How the stimulus works
First, let’s address the deficit, Social Security, Medicare, Medicaid, welfare, education and other social programs for which many folks want to blame President Obama.
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Dear Mr. Berko:
I’m 62 and have been reading your column for more than 20 years. I enjoy your good advice and your clear explanations of economic events in our Jonesboro paper. My children have asked me to explain why Obama can’t fix our economic problems — especially the high cost of Medicaid, Medicare, welfare and our failing Social Security system. They’ve asked me why he can’t get the deficit under control and spending down to acceptable levels. They’ve also asked me how Obama’s economic stimulus program is supposed to work. Who gets the government money, where does all this money come from, how does it get into the economy, how does it get paid back, who pays the costs, what happens if the money is not paid back and, most important, why is it not working? I can’t answer these questions, so my wife suggested that you could. I, as well as millions of readers, would appreciate your usual short and easy-to-understand explanations of these complex problems. Do we need a new president who can solve problems instead of creating a bigger mess?
R.S., Jonesboro, Ark.
Dear R.S.:
First, let’s address the deficit, Social Security, Medicare, Medicaid, welfare, education and other social programs for which many folks want to blame President Obama. Well, apple sauce, tommyrot and twitterbitter beer in your peanut soup. The White House is an easy target, because most voters are dumber than a bag of hammers and wouldn’t know a snowflake from a cornflake.
Now listen with your brains. The blame for all our country’s financial problems rests squarely with the 535 members of Congress, who wear those God-and-country lapel pins and hair all smoothed over like cake frosting.
Are you familiar with the expression “the president proposes, but Congress disposes”? It’s Congress that determines the size of the deficit and the national debt — not the White House. It’s Congress that determines how much the country spends on Social Security and Medicare — not the White House. It’s Congress that determines our immigration policies, our tax system and banking policies — not the White House. Congress passed the legislation that created our housing crisis, zooming medical and insurance costs, and cars that got 10 miles per gallon — not the White House. So let’s stop blaming the White House for all that ails us and place the blame where it belongs: Congress. Congress is a putrid, festering, ripe boil that homesteads the face of every living American and needs to be lanced.
Now, I’m going to tell you a very simple story about the economic stimulus program that clearly explains how it works, as well as all the caveats.
It’s a slow, agonizing day in the small town of Blue Eye, Ark. The sun is scorching, the streets are dusty and there’s no traffic in the downtown public square. Times are tough, the local economy is bad, businesses and people are in debt, and everybody is living on credit.
On this one particular day, a tall, dark stranger is driving through Blue Eye. He stops on the public square to buy a pair of shoes for $100, and the merchant at the clothing store offers him a “no questions asked” money-back guarantee. The stranger wears his new shoes out of the store and decides to have a relaxing lunch and cold beer at Doobies Feed and Drink. Just as soon as the stranger leaves the clothing store, Elmo the owner grabs the $100 bill and scurries next door to pay his debt to Leroy, who owns the Pick-Quik food market. Then, Leroy rings Earl the mechanic to make certain his shop is open and runs down the block to pay his $100 repair bill. Next, Earl sprints across the street to pay his $100 debt to Sam the lawyer, who grabs that $100 to pay his bar bill at Lum’s. Finally, Lum shuffles back to Elmo’s clothing store to pay his debt for his kid’s school clothes, and Elmo puts the $100 back into his cash drawer. Fifteen minutes later, the tall, dark stranger returns, tells Elmo he doesn’t like the shoes, picks up his $100 bill and without saying goodbye, leaves Blue Eye and drives off into the sunset. That, R.S., is how the economic stimulus program works.
Please address your financial questions to Malcolm Berko, P.O. Box 8303, Largo, Fla. 33775 or e-mail him at mjberko@yahoo.com. © 2010 Creators.Com
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