I'm not so sure that giving money directly to individuals and businesses would accomplish the same thing. First, it is a one-time payment. If an individual doesn't have a job he is still not going to be spending normally. "Give a man a fish and he eats for a day, teach him how to fish and he eats for a lifetime."
Second, at least with infrastructure development we all get something out of it. Better roads and bridges, new schools, more energy efficient public buildings, etc. If you just give people money, there is no telling where that money will ultimately go or who it will benefit. Just look at the $700 billion they gave the banks, AIG, and the auto industry... what good has that done for our economy?
Third, many people would be likely to save the money if it were given to them, or it would go to catch up their delinquent mortgage or credit card debt. If they don't have a secure future, they are going to be frugal. It wouldn't necessarily stimulate new spending that would help with economic recovery. Again, look at the last bailout - the banks got a lot of money and they still aren't lending. If a bunch of people make their payments with the new money, there is no guarantee that it wouldn't just go to the executives and shareholders.
Ultimately, we have to create jobs and make more people financially stable and confident enough to continue to lead normal lives, making normal purchases again.
I do share your concern about the pork. It is probably inevitable that there will be some wasteful spending. But, I think this probably the best plan under the current circumstances. Although I would welcome a moratorium on payroll taxes (believe me, I could use it), it is a temporary fix. I would much rather see the economy rebound and have people buying homes again. I would do much better if our business picked up, rather than get a temprorary tax break.
We will just have to keep our fingers crossed and hope for the best. I'm glad you brought it up... it makes us all think about the big issues that we face and we should be skeptical of another government bailout.
Best,
Robert A. Franco
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