Tuesday, January 27, 2009

Social Justice: Economic Stimulus and Bailout

As the Congress considers President Obama's economic stimulus package, it is distressing, if not surprising, to hear Republican leaders such as Mitch McConnell of Kentucky decry that there is too much going to spending and not enough to tax cuts. Has he, have they, learned nothing? Trickle down doesn't work. Tax cuts for the wealthy don't work to stimulate the economy (though I suppose they are good for the wealthy!) Tax cuts for lower income people, endorsed by the President, are not likely to be enough to get them out of the hole that they are in. The first $350B in "bailout" funds was not spent where it was needed -- to help working people pay or re-negotiate their mortgages, prevent bankruptcy from medical bills, and tide them through being laid off. Rather, it was given to banks and other financial institutions who hoarded it, gave it away to themselves, and paid dividends to shareholders, but didn't loan money to consumers. McConnell and friends are either stupid, crazy or evil. In any case, no matter what they say, it would be a terrible mistake for the President to let them in any way derail the plans to "bail out" the rest of us. The remainder of the financial bailout needs to go to help regular folks stay in their homes. The huge economic stimulus package needs to be passed, and to focus on how regular folks can get jobs, housing, health care, and other necessities. Spend in ways targeted to fix the problems, and tax rebates are not the way to do so.

The "no tax / balanced budget" fixation has led most states, unlike the federal government unable to print money, to be in a desperate situation. Not learning from Joseph in Egypt, who saved some of the crop from the seven years of plenty to tide people through the seven years of drought, they have in most states had two modes: tax cuts in times of plenty and budget cuts in times of shortfall. Now that most of them have the biggest shortfalls ever, the budget cuts will go way past the fat into the muscle and bone stripping the ability of many states to provide the most basic services.

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