Monday, February 9, 2009

The Stimulus Package - What I Wish Obama Would Say

Instead of relying on the same points Obama has been making for weeks now, I wish Obama would do the following (quotes are my attempt to imitate his pattern of speech).

1. Emphasize that this is a global crisis
"You know, this is not just a U.S. crisis. Countries around the world have been pouring money into their own banks with their own TARPS. Did you know that Iceland, the country of Iceland, the entire country!, has gone bankrupt? And, just as we are putting together a financial stimulus package, so are they. In short, there are a lot of people around the world who believe that what we are doing is the right thing to do. And they're putting their money where their opinions are. "

2. Give a brief economic lesson.
"A lot of you are wondering why your tax dollars should be used to bail out rich bankers who made bad decisions. You wonder why, when you've been prudent and have a mortgage you can afford, your tax dollars should be used to help the person who wasn't prudent. And, you know, it isn't fair. But sometimes punishing the bad guy can hurt the good guy even more. If we hadn't stabilized the financial system, and if we don't continue to work to make it healthier, we could have been faced with a situation like that which occurred in the Great Depression. Thousands of banks failed. People lost their life savings. In today's terms, you might not have been able to go to your ATM or write a check on your bank. And it won't help your financial situation any if half the houses on your block or in you neighborhood or city are abandoned. So, yes, it's not fair that your tax dollars have to be used to bail out the bad guys but, in this case, the alternative would be worse.

"Second, there's an economic concept you need to understand. It's called the paradox of thrift and it works this way. Too many of us have gotten too deep in debt over the past decades. And now we've gotten religion. We're buying less and saving more. And, under normal circumstances, that's good. If you've still got a job, you want to save in case you lose it. If you don't have a job, you have to save. But what happens when everybody stops buying and starts saving at the same time? Companies can't sell enough. So they shut down factories and lay off workers. And those workers spend less because they have less to spend. So companies cut back further. It creates what economists call a deflationary spiral. And that is what we fear. There is almost nothing economists fear more because it is hard, really, really, really hard to get out of such a spiral once it gets in motion.

Now, it would be irresponsible for you as individuals in this economic environment to spend money you don't have. And State governments can't help. They have to balance their budgets. In an economic downturn, their tax receipts decrease, so they have to cut services. And that, too, contributes to this deflationary spiral. The only entity that can spend money is the Federal Government. And, yes, it is borrowed money. But it is borrowed money to buy goods and services that American workers create. To generate the demand that will keep businesses from shutting down more factories or laying off more people. And that's what the stimulus package does.

So, finally, that's why I'm asking you to bail out banks and the auto companies and people with bad mortgages, because if we don't do this, all of you who have been careful, have done the right thing, will get hurt, too. As you sometimes tell your children, don't cut off your nose to spite your face."

3. Focus on the three major parts of the stimulus package:
"Now, I know the stimulus package is big. But it needs to be big because we have a big economy and we need to give it a big kick in the pants to get it started.

And it has the three key components it needs. First, it gives tax cuts to working Americans because we know you're hurting. Second, it helps the people who are out of work by increasing the number of weeks of unemployment insurance - because the people who are out of work aren't responsible for the length of this downturn and it is going to be long - and helping them keep their health insurance by helping them pay for COBRA. Third, and most important, it spends money on things we should have been spending money on anyway: roads, bridges, school, information technology, etc.

Is this a perfect bill? No. It would have been if I had written it, of course, but I didn't. We live in a democracy. The Congress has over 500 members, each representing a district or state. And they all want to do what is best for the people they represent. And they should. That's what you hired them to do. So, the bill's a compromise. That's what we do in a democracy. We compromise. There are tax cuts for Conservatives and spending for Liberals. But no earmarks. None.

So does the bill have a perfect mix of tax cuts and spending? Probably not. Will all of the money be spent in the most effective way? Probably not - although we're going to do our darndest to make sure that most of it does do what we expect. Will it work all at once? No. Will we have to do more? Probably. But we are in the worst worldwide economic crisis in our lifetimes. Make no mistake. This is not an ordinary recession. This is a major crisis. And this stimulus package is a down payment, a critical down payment, on turning the economy around. So call, email, write your representatives and Senators and tell them to vote for this bill. It is time we got started on the road to recovery."

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