Crooks and Liars has video of Keith Olbermann talking with Rachel Maddow about the economy and the stimulus package. For a little bit of perspective, Market Watch has an article about the economic stimulus package of 1929. I don’t consider myself a gloom and doom person about the economy in general. I’m certainly not cheering for a crash. However, I do think that the United States has made some policy decisions that are going to come back and bite us.
The first one is not having a balanced budget and a huge, hamstringing debt. This constrains actions the government can take to get us out of recession and the new malaise of the 21st century.
The second one is “The War on Terror” and more specifically, the war in Iraq. The reconstruction of Iraq has to be one of the worst debacles in history. Their economy is wrecked, and it probably won’t get fixed until the United States leaves. Until the United States pulls out, or changes policy towards the country’s reconstruction (which I find even more unlikely), Iraq will continue to be a waste and a money pit.
The third reason is energy policy. Even beyond issues like whether or not the rapid burning of fossil fuels will affect the climate of the planet, the United States continues to be a very energy intensive society. A lot of economic development was put into strip malls, suburbs, etc. These are poised to be the ghost-towns of the new century. Energy is going to get a lot more expensive, not cheaper. This has major repercussions on transport, processing, and manufacture of goods. What it will feel like is stagflation. Cost of living goes up, wages won’t keep pace.
Those are some of the underlying fundamentals. This basic unpreparedness is reflected in the United States’ current account balance of -$747 billion. Personally, I have nothing against a negative current account balance, merely the magnitude and how the money is getting used. There are times when a negative current account balance makes sense. It is indicative of a country that is building versus a country that is saving. However, that is not what we are seeing. The United States is not a country that is borrowing money to make infrastructure improvements. We are a country that is borrowing money to buy that gas-guzzling truck, that extra pair of fancy shoes, or that big screen T.V. In short, luxury items that depreciate in value and have no expected return on investment. We’ve been borrowing money to finance a lifestyle. A lifestyle that it is becoming increasingly clear, we cannot maintain.
Bush’s economic stimulus package is nothing more than an overt act of class warfare. Another crisis to try to cram through another round of tax cuts, the majority of benefits going to the wealthy.
I’m with Rachel Maddow on this, the best way to help out the economy is to spend money on infrastructure. Although, the most useful would be those that help us transition to a greener economy. However, doing so must work within our long-term goals and objectives. As long as we have a massive deficit and ballooning debt, fueled by disastrous wars and borrowed money to support a lifestyle we cannot afford and has no future, we are merely deluding ourselves thinking that any economic stimulus package will help in averting disaster. Doing something, even the right thing, may hurt more than it helps if we don’t fix the big picture also.