Otherwise, one day we may be speaking a foreign language we don’t want to speak.
3. Health Care. I’m in favor of a National Health Care system that all citizens can share in regardless of income. This is because left like it is, health care is making ins. companys, hospitals, medical suppliers, doctors very wealthy while we have people left without healthcare. It’s all about money, not healthcare…..
4. People’s retirement and pension plans should be so secure that even if a company folds up for what ever reason, the pension and retirement benefits will still be there.
5. If we can destroy another country, turn around and rebuild it, Then we can take better care of our people here at home. (USA)
6. We need to be better self-sufficiant, not depend on other countries for oil, energy etc. Solar Panels should be made available to ALL citizens at an affordable price for all. Wind Power, Neculiar Power, what ever it takes to be self-sufficiant. And NOT to let other people get a monopoly on something and gouge our citizens out of their money. Many people with OIL STOCKS don’t want this to happen because they will not make as much money, which means they don’t have the well fair of out country at heart. Do I need to explain further.——Joe Goddard
I was always taught that the solution for working people in a situation of job disappearance is to call for a shorter workweek, with the same takehome pay. If we work 30 hours rather than 40, management would need to hire an extra shift of workers. There’s precedent–recall when our foremothers and –fathers won the 8 hour day, they didn’t take a cut in pay.
This, plus an end to the wars that are sucking the country dry, are what the AFL-CIO should be calling for.
Henry Noble, Seattle
This plan also excludes retired and disabled people who have no other income that what Social Security and Medicare provide. This group includes 50% of retired women according to statistics from NOW.
Jim Cramer was on Fast Money today and he said that he believed that the Feds finally lowered the rates because they knew that some banks were on the verge of collapsing, so it was most likely some desperate phone calls that finally got the Fed’s attention. Cramer also said that if they had lowered the rates last August as economists were asking, the current financial mess wouldn’t be so bad. When working people need help, the Bush gang is deaf, but when big business needs help, the Bush ears perk up just like an ornery old mule…(my apologies to the mule.)
LaRouche Demands That the Fed Raise Interest Rates Immediately
January 25, 2008 (LPAC)–Lyndon LaRouche today called for the Federal Reserve to immediately raise interests rates–to above the rates of the European Central Bank and the Bank of England. LaRouche issued the call in the context of an existential threat to the United States, coming from the accelerating crash of the post-Bretton Woods monetary system and an all out assault on the U.S. coming from European oligarchical circles, led from London.
While the ECB and other European banks are raising interest rates to bring down the United States, through the triggering of a further crash of the U.S. Dollar, and through a massive move of European and European-steered capital into the U.S.A. to literally “buy up” U.S. banks and corporations at fire-sale prices, Bernanke and company at the Fed are playing into the European assault by further weakening the Dollar through their hyperinflationary interest rate cuts.
The raid on the U.S.A., LaRouche explained, is being run out of Europe, particularly out of London, and the only way to defend the vital national security interests of the United States is by raising interest rates, to protect the value of the Dollar. It were best, LaRouche added, to keep U.S. interest rates slightly higher than those of the ECB and the Bank of England. We are under attack, and it is time that some people in Washington woke up to that fact and determined to fight back. This is one measure that will get the Europeans, particularly the British, howling in anger–that their game is up. American patriots with brains, LaRouche concluded, will agree with me that this is what has to be done. I hope to hear other voices joining me in this call, particularly in light of reports that have crossed my desk, that Bernanke and the Federal Open Market Committee (FOMC) plan to further reduce interest rates in a matter of days, when they convene their next formal meeting.
We need a kind of WPA work program like was set up in the 1930’s and every worker should have automatic union membership. There is not a work shortage–there ’s lots of work that needs to be done in our communities, but the corporations will not hire workers to do it if huge profits cannot be rendered. We need money to fund jobs programs and national health care for all. http://www.hilliardbooks.net