The Stimulus - Great American Shakedown

The latest version of the Stimulus (otherwise known as: the American Recover and Reinvestment Act of 2009) is available for download here at the United States Government Printing Office . (This is before the House today). It is suggested that anyone remotely interested in the future of this nation read the 1434 page document (skip the strikeouts); the Stimulus, in current form, reads more like a continuation of current programs and repair and improvements to government institutions (75,000,000 to the Smithsonian) – big spending, bigger government. There is tax relief beginning on page 1082: a temporary increase in the earned income tax credit, disaster relief for Midwestern states in worked into the American Opportunity Tax Credit (increase in Hope) – which, when one reads through the bill, it is apparent that “add-ons” are included in a variety of categories.

The tax credit to middle class families has been bartered down, from a $1000 per family tax cut to a $800 tax cut (amounting to an additional $13 a week), which will stimulate the economy how? The Republicans had a notion that putting money into the pockets of the people might better serve the nation, as consumers push the economy – it is a simple, time-tested method. The Stimulus, as it stands now, in its final version before the House, may take the programs under the Carter administration to new heights, allowing the economic period from 1977-1979 to appear robust! Obviously it is hoped that this “Stimulus” will offer some relief to those who are fueling the government (taxpayers), however, the likelihood is slim - someone has to pay for this - and the most logical choice is the average working class American. Individual tax burdens for this stimulus package can be calculated here: Right.org.

Mass. Gas Tax Increase - Loopy Proposals by Gov. Deval Patrick

Massachusetts “Hope and Change” Governor, Deval Patrick, looking for ways to get out from under an increasing state deficit (includes continuing work on the infamous Big Dig) is suggesting, among other things, a rise in the State Gas Tax. Massachusetts consumers currently pay 23.5 cents per gallon of gas; the additional .27 cent per gallon hike would give residents the distinction of paying the highest state gas taxes in the nation. (There is also a proposed increase in the Federal Gas Tax by the National Surface Transportation Infrastructure Financing Commission.) Support for the increase in the State gas tax is split along party lines, with Democrat Legislators defending the Governor, and Republican legislators defending their constituents.

In an interview on WGBH, Boston (video on site here), Jennifer Nassour, State GOP Party Chairperson, weighed in on the proposed gas tax noting that there were other avenues such as reform promised by the Governor. She went on to point out several areas where the Governor may have reduced spending including not hiring a personal assistant for his wife.

Other proposals being touted by the Governor include: applying the state’s “sin tax” to candy and soda, charging tolls at the borders of Vermont and Connecticut, and a personal favorite: placing a computer chip in inspection stickers which would charge Massachusetts drivers for every mile they drive. (Open road tolling or Electronic Toll Collection). Repeat: every mile driven. Loopy may not be a strong enough word to describe this idea.

It goes without saying, that he exodus of residents from the state, which will cause the Commonwealth to lose two congressional seats, will continue should the Governor continue his tax and spend policy (sound familiar?). Duval Patrick is up for re-election in 2010 and should be cognizant of the fact that the electorate of Massachusetts is not overwhelming Democrat, contrary to popular think, the State’s electorate is overwhelming independent (50 plus percent of the registered voters). History may once again repeat itself, with the Governor being thrown overboard, instead of the tea.

Pork and Stimulus – Mixing Opposing Economic Realities

The Stimulus Bill now in the Senate bears some resemblance to the version passed by the House, except it has increased in taxpayer liability by approximately 65 Billion Dollars – they are still working on it. The bill, which has received weakening support from the American Public, is laden with extra “programs”, otherwise known as “pork”. The final version is expected to be passed today, however, this mixed bag of tax credits (loosely based), infrastructure spending and a hodgepodge of “special state projects”, is putting our grandchildren into debt. There is also some question as to the packages ability to create jobs – There will, no doubt, be jobs created on the federal level, but it is unclear if any jobs will trickle down to the private sector, which remains bogged down in a credit crunch. What to expect? Political fall-out for the party in power should the stimulus fail to work and work fast – regardless of how many times President Obama stresses that it will take years to recover, the reality of a 7.6% jobless rate with no end in sight is making those who are on the receiving end feel a little less confident. What else? No-one knows for sure – there are divergent studies from a variety of economists – it is not an exact science.

The President will speak to the nation this evening in his first press conference, slated for a 7:00 pm Eastern Time slot. in usual partisan style, the press, along with the President are pointing fingers at those pesky Republicans who are finally doing their jobs. The article here at the Austin Statesman is true to form. The problem that the press and the President face is not the Republican Party, rather their constituents who, in the past few weeks, have grown leery of adding billions of dollars to an already over-extended deficit. If, and only, if, the stimulus can be modeled in such a way as to remove all unnecessary programs, will the people fall into line, otherwise, those Republicans who are now supporting the stimulus in its present form will be subject to the same backlash as their Democrat counterparts.