Wednesday, January 28, 2009

Closet case

I have the heart of a liberal progressive but the mind of a fiscal conservative. Time to come out of the closet and admit it to one and all.

Caution.  I am not a Republican; not a Democrat either.  As you might have gathered from my earlier post about recent Senate nominees, I am not a big fan of politicians and the political process in 21st century America.  At my cynical worst, I am nodding in agreement with Groucho Marx, who once remarked Politics is the art of looking for trouble, finding it everywhere, diagnosing it incorrectly and applying the wrong remedies.  Ouch!  Well, it’s not quite that bad yet, but there are days……

My thinking places me, ironically, in the camp of many Republican members of the House and Senate, who have expressed strong reservations about provisions of the fiscal stimulus package about to face a vote today in Congress.  Although a long and laborious read, if you have some time, check out  for the gory details of where the money is going. 

 The strong provisions of the bill--providing immediate financial relief to state governments for mandatory entitlement payments and immediate funding of so called ‘shovel-ready’ infrastructure projects—make sense.  But the Christmas tree ornament approach to spreading the wealth across the entire federal bureaucracy gives me pause.  A few examples---$3B for justice assistance grants to fight crime, $2.5B for scientific research, plus $1B for advanced battery manufacturing.  Worthwhile ideas all, I suppose, but shouldn’t we prioritize spending according to the multiplier effect on overall job creation in the economy?

 I’ll take you back to an earlier post of mine regarding solutions to the auto industry crisis (oddly, we’re not reading much about that one nowadays).  Put the money in consumers hands in the form of direct subsidies for new car purchases or other hard goods manufactured in the USA and achieve job growth through private enterprise.

 The issue of tax cuts is where I part company with conservatives and liberals alike.  Although the tax code, especially the payroll tax, needs serious reform, we have seen the effect of over 20 years of underfunding the federal government through strangulation of tax revenues from Republican tax policies.  And a growing income inequality too.  I am opposed to measures right now which put money in peoples pockets to be saved or spent, as they choose.  Consumer spending is the driving force behind our economic prosperity, and we ought to be focusing on ways to subsidize this spending to get people back into stores and showrooms with money in their pockets.

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