What $1T Could Buy

The recently passed “Spendulus” package has left me totally aghast.

I’m pretty (small-L) libertarian, so when I hear of the federal government taking on this kind of authority and power I naturally pucker up pretty tight.

A lot of my friends – Obama supporters from the go – are big supporters of the plan.  They see good intentions everywhere.  Helping the poor with increased Medicaid funding.  Helping the middle class with more tax rebates.  Building roads and bridges.

Motherhood.  Apple pie.  Who can argue with that?

Well, me, for one.  Because it isn’t our money we’re spending.  We’re not paying for this.  We don’t have the money.  Remember?  We’re ass-over-head in debt.  No, it’s a big loan from our children to us.  They’re the ones who’ll be footing the bill for this.  It’s stated to be about $800B.  In my experience, most government spending runs wildly overbudget.  I would expect this to cost $2T.  Maybe more.  For the sake of nice round numbers, I’ll say $1T.

I could dispute the wisdom of borrowing $1T to stimulate the economy by pointing out that it is excessive debt that has caused the economic meltdown.  How do we think that a nation that is overwhelmed by debt – personal, corporate, and governmental – can borrow its way to prosperity?  Isn’t that like trying to drink yourself sober?

Or I could tear the plan apart on the merits of its proposals.  Does it really make sense for the government to spend $8B on Healthcare Information Technology?

Instead, I just want to ask the question: what else could we do with this money we’re borrowing?

Here are a few ideas that just come randomly to mind.

  1. Divide the $1T evenly among the approx. 110M households in the US.  That’s about $9K for each one – enough for the poorest households to pay rent for a year and buy a small used car.
  2. Feeling progressive? Divide the $1T among the poorest 20M households in the US.  That’s a one-time payment of $50K for each one – enough to permanently lift them out of poverty, if spent wisely.
  3. Feeling libertarian?  How about a 50% reduction in all federal personal taxes (income, payroll, etc.) for 2009?
  4. Feeling progressively libertarian?  How about eliminating the 2009 tax for the bottom 95% of taxpayers?
  5. Feeling spontaneous?  How about dropping all of it in $20s from the back of a C-17?

You may think I’m being silly, but I’m not.  Even option #5 has something that the Spendulus package doesn’t have: it puts more money into the hands of the people, and it avoids creating Byzantine federal bureaucracies that waste money and take jobs out of the private sector – bureaucarcies that will cost tens of billions to implement and fund.  Money our children will have to cough up.

Realize that the government is already talking about dropping another $500B – $1T next year for additional “stimulus”.  If we spent it using option 2, that means that the poorest class in our society would all receive a $100K income from the government over the next 24 months.

There are various ways we could have chosen to stimulate the economy.  There’s a reason why the proposal looks like a massive increase in government programs.  It is because its proponents are class of people who think that the government can better allocate our nation’s resources than can the people it governs.

Sound familiar?