Economic Stimulus Plan ‘Not Enough to Make Real Difference’

[Omaha Steve]

http://blog.aflcio.org/2008/01/24/economic-stimulus-plan-not-enough-to-make-real-difference/

by Mike Hall, Jan 24, 2008

The economic stimulus plan announced today by House leaders and the Bush administration falls far short of reaching the people who need help the most and the quickest—and is weighted far too heavily with business tax breaks.


While the package does extend tax rebates to lower-income workers and families, something the Bush administration initially opposed, it ignores two of the most important and effective methods to provide a quick economic boost—extension of unemployment insurance (UI) benefits and increased food stamp benefits. AFL-CIO President John Sweeney says:

The latest economic stimulus proposal simply is not enough to make a real difference for America’s working families. It is up to the Senate to extend unemployment benefits and increase food stamps to get money into the hands of those who will spend it quickest and need it most.

Every month, about 200,000 jobless workers exhaust their unemployment benefits. Economists across the political spectrum agree the most cost-effective stimulus is boosting and extending UI benefits and food stamps. Doing so would provide direct help for workers and families hardest hit by the economic downturn. Says Sweeney:

As the economy weakens, the number of people without jobs will only increase, and the number of unemployed workers running out of state benefits will increase, leaving too many families with nowhere to turn.

Robert Greenstein, executive director of the Center on Budget and Policy Priorities (CBPP), says the Congressional Budget Office (CBO) reports UI and food stamp expansions deliver “the biggest bang for the buck.”

Of all tax and spending stimulus options that CBO examined, the only two that it found would have a large “bang-for-the-buck” as effective stimulus and act fast to boost the economy are the unemployment insurance and food stamp provisions. Both could start injecting more consumer purchasing power into the economy within one to two months.

Lawrence Mishel, president of the Economic Policy Institute (EPI), says it’s “scandalous” that the stimulus package directs some $50 billion to business “incentives.”

This deal gets it half right by providing broad-based payments to individual workers and for children, with the administration backing off its ineffective, inequitable approach. It is scandalous, however, to throw about $50 billion at businesses for investments that have already been made. It is common sense and established economics that businesses invest and hire when they have customers—not when they get tax subsidies for equipment to make things they can’t sell.

FULL story at link.

[FreakinDJ]

1. I have the answer I CAN stimulate the economy

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=389&topic_id=2763413&mesg_id=2763413