Let’s continue our discussion of economic fault lines. This week’s topic is government spending. Last year, the economy was infused with a nearly $800 billion stimulus package. This gave help to state and local governments, funded public work projects, and helped troubled industries. Much of that money is due to run out just as state and local governments are nearing the end of their fiscal years and faced with budget-balancing. Lawmakers in several states are considering raising sales tax and property tax, and cutting government programs. At the same time, jobless benefits are starting to run out for some of the long-term unemployed, who are hitting the 99-week maximum. A million unemployed could have their benefits run out by the end of this year. This will not help our economy.
Congress has delayed approving more money to cover Medicaid costs for states. Medicaid, which covers more than 60 million people nationwide, is one of the costliest services states provide. And with the severe recession, more Americans have turned to Medicaid for assistance. State tax revenues were lower last year as well, so deep budget cuts will have to be made. The federal share of Medicaid was increased last year as part of the stimulus program, but this funding will run out at the end of December.
This could mean trouble for the economic recovery. Thousands of state, county and local government workers could be laid off in the name of budget-balancing. More unemployed workers will do nothing to help the economy. Thanks for reading.
On February 17, President Barack Obama signed the $787 billion stimulus package into law. Let's take a look at this package and its potential to lift us out of economic recession.
I'll start by saying don't point the finger at anyone to blame for this mess. It's not George Bush's fault, it's not President Obama's fault, and Alan Greenspan is not to blame. Let's just accept the mess we are in, roll up our sleeves, and get through this! Remember, this is not a political event; it's economic.
Now let's talk about spending. This package is almost 800 billion dollars. Taxes, infrastructure, education and healthcare are the focal points of the package. The spending should create new jobs in all of these areas but it will take some time to implement. Wall Street does not like the package. Wall Street sees this as a declaration of war on prosperity by Washington. Wall Street sees this as another pork barrel for both Republicans and Democrats. Tattoo removal is not a stimulus and blackbird and beekeeping studies will not help a desperate economy.
Jobs are what we need. Tax cuts should give 95% of us more money to spend. I've seen a proposal to eliminate the FICA tax for the remainder of 2009; this would help even more. If we as consumers get it, we need to pay off debt or spend it. Remember, jobs are priority number one.
Let's support the President and the stimulus bills, but let's keep an eye on pork and vote out all purveyors of pork in 2010. Fiscal responsibility is required during these times. Let's start with ourselves and work our way up!