Having heard various rumors relating to the new stimulus package I want to share my opinion with you folks
Personally think some infrastructure spending is an excellent idea as there are roads and bridges that are long overdo for repairs. I’d rather like to see national health care as well.
That being said a bunch of pork programs aren’t going to create any wealth or distribute it effectively either.
The real key to prosperity is a broad job base and good wages.
People need to make what they use, get a decent chunk of the economic pie for themselves, reduce debt and put away a decent amount in savings.
Between changes in technology and “globalism” we are reaching the point where this is effectively no longer possible with a standard wage system . Not only are the markets we sell into shrinking or stagnate (low birth rates are a bummer) but computers and automation have whacked whole job categories.
A simple example, I drove by a closed Hollywood Video yesterday. It was more or less replaced by a combo of video on demand, downloads (legal and illegal) and Netflix.
The thing is each closed store means a loss of a lot of jobs, say 8 or ,more low wage jobs for college and high school kids, a manager (which can pay a lower middle class wage) and an assistant manager - sometimes more. and that doesn’t even count for jobs shipping, warehousing and manufacturing DVD’s or in the old days VCR tapes.
As technology increases (say DVD’s are replaced by streamed video) even potential jobs are wiped out. Yes there are new jobs created but there are less of them and they are highly specialized. There simple is less work
This impacts almost every single job category.
The real solutions are “work sharing” aka a shorter work week “balanced trade” aka Warren Buffet’s trade certificates, insourcing jobs and screw the “moral hazard” here, direct transfer payments (aka cash)
Worrying that people will save the money and not spend it is foolhardy. Not only do we want more savings but we want less debt. Getting this debt paid off will allow people who’d like to buy a house or a car to feel comfortable taking out a loan. Its also really only benefits China.
Once the debts are knocked down and savings are up, and people have surplus income the economy will recover.
The key is getting people more surplus income,the best way being cut people a check big enough to matter. Not some contemtuous $500, not more money for people with kids but enough money to knock down debts, save a little and be secure enough to spend some.
Pork programs certainly won’t do it. You know as well as I do most of the money won’t be used wisely or in the right places. The nature of politics being what it is, it can’t be.
So it will fail to bring real prosperity.