Sunday, February 8, 2009


I've been asked to try and summarize what has been going on in regards to the stimulus in Congress for those not addicted to C-SPAN...

As you probably know, the U.S. economy is kind of screwed.  Millions laid off, home values dropping, and lending hard to come by.  Everyone is pretty much in agreement over these issues.  Without getting into the insanity that caused it, the big question is how do you fix it?

The answer is some kind of government fuel stimulus to inject money into the economy.  They intend to spend a lot of money quickly to stimulate growth.

The Stimulus plan now being debated in Congress last week is now taking shape, and it's hasn't been a pretty process. The conflict between the Dems and GOP isn't really about "pork" vs "clean" legislation. It is about two conflicting ideologies that are increasingly impossible to reconcile.

To keep in simple, here is the main difference:
The Democrats are in favor of a large spending bill with moderately small tax breaks but large investments in infrastructure and energy efficiency. About 1+ trillion is what it will take to get their plan together.

The Republicans are looking to spend about half that, overall. While they are for investing in some infrastructure, they are more convinced that tax cuts will provide the appropriate stimulus.
As you can see, there are some big differences in the plans offered by the Dems and the GOP. Last week, the two plans collided. The House Democrats offered a plan broadly outlined by the Obama Administration and filled in by the House Democrats.

Meanwhile, the GOP, beaten up in the 2008 election by Bush's runaway spending and the hackneyed implementation of the TARP plan (the $350 Billion tossed at banks last Fall), have decided to renew their commitment to fiscal responsibility, starting, conveniently, just when the new President Obama needs a major amount of money to implement his plan.

Not a dummy, Obama knows that the success of economy will determine if his head ends up on Mount Rushmore or the end of a pike. 

Meanwhile, the GOP realizes that they need to define themselves by opposing whatever Obama wants.  Because if Obama fails, they may regain power in Congress in 2010. If the country collapses before then, well, casualties are inevitable.

So, this lead up to the House vote on the plan that was totally rejected by the GOP, and a possible compromise plan in the Senate that is under attack by lobbyists and the GOP who have no intention of compromise.

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