Do I Stimulate You?

This is typically that time on the campaign trail where actually discussing issues and laying out policy gives way to vague stump speeches and 30 second attack ads. That's ashame really because its turns out there are still issues out there and our government is attempting to take action. This forbes article sums up the state of the economic stimulus package. Meanwhile, while we political wonks were watching the results of Super Tuesday, Wall Street had its worst day in three months losing 370 points.

Does this mean that we are in a recession? Does it matter what we call the current situation? Well it certainly seems so to Congress. Congressional Democrats and President Bush agreed upon a limited short term stimulus package design to get people spending again. The benefits would range from $600 to $1200 per taxpayer depending on income, number of dependents and other factors. Senate Democrats appear to have lost their bid to extend the package to extend unemployment insurance, food stamps and other low-income provisions.

The question is does a stimulus package ever work? Is this a case of short term cash flow problems, or long term economic hardship? I'm no economist, there is certainly commentary that flows both ways on whether a bill like this can help. But I for one think there is a bigger problem here, one that the markets are striving correct. Because indeed, markets work.

Middle class Americans across the country are seeing nearly every cost of living going up exponentially while their wages have remained flat. One interesting fact I learned from the PBS program NOW-if you were to discount the top 1/10 % of earners over the course of the Bush presidency wages actually went down slightly over the course of his administration.

This while the cost of housing, healthcare, energy and college education have soared. I am not one to demonize corporations for doing well. Profit does not come from the pain of others. However, the markets are seeing a decrease in middle class spending. Spending over the last decade has been driven by credit card spending. College has been paid for by astronomical college loans, healthcare costs are crippling small businesses and Americans who would pay for it themselves.

While I applaud the efforts of Congress to ride in and pass a stimulus package to try and revive the economy. I also recognize that an election year is coming up and no member of congress wants an attack running that says while the economy stalled they stood by and did nothing. Rather than rush to put $600 in my pocket, I wish congress could have come together over the last few years to drive down the cost of healthcare, or college, or been working to build alternative energy networks and supplies. We have been looking the other way as the middle class flounders and now we are paying the price.

The next congress needs to address these problems. Not pass stimulus packages.