The Hated Stimulus Bill

There is a lot to dislike about the $787 billion stimulus bill signed by president Obama in February, 2009, but how much do you really know about it?

Did the bill include a $287 billion tax cut for 95% of U.S. taxpayers?

TRUE, 36% of the total cost of the stimulus bill was a tax cut for individuals ($400 each for those earning under $75,000) and families ($800 if filing jointly and income less than $150,000). FACTBOX - Tax details

You can be sure that it also contained pork, but consider this: until we change our system to one more honest, almost every bill will be larded with pork. After George Bush, in 2008, before Obama was elected, was not able to get the TARP bill passed, the stock market dropped by 700 points, showing the seriousness with which Wall Street viewed the possible collapse of at least part of the banking system. So Bush added $150 billion in pork to the bill to get 25 more Republicans and 25 more Democrats to vote for the bill, and it passed.

That $150 billion added another $150 billion to the deficit, but it could have been a tax cut for 95% of Americans, using the same terms as the stimulus bill, of $209 each for individual and $418 for those filing jointly. The Tea Party members did not howl that day, because their banks were being saved, and if it took another $150 billion in pork, it was worth it.

Consider one other number that might give us more perspective: the top 25 hedge fund managers average an income of $1 billion and and that is mostly taxed at 15% capital gains rates. If they were taxed at 1970 rates, as they should be (they used political contributions to buy lower rates), they would pay another $13.7 billion in taxes. That would mean that those 25 individuals would "only" take home $250 million and the same 95% discussed above could get a tax break of $20 (or $40 for couples). It is not much, so maybe you want to keep giving billionaires $20 or $40, or maybe you think that they were damned lucky to take home $250 million, from a nation where the family net worth (average) for the bottom 40% of citizens is less than $2,000.

As Craig Ferguson might say, "What did we learn today?"

Well, we learned that pork is expensive, we all pay for it, and tax cuts are often just taxes delayed. One man's pork is another person's (often your) tax increase or benefit cut. If we always balance the budget, one man's tax cut likely means that someone else gets laid off. Passing bills to save Wall Street millionaires and billionaires was not too painful Bush borrowed the money (added it to the deficit) as he did for the wars in Afghanistan and Iraq, but now is the time we actually start paying, and those who benefited the most, want those who did not benefit at all, to give up their retirement and health care, to sacrifice much of what they have to get the deficit down.