The much-touted stimulus package that plans to hand more than $500 to $600 to taxpaying Americans is akin to putting a Band-Aid on a severed jugular vein.
The package seems to be designed to bail out corporate organizations by boosting their bottom line rather than help the average American.
The Keynesian package is, at best, a perversion of the ideas that inform it. Instead of encouraging the federal government to increase spending on public utility projects that will create employment - a corollary of which is increased spending - the package intends to hand over checks to taxpayers so they spend it immediately.
This, the policy makers believe, will boost the economy. After all, if you spend the $500 on buying that new TV you have always wanted, it should have some beneficial effect - Wal-Mart may hire more salespeople; the firm that manufactured the TV may hire more technicians to meet the increased demand for television sets, and so on.
But such thinking is problematic. First, considering that products are manufactured in different countries owing to the transnationalization of trade, a spurt in television sales may benefit some other country where the sets are being manufactured. So, increased spending may not result in more jobs for Americans.
The other problem is that the stimulus package intends to hand over money to the corporations, albeit indirectly. Instead of a direct corporate bail-out in the form of business tax cuts that may infuriate the middle class - something no party wants to try as the presidential elections close in - the plan is to split $145 billion among taxpayers, who are going to spend it anyway on consumer goods, pouring back the money into the corporate coffers. This way, the people are not alienated, and the corporations avoid landing in the red.
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While the stimulus package may have short-term beneficial effects, it does not add up toward a long-term solution to build a stronger economy. And matters only go from bad to worse if one considers the U.S.'s skyrocketing military spending.
The Pentagon is expected to unveil a military budget seeking $515.4 billion for 2009, which, according to the New York Times, means that military spending would reach its peak since World War II.
But it should come as no surprise that the economic recession will make no difference when it comes to military spending. The two are largely disconnected in public memory due to the war rhetoric that places security over everything else - even human welfare.
Never mind if you do not have health care - as long as you are protected from "enemies," you have nothing to complain about. The fact that America's consumerism has been left largely untouched by the war also strengthens this disconnect between the recession and the military spending.
One thing that helped America overcome the Great Depression in the '30s was the federal government's spending on development projects that helped shake off the economic stagnation. But welfare-state economics lost favor with economists long ago - much earlier with policy makers - and the stimulus package only reflects this.
