Where the government stimulus money? Where’s the beef? Why hasn't any of the $787 billion stimulus money stemmed the heart-stopping slide in U.S. employment? This plan was all about jobs, creating jobs now and in the long term. The Obama Administration officials pledged to save or create between 3 million and 4 million jobs with the measure. The government's employment figures on July 2 came in much worse that expected. The job losses leaped to 467,000 in June. This is the worst it has been since 1983. With unemployment now at 9.5%. My prediction has been that it may reach 11% before things start to stabilize. Confidence in this stimulus plan has been slipping.
It is now reported that Vice-President Joe Biden will suggest another stimulus plan is possible, with the announcement coming this weekend. This is a big shift from President Obama's position just two weeks ago, saying that more spending isn't yet called for.
Some experts say that the stimulus spending is going about as quickly as expected. The task of dispensing billions of dollars simply takes time. The government contracting rules slow things down a bit and much of federal spending is funneled through the states which can slow things to a crawl. Also, a chunk of the spending was intentionally spread out over several years. There are also other projects that are long-term in nature. Maybe the government should have looked at ways to speed up the process of funneling this stimulus money before they dispensed it. There are many physical, legal and processes of how fast you can spend and funnel the money. Then much of it also gets tied up with state policies and politics.
Right now it looks like legislation has been somewhat slow to unfold. Reports show that about $65 billion of the $420 billion that was in the stimulus package for contract and infrastructure spending has already been spent. About 18,500 specific projects are covered under the legislation, approximately 1,800 of them have had contracts awarded. There are about 5,000 or so out to bid. The funds for many others have been allocated but not spent. It appears that this plan was rushed to attempt to show that the government was doing something. It might have been better to delay the process a few months and do some better upfront planning. Find ways to relax the rules to allow the money to flow more quickly and be funneled in a way to realize more progress.
There is also a better way to stimulate the economy than bailing out so many businesses and banks. The big banks have been taken care of, but many smaller institutions have been allowed to fail. This is also now showing an effect on the economy. It appears that the high profile things were targeted to show that there was progress being made. Much like a big show. A lot of fluff and not enough substance.
To stimulate the economy you need to stimulate the right elements that can give a boost to spending that will create growth. A stimulus that includes a meaningful tax break for the middle to lower income earners would allow more Americans to keep what they earn and allow them to have additional funds to spend and pump back into the economy. This extra spending would allow businesses to start to grow, which in turn would allow for more jobs and less layoffs. An initial stimulus of $800 - $1500 to each taxpayer making under $125,000/year followed by a tax break would give the economy a shot in the arm. The paltry tax break included in the stimulus plan was a slap in the face to the American taxpayer. With the flaws in the way it was set up, many Americans will have to pay back some of the extra they are seeing in heir checks because they are actually getting too much back – this pertains to married couples where both partners are working. Based on what the government has paid out for bailouts, a stimulus with a payment to the taxpayer and a tax break would actually be a cheaper plan. Again my opinion – My Explosion of Thought!
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