2008 Economic Stimulus Package

For those of you who've been reading this blog for awhile, you're aware that while I may not overtly ask for political consideration, there is an undertone of political concern threading through much of what appears here.  Eating, as it goes, is a political act.  The choice of what you put on your fork has consequences that span the globe and impact not only the planet we live on but the health and welfare of the people with which we share it.

But I'm lately concerned about a political discussion that doesn't have a direct relation to food and agriculture:  the so-called economic stimulus package being debated in Washington.  The story goes that we are on the brink of recession, that markets are failing, and that our national government needs to step in and provide an influx of cash so that individual people are able to bridge the widening gap between have and need.  While the final details are still forthcoming, it sounds like there will be a cash pay-out, to be delivered around May/June, to all eligible, tax-paying Americans, who can then choose to go spend it as rapidly as possible, preferably on flat-panel LCD televisions the better with which to watch the pundits panic further about the country's economic condition.

Economists believe that for any stimulus package to have even the most minute effect the total spend should be somewhere in the range of $75-$250 billion dollars.  The package under consideration comes out to around $150 billion, and what is still being debated is what, if anything, to do related to business, to the most needy of the poor, and all the other potential political hot-buttons that might be included as ear-marks in the final agreement.

Now, before I lay my personal opinion on you, let me give you a couple of caveats to be clear up front about my qualifications to respond:

1. I am not an economist.  While I have some understanding, it is neither my forte nor something I pretend to be heavily schooled in. 
2. I am not immune to the fact that a check, of any amount, will help a great deal of Americans right now.  I don't begrudge you that fact, if you fall into this group, and have a great amount of compassion for our country's working poor.  Finally,
3. As a reminder, I speak as neither a Democrat or a Republican, since I long ago decided that the system itself is what is broken, not either individual party.  I do register to vote in one of the two parties because otherwise I would have no voice in the primary process.  I have voted on both sides of the fence historically, and will likely continue to do so.

What I am, contrary to these disclaimers, is a certified born-and-bred U.S. citizen, so I get to say what I want. 

First, as you have heard if you've been listening closely to the debate about this package, $150 billion dollars is a tiny, tiny blip on the radar of the U.S. economy.  While it may help in the short-term, that short-term is extremely brief.  And as such, this package is primarily about each of the political parties being able to congratulate themselves excessively, a very important asset in a significant election cycle.

Second, as you may have also heard in the debate, what is effectively happening here is that the government is loaning you your own money without interest.  Let's not kid ourselves about where the cash is coming from:  it will be added to the country's deficit, and sometime in the future, whether in a few years or in thirty years, we will have to pay the piper.  So it's either a tax increase in the future to pay down that incremental deficit or it's a valuable program we could have otherwise funded if we didn't have to pay for this legacy program that was never resolved.

Those are the two you've heard about, and I struggle with both of them.  But there's another point that I haven't heard that I want you to consider today, one that I think is even more important. 

Assume for a moment that $150 billion is a foregone conclusion, that one way or another we the people are going to cut checks for this amount and send it out.  With all the ingenuity of the American people, can't we come up with a more long-term focused, beneficial way to blow the wad?  By cutting checks that come out in the late spring, there will be a one-time, short-term influx of cash into the economy.  Companies will benefit, in aggregate, from a little bit of sales they would otherwise not have gotten.  But if the economy is really moving towards recession (because I remind you there are no data points, zero facts, that prove the recession hypothesis is anything but theory at this point), if the economy is troubled, this influx of cash will impact a single quarter, maybe two, and then we're right back on the yellow brick road.

Isn't there a better way?  Isn't it possible to invest the money in a way that we achieve both the one time influx of cash AND a longer-term economic benefit?  I don't mean invest as in stocks and bonds, but rather in our single greatest asset as a nation:  our people.  The money we're talking about, assuming the average U.S. per capita income, would create 2.7 million jobs for one year.  Or almost a million jobs for three years.  Think about the virtuous cycle we would create by both inserting the extra money into our markets, but also using it as an opportunity to train workers to do new jobs.  Then not only do they spend the extra money they've been given, albeit at a slower rate, but they also have a skill after the end of the program they did not have prior, meaning that their contribution to the economy goes on in perpetuity.

What's so sad to me is that this challenge should be so apparent to us:  how do we teach a person to fish, rather than handing her or him a bucket of seafood?  What would our country look like if we took these funds and used them to establish community gardens nation-wide, hired people to cultivate these gardens and paid them a living wage to do so?  At the end of the program, call it a year or three years as you like, look at what they would be able to do, using skills they most likely do not have today.  Think of how we could enable entire communities to be economically resilient and self-sufficient, so that while we, shame on us, irresponsibly spend money we don't have, at least the outcome would be the kick-start to a virtuous cycle, a momentum that would continue-on long past our initial intentions.

This, to me, is another example of our elected officials in Washington being willing to do the work that is expeditious and politically advantageous, rather then getting down to the hard work of building a better future.  Unfortunately I'm unconvinced that any of our current slate of presidential contenders is willing or able to truly make this type of change occur, and it doesn't bode well for the future our our Republic.

Think about it.