The $825 billion stimulus plan proposed by Congress and applauded by Barack Obama should be approved immediately. Despite some noted imperfections — probably too much is dedicated to tax cuts, and even though it is the biggest rescue program in U.S. history it is likely just the beginning of the recovery effort — time is of the essence. If some concessions to Republicans on tax cuts gain speed in delivering jobs and income to American workers, then let it be so!
Most of the stimulus plan proposed by the incoming Obama administration is exactly what is needed, including aid to states, an emphasis on education, including early childhood, and investment in the nation’s infrastructure — the backbone of a productive economy. The United States has allowed its infrastructure to deteriorate to the point that dikes and bridges fail catastrophically, our drinking water suffers, our mass transit systems badly lag the rest of the world, and our broadband connectivity is slower and reaches a smaller share of our citizens than equivalent systems in Korea, Japan and other allies and competitors. The condition of many school buildings — some built in the 19th century — is deplorable and hurts the performance of teachers and students. The money in this rescue package is a small down payment on what is needed to give the U.S. the world-class infrastructure we need.
Immediate job creation is vital
The economy is virtually in freefall. Workers at unemployment agencies report applications at unprecedented levels. Some 15 million Americans are now unemployed or underemployed. The numbers worsen every month, and if state and local governments meet their budget shortfalls by cutting services and laying off employees, the pace of job losses will accelerate. Without immediate and very sizeable intervention, official unemployment could top 10 percent or more this year.
Tax cuts provide the least “bang for the buck” in terms of jobs in the current environment. (Many people used the tax rebate last summer to pay down debt, or put it away as savings. And tax cuts for business work better when the freefall stops and growth resumes). But delaying the passage of immediate job-creating and job-protecting investments will be an even greater sacrifice.
Next urgent steps
Also on the urgent agenda, but not in the initial stimulus plan, is health care reform delivering universal, affordable, quality health care to all Americans. Spokespersons for the Obama team have placed this second, after the stimulus, but ahead of energy, in their list of priorities. Health care investments will contribute immediate jobs and perhaps the greatest long-term social benefit of all.
It should also be noted that saving the U.S. auto industry — even at the current inflated price tag of $40-60 billion — will deliver the biggest “bang for the buck” of all, averting the loss of 3 million more jobs.
Of greater concern than the imperfections of the stimulus plan is the direction — or lack of it — reflected in the management and distribution of TARP bailout funds. The second half of the $750 billion fund to stabilize the financial system has now been given to the Treasury Department, despite widespread popular and congressional skepticism due to serious gaps in the Bush administration’s responses to queries by the congressional oversight panel. A satisfactory accounting of public funds “injected” into AIG, Citigroup, Bank of America and others has not been forthcoming. These same firms have continued their executive bonus and retention payments, and buying other financial corporations.
Let’s be clear: if the financial system is not improved soon, then the leading banks will have to be outright nationalized. Without credit, which the banks are supposed to provide, the stimulus will certainly fail, and the Federal Reserve can do no more lowering of interest rates — they are already at 0.005 percent!
Learn from the gray wolves
Lastly, compromise with the Republicans to get this recovery package passed may come at a price many are no doubt reluctant to pay — it could make holding members of the Bush administration accountable for high crimes of illegal war, torture, abuse of power and unprecedented corruption much more difficult. Many argue that the long-range protection of our democracy from these crimes is the key to the greater empowerment of working people. Unfortunately, our economic and survival requirements are so dire that we may simply not have the time for the trials of Bush, Cheney, Rumsfeld, Wolfowitz, Perle, Kagan and others whom I would be most gratified to see doing the “perp walk.”
It’s time to unite and bind ourselves to the recovery of our economy. The gray wolves combine their efforts to survive. We can too.