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Originally Posted by Beestie
What Steele is probably talking about is productivity.
In order for the economy to right itself, we need an increase in GNP. Put another way, we need the government to buy more stuff so that companies hire more folk to make more stuff. The resulting economic activity has a stimulating effect on the economy.
If, on the other hand, the government hires people to pick up trash, the stimulating effect on the economy per dollar shelled out is substantially less.
That is a major point of contention between the two sides on how to spend the money the government is prepared to spend to best serve the country. Directly to those in need which doesn't provide much of a boost - just delaying recognition of the problem or for the government to assume the role of a mega-consumer buying massive amounts of stuff to make up for the consumption drop off. Consumption via spending is very effective for the economy but only indirectly helpful to the unemployed.
Take your pick or figure out a way to allocate some funds to each idea. But the debate is meaningful and important.
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ummm, giving money to those in need, for example, in the form of food stamps, gives the MOST bang for the buck, according to Moody's and other economists.
The government also contracts work out to private industry, which in the case of the stimulus, that's what most of those jobs would be. The government doesn't actually hire people to build roads or fix infrastructure, they hire corporations to do the work, and the corporations in turn hire people to do the work. Hence, jobs created.
Case in point, Caterpillar annouced recently they were laying off about 40,000 people worldwide. They made a statement yesterday that if the stimulus passed, they would be able to hire back a lot of those people. States are having to lay people off due to severe budget deficits. Money going to states will help stop some of those layoffs. Many republican mayors and governors are in favor of the stimulus.
The Chamber of Commerce is even in favor of the stimulus, and they are hardly a liberal organization. Republicans in Congress are just playing politics and power games, at the expense of the American people.
And tax cuts, according to most economists, is the least likely way to stimulate the economy or create jobs. But the package has a balance of all those things, money for food stamps and medicaid etc (direct spending), money for infrastructure and states (but the state money was cut pretty badly), and tax cuts.