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Wednesday, February 18, 2009

Frederick's "Up and Coming" Democrats

Joe Welty Jr. Bio

Stimulus Vote puts Spotlight on Democrats

There are a large number of topics I could write about for this week's edition of Frederick's "Up and Coming," but what's most on my mind and probably on the minds of most Americans is the stimulus bill. At the time of the writing of this column, the bill is on its way to the President's desk and will have no doubt been signed by the time this is posted.

To begin, it is great that Congress could get this thing passed, though I have some major issues with it. There is no doubt in my mind that a stimulus package is very much needed across the country, but I do not think it will be as effective as most are hoping it will be.

The primary goal of this stimulus package was to save or create 3.5-4 million jobs. I am confident that it has the ability to do so; on this point I believe the stimulus will be effective, but people are going to have to be patient to see results.

The area in which I believe the stimulus will be less successful is in the area of tax cuts. Don't get me wrong, I love a good tax cut for the middle class like every Democrat—that is where a tax cut will do the most good, in the hands of people that are statistically more likely to spend the money directly on consumer goods and services.

The only problem with the tax cuts in this stimulus package is that they are going to fall victim to the economic times and in my opinion be unable to fulfill their purpose. In general, the idea behind giving tax cuts to the middle class is that we are most likely to spend that money on consumer goods and services and thus cause an increase in consumer spending and stimulate the economy.

But, our current economic climate has created a situation where consumer confidence is extremely low. As a result, the majority of people receiving a tax cut check in the mail are more likely to save that money to pay rent or bills, or generally to feel some security; I know that is exactly what I am going to do with mine.

The question then remains: where do we go from here? At this point, now that the stimulus will begin creating jobs, it is most important to focus on the financial and banking industry. The truth of the matter is that the first half of the Troubled Assets Relief Program (TARP) was an absolute waste of money in the truest sense of the meaning—we gave out $350B and have no idea where it went or what it did to shore up the banking and finance markets.

The entire purpose of (TARP) was to remove troubled assets from the market, shore up the finance markets, and to most importantly get the flow of credit and lending restored. Not surprisingly, a bill that had very little accountability exercised saw exactly zero of the intended goals realized.

The money which will be spent on tax cuts through this stimulus package would be better used to remove bad assets from the marketplace and restore the flow of credit in the financial and banking markets. If we're going to call this package a stimulus, then let's actually put the money where it has the best chance to create stimulus; and unfortunately for me, my rent and bills, that means not giving me $400 to save.

Quickly, I'd like to look forward to the mid-term Congressional elections in 2010 and say something about the Democratic Party's Congressional leadership. I'm not going to kid myself into thinking this bill could have been more bipartisan, this bill needed to pass and if the Republicans wanted to try and stand in the way—run'em over to get it passed.

But, an important thing to keep in mind is that President Obama is making real strides to increase the bipartisanship in Washington, something our politics desperately needs.

Though, if Democrats are actually serious about a new era of bipartisanship and governing from the center, while still holding fast to our democratic principles—I'm sorry, but House Speaker Nancy Pelosi (D-Calf.) needs to be shown the door by the House Democrats.

The Stimulus bill easily passed the House with a 246-183 vote. However, no Republican voted for it and seven Democrats voted against passage of the bill.

She has done nothing but antagonize Republicans since she began as Speaker, something that is the right course when Democrats were in the minority. Now that Democrats are once again the majority party we need someone in that position that can exercise restraint. Someone with the political acumen to get legislation passed without leaving Congressional Republicans feeling burned—we need a Speaker more like Thomas P. "Tip" O'Neill than Nancy Pelosi.

If Nancy Pelosi is Speaker much longer, I have serious fears that we will see the Democratic majority severely reduced in the House in 2010; that is if we can keep it at all.


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Anonymous said...

Joe - I also think that Pelosi could simply plant the Dem flag even harder against the Rep Congressmen as obstructionists who don't believe the votes they take - and the party would win even larger majorities - as long as they respond effectively to the economic pain - but like you, I agree that the stimulus is troubled in part - good writing!

Hawkeye said...

While accountability is important, if it were made public which banks received emergency bailout funds under the TARP, a run on those banks would have ensued and they would have collapsed. Secrecy - in this case - was warranted.