Today we have a new economic stimulus plan revealed.
The $150 Billion dollar package consists of:
- $300 to $1200 dollar one time June tax rebate - for anyone who earned at least $3000.00 in W2 type wages. Nothing mentioned about temporary 1099-misc. workers or small business owners who are hit the hardest often in a recession and cannot collect unemployment insurance
- Allows Fannie Mae/Fannie Mac to buy out up to $626,000 dollar mortgages temporarily up for $416,000
- Large businesses can take a 50% additional tax exemption on new capital expenditures
- Small businesses can write off $250,00 in new capital expenditures, versus $112,000 currently
- There is also mention of extending business operating losses previous tax years as a write-off
This is a drop in the bucket.
What about generating jobs? You can't (try as they might) buy someone off with $300 bucks all the while promoting policy that wage represses the middle class and expect any change beyond increases in the federal debt.
That's what is needed, heavy investment in areas that generate production, jobs, economic growth. We have twin deficits and plain too much debt yet instead of looking to generate new industries, jobs to reduce those deficits, we get hand outs to the middle class so they can go shop.
According to this CBO chart on stimulus effectivenesss, Food stamps, extending unemployment benefits are truly needed to improve our social safety net.
For myself, the real issue here is the twin trade and budget deficits, the realignment of the US economy due to our absurd trade policy, unregulated financial markets, private equity, hedge funds and global labor arbitrage agenda simply is not being addressed.