Bureau of (be)Labor(ed) Statistics
As you may have noticed, the economy sucks right now. Indeed, the nicest thing that that Obama administration can say is that the rate at which our economy is shedding jobs has plummeted. That, and they create some pretty compelling evidence that this is all Bush’s fault. So thank the gods for the stimulus bill.
As you can see, the biggest single item was tax cuts. Tax cuts are ok, and since Obama campaigned on a platform of giving a tax cut to 95% of Americans, it was nice to see him fulfill one less than a month into the job. Still, the stimulative effect of tax cuts are kind of mixed
One of the other major uses of the money was on unemployment benefits. This was a great use of federal dollars. I don’t just say that because absent my unemployment check I’d have to move back home. In that sense, both my parents and I are very happy. Other people who are happy that I get an unemployment check:
The fine people at Safeway who sell me food every week.
The employees at the coffee shop down the street where I occasionally buy a coffee or breakfast– or both!
The good people at Valve, from whom I buy the occasional video game.
The nice people at PG&E, who gleefully sell me power.
The bastards at AT&T who take my money in exchange for intermittent 3G service.
I could mention Target, Comcast, Petco, and many, many more.
Without the Unemployment Insurance check, I could figure out something. I might have to move in with my parents, borrow money, spend very, very little and hope that the economy picks up soon. And if it were just me, no big deal. But multiply my decreased expenditure by 14.8 million Americans, and the economy will start to look even worse. Valve would shut down*, Target would file for bankruptcy, the coffee shop near my house would have few or no customers, and thus close. Safeway would lay off a bunch of people… Instead of 14.8 million jobless people, we might be looking at 20 million.
The trick to government stimulus is getting money into the hands of people who would spend it– and quickly. It is a real irony that the rational individual response to a recession is to stop spending–while the best government policy is to spend. Good public policy will figure out how to make that happen. The best two things governments have in their tool kits are unemployment insurance and food stamps.
The stimulus package was too small, and contained a lot of things that didn’t do much.** But the heart of it was to put money in the hands of people who needed it– and would be able to keep their friends and neighbors afloat with it. That’s great return on investment.
*thus permanently delaying Episode 3…
** I’m looking at you, cuts to corporate tax rates!