The $150B Christmas Tree

A few weeks back, President Bush and Congress were locked into yet another legislative confrontation. This time it was over finalizing the 2008 federal budget (already 3 months late). The fight centered on the usual what to spend federal dollars on, and who should pay the taxes to support that spending. But it was also on the total size of the spending. Bush’s veto threat was aimed squarely at holding total spending to stay within a specified limit to minimize any resulting deficit.

Fast forward to the end of January, 2008. A light bulb seems to have gone off in the White House (no doubt helped by lobbying assistance from major banks and other corporations) that, golly darn, we could soon have a recession! A recession primarily brought on by self-imposed wounds to the financial industry. Wounds caused by a few years of stupid and predatory mortgage lending to people who clearly could not maintain such mortgages over the long term. Apparently a planned bill to rescue troubled mortgagees that also lets the lending companies off the hook for their mistakes is not enough. Now the entire country has to come to the rescue of inept corporations.

So how do government leaders sell this to us? As is typical, by bribery. Here’s $600, $1200, or some such amount, along with some good old Republican tax breaks. Go out, feel good, and spend your way into economic recovery. And let’s do it to the tune of $150,000,000,000.00!

And where did this $150B magically come from? One month ago we had no money to insure more kids against sickness, no money to invest in our crumbling infrastructure, no new money to support many legitimate opportunities that could make a significant difference in this country’s future. Of course, there was still plenty of unaudited money to support our Iraq misadventure, and the number and amounts of earmarked dollars to special congressional constituents seems to be virtually unchanged. But all that was supposed to be it. All the money that was available. So did Santa Claus decide to make a second round of handling out free gifts?

No, this $150B comes from yet again more borrowing, more debt. It will be underwritten by prosperous foreign countries, the same ones making a financial fortune off of their one-sided sales to us. It is debt that will stagnate and never really be paid back. Yet more debt passed on to our kids, and more limits on future discretionary spending for this country.

Now the detailed questions start to arise on how we should best spend this newly-discovered “pool of wealth.” Republican and Democratic leaders for once are in agreement: send almost everyone a check. Even though everyone agrees that “fast action” is required to stave off this recession, and this approach won’t be felt economically until the end of the year. Conversely, virtually all economists agree that expanding food stamps and unemployment benefits could be effected immediately and have the greatest impact the quickest; but those populations are not significant blocks of voters. I am willing to leave a specific approach to the wisdom of others, but please do not pander to what you obviously consider my apparent stupidity.

Mike Huckabee came out recently with the smartest idea for spending $150B we didn’t know we had. Instead of a 1-time money for folks to buy gasoline from oil companies already flush with incomprehensible profits, invest that short-term money in something tangible that will pay long-term recurring dividends. Investments like a crash rebuilding of our roads or other public benefit projects. Remember FDR’s WPA project in the 1930s? Rather than handing out cash, he hired people to build and create, and to keep them employed. 70 years later, we still have many of the roads, post offices, courthouses, schools, national park facilities to show for this wisdom.

Instead, we are just going to sprinkle play money like fairy dust all around the country to try to numb people into thinking that these government leaders of both political parties are being responsive to the country’s needs. For many of us, this will simply enlarge our cynicism towards this government’s irresponsibility and its inability to think and act with intelligence and substance. It is simply cash as a feel good drug to mask the economic pain. Principles and common sense be dammed. Yet another avoidance of our collective personal responsibility that has hallmarked these last 7 years.