Why Obama's Plan will Prolong the Recession
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The Daily Manumitter
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Why Obama's Plan will Prolong the Recession

Democrats call their bill for economic recovery a stimulus plan. Please note that there is a wide variety of methods that can be used for economic stimulus - but the plan they have created will only prolong the recession. There are 3 reasons and it is pure common sense! Many of the programs do not go into effect until 2010, the majority of the money is spent on things that are not stimulus and only a small percent of what Democrats consider stimulus will make it's way into the economy.

First - much of the plan has projects that do not go into effect until 2010. How will that help the economy now? Well- it doesn't! However- it is just in time for mid term elections....

Second- there is a tremendous amount of money in the bill that is going to things that are not really stimulus - things that do not create jobs.... Example - 335 million for STD prevention, $4.19 billion for "neighborhood stabilization activities, $6 billion to expand broadband Internet access so businesses in rural areas can link up to the global economy, $1 billion for the 2010 Census. How will this really boost the economy? Well- it doesn't!

Lastly - and most importantly- when it comes to government spending programs - only a small percent of the money makes its way to the final destination. For every dollar collected from a taxpayer to go to welfare- only 10 cents gets to the welfare recipient. It is due to the middleman costs involved in the transfer of the money from one person to another. These costs include office rental costs, utility costs, telephone costs, paperwork, mailing costs.... As a result - I will conservatively say that 20 cents on the dollar of spending in the bill will really make it's way as direct stimulus...

As a result - if 20 cents on the dollar goes directly into the economy- which means it is going to take five (5) times as long for the recovery to take place than if tax cuts were used. Please note- there is no middle man for tax cuts! Tax cuts are dollar for dollar directly into the economy and the most effective stimulus for the economy. If tax cuts were involved- I would say it would take 6 months for a good recovery to take place - so multiply that by five (5) and you are looking at 30 months for economic recovery to begin... But that is from the year 2010 - since much of the money is spent on projects in 2010. So look at 2013 for the start of a recovery. The reality - however- is going to put in place other policies to hinder economic growth so it is going to prolong the recession even longer...

The fastest and most efficient way to turn the economy around is tax cuts. It immediately puts money in the hands of consumers and their is no middleman. If Obama (the president with the highest IQ) doesn't understand this - he is either an inexperienced fool, a backward thinking liberal or a partisan caring only for his own parties reelection.

Written by Thomas George

2009 http://www.the-manumitter.com/