Month: March 2009

As I used to be a Californian, I have opted-in to receive mailings from Senators Feinstein and Boxer, mostly because I find it amusing to see their spin on various political issues. I received an email from Boxer today regarding Porkulon, The Destroyer of Budgets. Here’s some excerpts with my commentary:

About 95 percent of all working families will qualify for the Making Work Pay tax cut.? Working families will receive between a $400 and $800 tax cut, with an estimated 12.5 million Californians eligible for this tax cut.

While I like tax cuts, I have to wonder if this is a good idea. The government is in financial shambles as it is, so wouldn’t cutting tax cuts while spending huge sums of money be a bad idea?

If you receive Social Security benefits, or SSI, you will likely receive a one-time payment of $250.

Do people actually think that giving Social Security recipients a one-time payment of $250 will stimulate the economy? Really, what’s the point? $250 isn’t a lot of money these days.

If you become unemployed, you can receive an additional $100 per month in unemployment insurance benefits, and your benefits will be extended if you remain unemployed.? More than 2,395,000 Californians have lost their jobs in this recession and this extra money will help boost them and our economy with their added purchasing power.

Here I was thinking that the point of unemployment insurance was to ensure that people don’t starve if they’ve been laid off. Using terms like “unemployed” and “purchasing power” in the same paragraph seems a bit…odd.? Personally, if I was collecting unemployment benefits, I’d conserve what I was getting and use it only for essentials.

If you or a family member have become unemployed and you had health insurance, you will receive assistance in continuing your employer-provided health insurance coverage for up to nine months.? The federal government will pay up to 65 percent of your health insurance premiums during this period of unemployment.

I just looked through my copy of the US Constitution, and it mentions no power of the federal government to pay any of my health insurance premiums, let alone 65%.

If your neighborhood has foreclosed and abandoned houses, funds are provided to help local governments buy up and improve homes and make them available to renters or future buyers.

My copy of the Constitution also doesn’t say anything about the federal government helping local governments buy and improve homes (read: give them free money).

If you are in the military, funds are provided to upgrade military medical facilities, housing, and childcare facilities.? Funds are also provided to upgrade veteran medical facilities and to make repairs at veterans facilities.

Ok, that’s at least a legitimate function of the federal government…but I don’t see how it has anything to do with stimulating the economy. It’s probably a good idea, but really shouldn’t be part of this law.

If you are a first-time home buyer, you may be eligible for an $8,000 tax credit toward the purchase of a home.? And if you live in a high-cost area, you will have greater access to low-interest mortgage loans.

A document I got in the mail today says the $8,000 tax credit is actually a sort of bizzaro government loan that you have to pay off over 15 years. WTF? Also, I don’t see how the government has the authority to provide “greater access to low-interest mortage loans”.

If you are concerned about increasing crime in these hard economic times, the bill provides federal funding to hire more police officers through the COPS program.

I don’t see why local police departments should receive even a dime in funding from the feds…isn’t policing an entirely local service? Shouldn’t the local governments be handling this entirely by themselves? If not, then the local governments need to seriously reconsider their budgets or pool resources with other nearby communities. I fail to see how such a provision would stimulate the economy at all.

If you have a health problem, or even if you just regularly visit your doctor, your medical records will be computerized, enabling faster access to medical records and saving billions of dollars in health care costs.

Again, this is not a proper function of government, nor is it stimulating to the economy. If my doctor wishes to computerize records, that should be entirely their choice.

If you travel on America?s roads, freeways, bridges, or transit, you are likely to see improvements, upgrades and modernization including freeway construction, modernization of infrastructure that includes energy savings, and rail and transit construction to reduce traffic and gas consumption.

Granted, this is a legitimate function of the federal government,? it might employ a few thousand to build stuff, and our infrastructure is in need of repair, I don’t think this belongs in this particular law.

These are just examples of the good programs included in this historic legislation.? And while it is just a step in a long road to economic recovery, it is a crucial one.

Wait a second…those are the good parts of the bill? What the hell are the bad ones?
Is there any historical precedent for government stimulus leading to economic recovery?
I’m no economist, but my understanding is that the economy of the last few years (decades, even) has been driven by inexpensive credit, deficit spending by households and government, and people living beyond their means. Add in shady things like “securitized mortgages” and “credit default swaps” and you’re asking for trouble. Even if the “stimulus” were to work exactly as planned, we’d simply be restoring the status quo where people use debt to live beyond their means. Is that a good idea?
I’d much rather that people realize “Hey, spending money I don’t have isn’t sustainable! I should cut my budget, be more responsible with my money, save and invest it intelligently, and live not only within my means, but well within it to be on the safe side.” That goes double for the government. I doubt it’ll happen, though.