Ben Franklin Report: the Economic Stimulus

In the course of putting together their bipartisan economic stimulus package together, Congressional Democrats are willing to put aside something as small as the rule of law. After all, it wouldn't be prudent to try to bring contempt citations against former White House officials during the middle of negotiations, nonetheless the mountain of lies that led up to the Iraq War.

Bush hasn't outlined his plan, per se, just given a rough outline, namely a "robust" package with a $150 billion price tag. All of the key players in Washington have some version of the stimulus on their wish list, and each has already staked out his or her position on the matter. The Republicans and Democrats in Congress are pondering how to bridge the philosophical divide between individual tax rebates and decreasing business taxes. Lou Dobbs, ever the interested observer, says that the economy is going into a recession and there isn't much that a stimulus could hope to accomplish.

Of course, the presidential candidates of both parties aren't to be left out of the fray, each of them is sticking their pole into a position. We can probably expect to see more of the petty bickering among the Democratic candidates that they've exemplified so far. What they hope to accomplish using the decade-old "No Friends in Politics" mindset that has gotten us so far over the course of Republican control of the Congress. The only candidate who is actively against the stimulus is the one candidate who isn't officially running, Mayor Michael Bloomberg (I-$$$$) of New York City, who sees the giveaway as bad fiscal policy.

Meanwhile, the Congressional Budget Office is seeing the glass as more than half full. Focusing more on the $219 billion dollar deficit that the government has run so far this year, and predicting that the economy won't hit recession levels.

Regardless of how I otherwise disagree with Mayor Bloomberg's politics, I find his position the most reasonable. With another year of phenomenal deficit in the face of countervailing trends, this drop into the general economy will prime the markets for further spending, if the authors of the agreement see their dreams come to fruition. I remain skeptical. With the further aggravation of the deficit, this will further aggravate the U.S. National Debt, and contribute to a worsening macroeconomic situation. On Aug. 9, 2009, by my rough calculations, the clock will turn over to $10 trillion dollars, or roughly the same as our annual GDP, barring additional spending or the unlikely attempt to pay it down.

As another reminder on why not to put off anything, negotiations are over and the stimulus package has been assembled. Unfortunately, workers who earned less than $75K or couples who earned less than $150K, will earn approximately $300 and $1200, respectively. This little drop is hardly likely to inspire the next bubble, unless it's for pharmaceuticals; breweries, wineries, and distilleries; or for local head shops.