Column: Stimulus plan needs long-term goals
Matt Zimmerman/Guest Columnist
Issue date: 2/10/09 Section: Opinions
President Barack Obama warned last Thursday if nothing is done about the economy, "Our nation will sink deeper into a crisis that, at some point, we may not be able to reverse." He said the stimulus plan is needed to avoid national catastrophe.
If we assume that Obama is correct in his assessment, that the country is headed for catastrophe, we have to read a bit further into it and admit this is more than a speed bump, that there is something fundamentally wrong with the economy.
Unfortunately, the bill Obama is portraying as a cure-all to an imminently bleak future does little to help.
There is some spending that could positively affect the economy. For instance, $27 billion for highway and bridge construction, $11 billion for a smart energy grid, and a few other similar projects would constitute a fraction of the total cost.
However, also in the bill is $20 billion for food stamps; $100 billion for health care; $100 billion for education; close to $200 billion in tax credits. The list goes on.
None of this is bad; it's just that it has nothing to do with creating a sound economy. It will save few jobs and create even less. It is $800 billion dollars to achieve marginal benefits at best.
People putting money into savings and paying off bills is great, but it isn't a good use for hundreds of billions in deficit spending. Neither is giving them money to waste buying things manufactured in China.
This spending is temporary.
When this money is gone, people will stop saving, paying off bills and buying things. Companies can't count on this shot in the arm. That money was not real. It is impossible to base a business plan around it. If a company is struggling, they will still struggle.
Is Congress going to pass another trillion dollar spending bill to save an economy that is still fundamentally sick?
What is needed from the government is something it has never given the American people: a long-term strategy, serious thought and responsibility.
This means creating a business-friendly environment. Period. People need good, reliable jobs, not a relative pittance in refundable tax credits every couple of years.
This means cutting corporate taxes, which are among the highest in the world, and lowering taxes on the top 5% of wage earners, most of who are small business owners creating a majority of new jobs.
It means cutting capital gains taxes, making it easier to invest. It means fighting the surprisingly Hoover-esque protectionist urge among many on the left. It means addressing the entitlement crisis that absolutely cannot wait any longer.
Today's economy is made up of billions of self-interested actors all over the world. It is unfathomably complex.
Yet, we trust Nancy Pelosi and Harry Reid to apply a bandage to cover up problems that are more serious than what they are willing to deal with.
Matt Zimmerman is a senior political science major. He can be reached at 581-7942 or at DENopinions@gmail.com.
If we assume that Obama is correct in his assessment, that the country is headed for catastrophe, we have to read a bit further into it and admit this is more than a speed bump, that there is something fundamentally wrong with the economy.
Unfortunately, the bill Obama is portraying as a cure-all to an imminently bleak future does little to help.
There is some spending that could positively affect the economy. For instance, $27 billion for highway and bridge construction, $11 billion for a smart energy grid, and a few other similar projects would constitute a fraction of the total cost.
However, also in the bill is $20 billion for food stamps; $100 billion for health care; $100 billion for education; close to $200 billion in tax credits. The list goes on.
None of this is bad; it's just that it has nothing to do with creating a sound economy. It will save few jobs and create even less. It is $800 billion dollars to achieve marginal benefits at best.
People putting money into savings and paying off bills is great, but it isn't a good use for hundreds of billions in deficit spending. Neither is giving them money to waste buying things manufactured in China.
This spending is temporary.
When this money is gone, people will stop saving, paying off bills and buying things. Companies can't count on this shot in the arm. That money was not real. It is impossible to base a business plan around it. If a company is struggling, they will still struggle.
Is Congress going to pass another trillion dollar spending bill to save an economy that is still fundamentally sick?
What is needed from the government is something it has never given the American people: a long-term strategy, serious thought and responsibility.
This means creating a business-friendly environment. Period. People need good, reliable jobs, not a relative pittance in refundable tax credits every couple of years.
This means cutting corporate taxes, which are among the highest in the world, and lowering taxes on the top 5% of wage earners, most of who are small business owners creating a majority of new jobs.
It means cutting capital gains taxes, making it easier to invest. It means fighting the surprisingly Hoover-esque protectionist urge among many on the left. It means addressing the entitlement crisis that absolutely cannot wait any longer.
Today's economy is made up of billions of self-interested actors all over the world. It is unfathomably complex.
Yet, we trust Nancy Pelosi and Harry Reid to apply a bandage to cover up problems that are more serious than what they are willing to deal with.
Matt Zimmerman is a senior political science major. He can be reached at 581-7942 or at DENopinions@gmail.com.
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