Economic Stimulus Package Passed By the House
Yesterday afternoon, the House of Representatives passed an economic stimulus bill. This is Big News. However, not big enough to help the stock market. Instead, the stock market is down today, as the prospect of stimulus spending can’t seem to overcome the poor economic data and the earnings reports. Indeed, Wall Street probably wants more, more, more.
Honestly, this whole thing would be on it’s probably way to recovery (and for a lot less) if instead of bailing out banks, the government had concentrated its resources on bailing out individuals. Give every household a one-off big payment, let the regular folks get their affairs in order, and then watch as the money trickled up to the banks. If you get $50,000, you are more likely to be able to stave off foreclosure than if you try to get the bank to give you a loan modification and you get a $1,000 tax credit over two years.
Anyway, the economic stimulus package still has to make it through the Senate (where more is being added) and then reconciled with the House version. But here’s what we’ve got so far:
- Tax cuts. This was supposed to make the GOP happy. None of them thought the cuts were big enough, so none of them voted for it. Over two years, Americans will get a tax cut of either $500 or $1,000. Additionally, there is a true $7,500 tax credit for first time homebuyers.
- Infrastructure spending. Money for bridges, power grid and roads.
- State aid for local programs.
- Help for education.
- Focus on renewable energy.
There is a lot in here that also can’t really be parsed out into easy categories. Spending for a supercomputer and for STD education is included. Also, it is worth pointing out that even though “bank rescue” isn’t explicitly in there, chances are there will be plenty more money spent to bailout banks down the road. Honestly, this whole economic stimulus thing just keeps getting more expensive — without accomplishing many of its goals.
