Big Picture

Why do I get the idea that many members in Congress really do not see the "big picture" in this economic crisis? Maybe it is because my idea of the "big picture" and theirs are entirely different. Let’s review the basic reasons why we are in this mess. A couple of things were happening almost simultaneously. The "housing bubble" finally did break, as almost everyone knew that it would. (Perhaps with the exception of some influential members of Congress) Greedy financial institutions made thousands of bad risk loans that started to fail like a cascade of dominos. The housing market collapsed, as did many financial corporations. Within a period of four months we went from economic prosperity to financial meltdown and who is left holding the bag? It is you and me, right?
The cascade effect of the collapse of the housing market and the financial industry has led to business closures and job layoffs that have thrown our economy into chaos and turmoil. Personal confidence in the economy and in the government is perhaps at an all time low.
To help staunch the flow of economic "blood" 700 billion dollars was earmarked to help the financial industry get back on its feet. We were led to believe the money would ease the credit crisis making it easier for taxpayers to get loans for "big ticket" purchases. How is that working for you? Have you felt positive effects from any of that $750 billion? Has the stock market?
If the government was serious about addressing the root causes of the current economic crisis what else should they have immediately addressed with some serious financial help? It is the housing industry and the creation of jobs, right?
So now Congress is engaged in another battle to somehow stimulate the economy. A "stimulus" package, over 800 billion dollars made its way through the House of Representatives. Remember now that this new financial package was initially labeled as a transportation and infrastructure investment package. Guess how much money was directed at road and highway and infrastructure spending? $90 billion is the figure according to the Committee on Appropriations. It is true that this and other line items could be seen as "job creation." But as you look though the total "stimulus" package less than 25% of the $800 billion could be consider job stimulus. This is stunning. What caused the economic chaos to begin with? How much was devoted to stopping the flow of "blood" in the housing market? None that I could see.
But instead some of the geniuses in the House of Representatives saw this as an opportunity to fund some of their favorite projects. Some, but not many of these projects have intrinsic value and should be addressed. BUT those projects and hundreds of others cannot be construed as economic stimulus no matter how fast some members of Congress talk. It is an outrage. It is absolutely unconscionable that millions of dollars has been earmarked for the purchase of new governmental cars and new furniture for offices. $10 billion has been designated to improve science facilities, $6 billion to provide Internet access for rural areas, $120 billion for educational aid to states, and $54 billion to encourage renewable energy production. Again, some of these are worth financial support but what on earth are they doing in a "stimulus" package?
This "spending" plan, let’s call it what it is, will have little impact on the "big picture" causes of this crisis. If Congress is going to get serious about economic recovery they had better address the root cause of our financial collapse. Rebuilding a strong housing market and the actual creation of jobs is critical. The Congressional Budget Office has said that the job creating plans that do exist in this spending legislation will cost the taxpayer $100,000 to $150,000 per new job that is created. The average income in the U.S. is $42,000. Now how much sense does that make? Surely there has to be better ideas to create new jobs.
One plan to help deal with the housing crisis (remember the big picture) proposed by a couple of Senators that does make sense (which means that it will probably go no where in the Senate) is that a huge part of what could then be called a stimulus is to offer a 4% interest rate for home loans both new and old. On average that would put about $450 dollars a month back into the pockets of homeowners. Now that is a serious stimulus. What do you think?
Did you know that your phone call could be the one that pushes a Senator or Congressman back toward addressing the big picture? We literally cannot afford to let them mess this up. The massive bill for all this spending is going to eventually land in your lap and that of your children and grandchildren. Don’t wait another day. Pick up the phone today.
Lin Goodyear