I know. Today's Thurvey question (see last post) is not nearly so sexy as last week's. Last week a good Hallmark or Guidepost response was called for.
But today's Thurvey asks "what is the answer to the economic crisis?" I am about tired of it myself.
My fatigue comes partially from wading through the pages of the American Recovery and Reconstruction Act of 2009. I was hearing so many different things that I thought it would be interesting to go straight to the source. I was wrong. But I think I will continue to study a few pages every day as a Lenten act of sacrifice and repentance. Sort of like self-flagellation.
I was a bit hard on Governor Riley a couple of posts back. He is still, after all, the only Alabama governor who has ever proposed massive tax reform. That was gutsy. He has clarified his position on accepting funds from ARRA, saying that all funds received and disbursed will be closely monitored. A good move as well. I still don't understand his position on not accepting some of the unemployment compensation funds. I hope to find the answer in the ARRA before Easter.
But right or wrong, there is opposition to accepting the ARRA unemployment compensation monies for fear that ultimately, when the federal funds run dry, the State will have to raise unemployment taxes on businesses to fund the expanded benefits and beneficiary pool.
ARRA will raise basic unemployment compensation by twenty five dollars per week, which will be paid out of ARRA funds. That is in addition to the present benefit which is one half of the average pay of the worker, who also paid taxes into the system while he or she was working. The more controversial provisions would increase the number of potential claimants by including workers seeking part-time jobs and those who have chosen to leave their job for a compelling reason based on family need.
I am in favor of being careful about all this spending.
But it does say something about us that we are quibbling about giving tax-paying workers an extra $25 a week for a few months or helping out a worker who can only qualify for part time jobs or paying a mother who had to quit to take care of a terminally ill child when millions of bail-out dollars have been paid to executives of companies who may have had much more to do with our economic woes.
I don't know what the answer is. It may be cookies, or a dog, or me, as some of you have already suggested. Those are all good distractions. But I don't think we can stand by and let large numbers of our people slip into poverty if we can help it. At least until things get better. It may cost some of us some money.
But we are either in this together or we are not.
That's not the answer, but it is the necessary first question.
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I am not an economist, but I read a couple of economist's blogs. I, of course, realize that this is like saying "I'm not a biologist, but I read Nature."
ReplyDeleteNonetheless, I think the best next step is for the Administration to do something to make sure that this kind of thing doesn't happen again, and do A LOT of it. Do 5 or 6 things that are actually necessary--reform assets trading and home loans and fannie and freddie and congressional oversight, and, to use that dirty word, 'nationalize' a bank or two. Then do a whole bunch of things that are almost purely cosmetic--consumer protection stuff, set up a new agency to test toys and food, etc. But do them all at once (as a package) and campaign on it as if this legislation/executive reform package will make sure this will not happen again in our lifetime.
The point being, restore confidence in the system in the eyes of consumers. So far we've been merely stopping the bleeding, doing triage. Now is the time to address the underlying fiscal issues at the core of this crisis.
As far as what I think of the legislation so far, there have been two major pieces of legislation passed in response to the economic crisis. First there was the bail-out, or TARP, and then there's the stimulus.
I don't like the bail-out, though I sympathize with its creators. I understand the banks had too much debt/too little capital to lend. But I feel that the bail-out bill was rushed, and moreso in implementation and execution than in the actual legislative process. The plan-as-legislated was changed almost immediately, and no one was put in place to oversee the money going out (as Congress had demanded) until just recently, after $350 billion was already out the door. It was dirty. And I don't know if it has really accomplished anything.
As far as the stimulus goes, I like it. Probably due to the criticism it got, actually. The political posturing and whining was ridiculous. I especially liked the "it's a spending bill, not a stimulus" bill, which is like saying "it's not a basketball, it's an orange sphere that bounces used to play a game with a basket". Of course it's a spending bill--that's the point, to spend government money and use it to employ people. Now, you can do that by paying people to dig holes and fill them back in again, which is semi-pointless, or you can do it by building roads and bridges and rural broadband, which is good for the future.
And then Michael Steele saying that the government has never created a job. Ugh. Right.
I don't like the massive amount of spending either, but keeping people employed and doing things that benefit this country while our country repairs itself is a worthwhile cause to me.