To the People

The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or TO THE PEOPLE.

Sunday, January 13, 2008

Clinton's $70BN Plan to Help the Economy

Hillary Clinton has a huge tax-payer funded plan to help the economy as it slides into recession. The problem with it is that it is backed by a belief that the government, and not the private sector, is the cure to what ails us. Amity Shlaes, in her brilliant book The Forgotten Man methodically takes down the myth that FDR saved the country by making much of the workforce government employees and instead argues that FDR slowed recovery by creating government competition to the more efficient private sector.

Enter Clinton. Her plan is to spend $70BN in the following ways:
Her $70 billion plan includes $30 billion for a housing-crisis fund to provide grants to states, cities and community groups. The money would assist families in danger of foreclosure and buy vacant properties to rent to needy families. Another $25 billion would aid low-income families facing increased home-heating costs; $10 billion would supplement unemployment assistance to workers out of jobs for extended periods, and $5 billion would be aimed at promoting energy efficiency while creating "green industry" jobs.
My one by one counters to her plan:

1) Allocating $30BN of taxpayers' money to delinquent mortgage payers is extremely unfair to property owners who are responsible and to renters, who already get screwed in the tax code. Most if not all of the delinquent payers put no money down.

2) $25BN for home heating costs. They are indeed skyrocketing, at least for Americans, as the dollar is in a death spiral. But do we need to subsidize energy costs when we are trying to to go green (see #4)? If you really want oil prices to decrease then tell the Fed to RAISE interest rates and protect the dollar.

3) Unemployment assistance, $10BN: There is no proven relationship between government assistance and employment attainment. There are already Pell Grants for the needy to take classes.

4) Creating "green jobs." $4BN for that. What is that? I can't even criticize this point as it is so vague. Perhaps Clinton could back away from her backing of anti-green Ethanol subsidies and create a bunch of green jobs for farmers who actually grow food that can be eaten.

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