Stimulus!

Can someone clearly tell me how big the stimulus bill is? I read the papers, look at the blogs, watch the news, and everyone seems to be reporting a different amount.

And following the anger regarding the original House version, the Senate tried hard to cut it a bit to make it acceptable to a few GOP moderates.

ABC says the House bill was $819 billion. After all that cutting and compromising, the Senate version was cut to $838 billion.

Only in Washington do negotiations to reduce spending increase it.

I am reminded of something I read regarding Winston Churchill's time as First Lord of the Admiralty during the naval arms race before World War I. The Treasury wanted to appropriate four dreadnoughts one year. The Admiralty wanted six. So they compromised on eight.

What Would My Plan Be?

OK -- so I am against this stimulus plan. It seems to me not to be an immediate injection of money into the economy but an appropriations bill, a wish list of projects. To me, it seems this plan will simply be a repeat of the Japanese attempts to overcome their economic downturn of the early 1990s -- with the same lack of results.

But everyone is afraid of doing nothing following the myth of the Great Depression. It seems to me that what caused the Depression is the opposite of what ii happening now. Following the Crash, the Federal Reserve followed a tight money policy, contracting the money supply and letting banks fail. The exact opposite is going on now. The Fed is dropping money from airplanes and doing everything possible to keep banks from failing.

The real problem now seems to be debt -- we have too much of it. And the answer is not more debt. We need to work on getting out of debt.

So what do I propose doing? There needs to be a short term and a long term view.

Short term, things should be focused on helping those who have lost their jobs. So first concentrate on money for medical and unemployment.

Second, we need to do something about debt. Change the bankruptcy laws to allow residential mortgages to be reduced to fair market value in bankruptcy (such a proposal has been made by Senator Durbin). To the extent needed, change laws to ease renegotiation of properties underlying mortgage backed securities.

Third, to the extent needed to get some direct government projects into the mix, pick a number of immediately available infrastructure repair projects. Things already planned but for which money has not yet been appropriated. Limit it to power grid and transportation repairs. The crisis began with the construction industry, so do something on that industry now.

Anyway, those are my ideas. We will instead get a huge appropriations bill.

A Poem in Honor of the Stimulus Bill

SPENDULUS
(With apologies to the immortal memory of Percy Shelley)

I met a banker from a far off land

Who said: Two unfinished and doorless buildings of steel

Stand on K Street. Near them, on the Mall,

Half amended, a shatter'd bill lies, whose prose

And earmarks and grants to ACORN

Tell that its Peolsi drafter well the pork barrel knew

Which yet survive, stamp'd on this drunken government,

The talk radio that mock'd them and bloggers that fed.

And in section 1 this clause appears:

"My name is Spendulus, stimulus of stimuli:

Look on my appropriations, ye taxpayers, and despair!"

Nothing but lawsuits remain: round the Capitol

Of that colossal bill, penniless and bare,

The lone and stupendous deficit stretches far away (to China)

Stimuli!

Or is it stimuluses? I was never very good at Latin.

In any event, the folks at IMAO have the inside scoop on what the package entails.