RSS
More Feeds












God's Politics

Supporting the Poor Stimulates the Economy

by Adam Taylor 02-11-2009

Sadly, the debate around the economic recovery and stimulus package has often been characterized by the politics of the past rather than the politics of the future.  Ideology too often trumps sound economics and recent experience.  In the fight against poverty, the current recession and economic crisis provides one of those rare moments when targeted efforts to lift up low-income Americans also provide the greatest stimulus to the economy.  Lower-income Americans are most likely to spend money into the economy, which will help to kick-start greater demand for goods and services.  This economic reality seems to have escaped some members of Congress.  I would argue that supporting vulnerable Americans would still be necessary and worthwhile for moral reasons, even if it wasn’t likely to stimulate the economy.  However, this represents one of those rare moments when the moral coincides with the pragmatic and prudent.

It is easy to get lost in the details of a more than $800 billion spending and tax package.  It is also difficult to know who to trust and what to believe in the midst of such a whirlwind of conflicting and often misleading information in the media and political realm.  I have come to trust the analysis and perspective of the Center on Budget and Policy Priorities on matters related to the economy and the budget.  The Center shares our concern and conviction that budgets are moral documents and that the health of our economy is best measured by how the weak and the vulnerable are faring.  The Center’s analysis is also disciplined by sound data and by what will produce results.  The Center’s Chad Stone provides an excellent summary of the economics behind the American Recovery and Reinvestment Act, arguing:

Contrary to what some critics say, the economic recovery package working its way through Congress by and large is focused on the task at hand, which is to provide a needed boost to an economy that is in the midst of a long and deep recession.  Much of the criticism of the package reflects a misunderstanding of how stimulus works and why the measures in the package will be effective as stimulus.  Ironically, these misunderstandings create the danger that Congress may cut back effective stimulative measures and replace them with other measures that would make the package less effective.

While acknowledging that the package isn’t perfect, he makes a compelling case around why it will create jobs, is focused on the task at hand, should emphasize targeted spending rather than tax cuts, and is temporary with little impact on long-term deficits.  The debate reminds me of the warning of Hosea 4:6 that the “people are destroyed for lack of knowledge.”

Adam TaylorAdam Taylor is senior policy director for Sojourners.

Categories: Economics, Poverty
Share or bookmark this post:
  • email
  • Facebook
  • Twitter
  • del.icio.us
  • Digg
  • Google Bookmarks
  • Mixx
  • NewsVine
  • Reddit
  • StumbleUpon
  • Technorati
  • Yahoo! Bookmarks
advertisement


Comment Code of Conduct

I will express myself with civility, courtesy, and respect for every member of the Sojourners online community, especially toward those with whom I disagree—even if I feel disrespected by them. (Romans 12:17-21)

I will express my disagreements with other community members' ideas without insulting, mocking, or slandering them personally. (Matthew 5:22)

I will not exaggerate others' beliefs nor make unfounded prejudicial assumptions based on labels, categories, or stereotypes. I will always extend the benefit of the doubt. (Ephesians 4:29)

I will hold others accountable by clicking "report" on comments that violate these principles, based not on what ideas are expressed but on how they're expressed. (2 Thessalonians 3:13-15)

I understand that comments reported as abusive are reviewed by Sojourners staff and are subject to removal. Repeat offenders will be blocked from making further comments. (Proverbs 18:7)

  • jeffp
    "The debate reminds me of the warning of Hosea 4:6 that the “people are destroyed for lack of knowledge.” This quote from Adam is getting more ironic by the minute. Our representatives are admitting that they have not even read the stimulus bill. Also the Dem. leadership has resisted publishing drafts of the bill for the reps and senators to look at until the last minute. All signs that they fear the bill would not receive the support of the American people. We were promised transparency, instead we get secrecy. If they are this afraid of the American people, what's next? Maybe censorship, hello Censorship Doctrine.
  • jeffp
    I would much prefer the person docking me points would engage me in dialogue.
  • WaveTossed
    "I think you touched on one of the fundamental differences between liberals and conservatives. I don't see taxcuts as a government give away."

    The main problem with the so-called "supply-side " people is that they want to give tax cuts to businesses. But they have a very poor record in supporting tax cuts to individuals, particularly those who need to work for a living.

    I'm also bothered by all the spending that many of the supply-siders have imposed to finance military adventurist missions in foreign countries. Paying for these foreign military interventions plus cutting taxes to businesses -- all while taxing Unemployment benefits and employer-based health premiums and keeping the same high tax rates for middle class people -- will lead to more deficits and disasters.

    I'm not sure where this puts me on the spectrum of "liberals" and "conservatives." Some of us seem to be round pegs being put into square holes.
  • WaveTossed
    "What is offensive to many progressives, and I would count myself in that number, is that while the money was being spent on wars and military actions and tax cuts for the rich, it seemed to be okay to many conservatives. And then once the money is being spent on something like heath insurance for kids (God forbid!) or programs for the poor, the banner of wasteful spending is dusted off."

    What about the idea of giving tax breaks and tax credits to private people and organizations that help people with health care and programs for the poor.

    I've personally had times when I had to deal with government welfare systems. I wouldn't wish them on my worst enemies. When a person has to go in and apply for aid, they are treated all too often in degrading ways, as if they were lowly beggars with their hands out. Even those case workers who strive to be kind and helpful are hemmed in with all sorts of bureaucratic laws that prevent any real help for the poor.

    I voted for Obama because of his views on getting us out of Iraq and because of his stances that opposed discrimination, especially because of sexual orientation. And also because McCain wanted to raise my taxes (he wanted to tax my employer-based health benefits). I do want to give Obama a chance on domestic issues. But if it's more of those horrible bureaucratic programs where people essentially have to come with begging basket in hand: these are the sorts of policies I would oppose, even if Obama supports them.

    When I was in need, I got more compassionate help from private organizations rather than from the government. I want to see policies that would help these private organizations give help, all while maintaining their independence from government bureaucracy. I want them to receive tax breaks and tax credits for giving out this help.
  • squeaky
    I very much agree with what you have said. There isn't an either/or choice between free market and govt, because if one or the other is left to its own devices, either one will sink into corruption. I too would like to see a sustainable economy rise from this mess, especially one that recognizes the resources we use are finite. I'm just not sure what needs to be done to attain that. But then again, our market was not always so dependent on rampant consumerism. I also fear politics will prevent the best changes from being made.

    Thanks for your response.
    ________________________________________
  • Nathan Bedford
    environut:

    Were you equally outraged when George W. Bush spent hundreds of days in Crawford Texas while 4000 of our finest Americans were being killed in Iraq? See below.

    "The presidential vacation-time record holder is the late Ronald Reagan, who tallied 436 days in his two terms. At 418 days, and with 17 months to go in his presidency, Bush is going to beat that easily.

    Even so, this year's August vacation for Bush is a contrast to previous years such as 2005, when he dragged out vacation in Texas to five weeks. That was also the year Bush remained on vacation immediately after Hurricane Katrina hit."
  • ando
    xfree, you must abhor Lincoln. I heard a team of historians talk on PBS tonight about how Lincoln used government as a tool to bring about change. Apparently, they say, libertarians can't stand him for that. Darned if he didn't solve the slavery issue though....
  • Eric77
    Squeaky - Those are some good questions and I don't have perfect answers to them. I'd like to associate myself with what "letjustice" has written on this issue as well.

    As to your question to me, I would say a "correct" (for lack of a better word) economic situation is one that is sustainable. We should ask the question - can we continue to do what we're doing for a long time or will it all have to coming crashing down on us at some point or another? If the answer is that we can't continue then it's not a sustainable economy and we should try to alter things. There is definitely a role for the free market to play here, but there's also a role for non-market forces (social pressure, morality, gov't regulation, etc) to play.

    If it's a choice between a pure free market and total gov't control of the economy, I'll take the free market, but it's never a choice between the two (despite the best efforts of those who like to shout "socialist!" or "worshiper of the free market!" to make it out to be a choice between the two).
  • squeaky
    Thanks, Justice. I appreciate that!
    ________________________________________
  • letjusticerolldown
    My apologies. Some persons refute a critique of something not based on the validity of the critique but based on whether the critique includes a solution. i.e. "Be quiet if you can't solve the problem yourself." I inferred too much from your entirely fair question.
  • squeaky
    I appreciate most of your response, but I am puzzled and disappointed by your opening statement. It seems that somehow me asking that question offended you, and I'm not sure why it would. It was just a question, and I am sincerely interested in what others suggest. That's all. Nothing else intended by my question. Thanks for the rest of your answer, though, and for your otherwise thoughtful response.
    ________________________________________
  • letjusticerolldown
    If invading Iraq is a bad policy, does one have to solve the thousands of years middle-east conflicts before contending that the invasion is wrong??

    First, they aren't even laying out a transparent case with a coherent overview and rationale as to how it works and the outcomes. This is insulting.

    Second, the case I do hear being made does not project this to work and beyond an immediate stimulus effect might be an actual long-term drag on a recovery.

    Third, the 'avoid catastrophe' argument is bogus. I do not mean the catastrophe would be bogus. I mean there has not been a clear delineation of what that is, and how it would happen; and how this package avoids that. Do you recall a much criticized 'rush to war' to prevent Iraq's WMD's from falling into the hands of Osama Bin Laden. They at least stood before the UN and argued a faulty case.

    If we are doing the basics--the rest will follow. So my solution is for me to keep my family debt free. To figure out a way to start a new business delivering a new product, that better meets real needs, more efficiently, and reduces consumption of energy. To shift my consumption habits. To give generously as God enables. To homeschool my girls if the State can't pay for it.

    I would like my government to simply live within its means. If it wanted to, in the same time it took to fight over this stimuls package, it could set the military obligations on fasttrack to a 30% reduction in costs; put social security into a long-term solvent plan; balance the budget; implement a course of action to result in massive financial system reform.

    The way to restore confidence is for everyone to start fulfilling their obligations. We can't ignore basic obligations, destroy confidence, and then buy it back with truckloads of borrowed cash.

    Moral obedience leads to wisdom. Wisdom can then create and apply more complex solutions.
  • Guest
    Thanks Squeaky .
  • squeaky
    Actually--I take your concerns more seriously than I do those who say "get the government out of the free market. the free market will fix everything." You have given concrete examples of your concerns. The former opposition would oppose any government "fix" other than a hands off approach.

    Unfortunately, it is difficult to get past politics into real solutions, and I think Obama is learning that the game of politics in Washington is far more entrenched than he perhaps realized. And it is far easier to attack those outside the party than those who are in his own party. But if that is what he needs to do, then hopefully he will make good on his claim that he is for real change.
  • squeaky
    I suppose I can give you the same question I asked of Letjustice. I'll modify it, though...what does an economy that is "correct" look like? Have we seen it before? If it is all still based on the Free Market, which is presumably based on consumerism, how does it avoid the false booms it has had in the past?
  • squeaky
    OK--you make good points--we have built our economy based on an unsustainable model. But--how can it be rebuilt to one that is not unsustainable? What do you propose?
  • environut
    Its nice that Obama and his Hollywood friends had a party at Ford's theater to celebrate the passage of the spending bill. Its great that at a time when people are losing jobs and wondering how they are going to get by, our president has the intestinal fortitude to celebrate. Its a shame we weren't invited since we paid for their good time. This makes me beyond angry.
  • I think since there is corporate welfare, instead of taxing them more, the welfare part should be abolished. Why have laws that protect/favor one part of society over another? My goal/ideal is to see equality before the law. Loopholes should also be abolished.

    Try Frederic Bastiat's book "The Law." It's not very long and is very concise and poignant to our discussion. Google it and type "PDF" at the end, and you'll find free copies available online in PDF format.
  • PASTOR JEFF
    Doug; Thanks for the link. very cool looking blog site. We have much in common but arrive at different conclusions in some instances. When I referred to your "Options" I was referring to this quote and not your blog's "options"-
    "There are only two economic options. A free market where every person can choose freely the choices laid before him to further his life; or a controlled/centrally-planned economy where those in power control the supply of money, often in opposition to natural supply and demand factors (which is why we're in this mess)."
    The reasons I believe that the rich should be "taxed" more are two-fold. 1-They benefit more from government services. This is especially true in the case of corporations such as Wal-Mart, sometimes referred to as corporate welfare. They also benefit disproportionally from infrastructure. and 2-They are unfairly granted loopholes not equally granted to other tax payers (note: I purposely did not refer to the poor, because I am well aware that they are not relevant to this discussion except that they pay user rather than income taxes)
    They (the rich) can afford to buy them (toxic assets) but will they?
  • Jeff, would love if you could comment directly on the blog, so others can see/respond to your response... and so those here can know what I meant by "Option 1" and such. (www.liveloud.net for the link)
blog comments powered by Disqus
click here for comments tech support
advertise here
  • MOST VIEWED
  • MOST COMMENTED
  • MOST RECENT
advertise here
advertise here
advertise here
advertise here


HOME | SUBSCRIBE | DONATE | TAKE ACTION | MAGAZINE  
SOJOMAIL | BLOGS | MEDIA | EVENTS | RESOURCES | ABOUT US  
Sojourners | 3333 14th Street NW, Suite 200 | Washington, DC 20010  
Phone 202.328.8842 | Fax 202.328.8757 | sojourners@sojo.net  
Unless otherwise noted, all material © Sojourners 2008