The infamous stimulus package, President Obama’s shining beacon on the Hill, negotiated behind closed doors, its turgid pages crackling with pet projects dreamed up by upstanding Democrats, will be sent to the White House. This monstrosity has been created to put Americans back to work. If I understand it correctly, there will be new jobs in the biotechnology, transportation, health, environmental and information technology sectors. While some of these jobs will be private and corporate, I suspect government too will expand and create millions of redundant jobs to prevent a social revolution in America.
Whether the economy can be resuscitated will depend entirely on the quality of the jobs created. If these are jobs where people can only eke out a living, consumers will neither have the confidence nor the temerity to rush out and buy as recklessly as they did in the past. Moreover, hard times have thrown many people deep into debt. Part of the income from the new jobs will be spent paying down credit card debt. Much of it will go into necessities. Families that have spent all their savings to survive will have to build new nest eggs to make big purchases like cars and homes.
Since many of the jobs that have disappeared in this Darwinian economy will not come back, new jobs will require massive retraining of workers. It will take time for workers to retrain and adapt to their changed environments. Businesses and venture capitalists will not bet their money, at least in the short run, on novices at jobs and ideas that may not catch on during a recession.
Though the stimulus package promises huge tax credits for home buyers, there may be no takers except those rash enough to forget the cruel vagaries of the current recession. This is good because what the government gives, it takes away. Not only will the stimulus package turn our tax code into more of a nightmare, those who read the fine print will discover that all government tax subsidies are fleeting phenomena under the Obama administration. Not only must you buy a house within months of passage of the stimulus package to be eligible for the tax credit, you must also refrain from selling your house too soon not to forfeit the credit. Such strictures are reserved for common folks, while the profligate and failed bankers get bailouts without stipulations and expectations.
Our government is on a blind spree. It promises to renovate our bridges, schools, roads and other dilapidated structures. It explains nothing. Who will do this building? Will the unions, who supported Barack Obama, supply the workers for these massive public works projects? Union workers don’t come cheap. Who will oversee the work so that no-bid contractors and hucksters will not edge out honest brokers? Are corrupt and inept states up to the task of disbursing this money efficiently, making sure it is spent on essential repairs, minimizing waste and maximizing transparency for the benefit of the taxpayers?
Any person with common sense can see that this bill is not the result of restraint.
The bill may create jobs for some scientists, software and environmental engineers and builders. But what about the rest? Is Obama’s White House going to rely on the Reagan philosophy of “trickle down” to take care of the others?
Treasury Secretary Timothy Geithner prepares us for his failures by looking grimmer than the economy. He tells us that a government and private sector collaboration will buy up toxic assets from the banks and set them free to lend and negotiate better deals with homeowners on the verge of foreclosure. But what foolish investor would want these toxic assets other than the government? It is unbelievable to me that bankers want a taxpayer-funded bailout for their egregious mistakes so that the taxpayers can be saved!
A gargantuan stimulus package will do nothing short of destroy our two biggest entitlement programs: Medicare and Social Security. When entrepreneurship is at its lowest ebb and when investor cynicism and lack of trust are pervasive sentiments, the stimulus bill is playing out like a farce. Hopefully it won’t turn into a Shakespearean tragedy.
Usha Nellore is a writer living in Bel Air. Reach her at [email protected].
