Thursday, April 09, 2009
WHEN IS A STIMULUS NOT A STIMULUS?
One of my problems with the so called Stimulus Plan is that it has been sold to America as a way to jump start the economy. However, many of the projects included will not result in money spent in the economy any time soon and will not jump start the economy at all. Many of the projects are actually thought of as "infastructure" projects. Certainly, some of these are needed, but they are not economy stimulaters, since they take years to develop.
For example, it has been announced that DFW International Airport received 9 million dollars. The airport is depositing the money in its capital account. It will be spent at some point to update a runway.
This is a prime example. This money could be used for things that will jump start the economy. You could give consumers $9M with instructions to buy electronics, for example. Then, maybe Circuit City would not have gone under. Or, you could tell them to buy cars. Then, maybe GM and Chrysler could have some breathing room.
Instead, this money will go into a bank account. It will earn interest for the airport authority. It will give some bank more money to play with or make bad investments with. (I know the grammer is bad here.) Then, some day, the airport will embark on an arduous task to redo the runway. It will take years to accomplish. Meanwhile the economy will do whatever it is going to do, which I think will happen anyway, by the way.
Remember the Bible story where Jesus said what father, whose child asked for a fish, would give him a stone? I now know the answer.
His name is Obama.