Friday, January 30, 2009

A Wiser Way to Spend $819 Billion

(Update: the estimated size of Obama's spending package now is approaching $1 TRILLION.) 

Former Secretary of Labor nominee Linda Chavez has a great idea in her column today:

President Obama wants to stimulate the economy by having the government take $819 billion of our money and decide how to spend it.

Obama and Friends think it should be spent on bailing out badly run banks and car companies, people who bought more house or assumed more credit card debt than they could comfortably afford, and private-sector-rejected alternative energy schemes.

And let's not forget about the mountain of pork in the legislation--from another Florida theme park to, as the Wall Street Journal reported, "$650 million on top of the billions already doled out to pay for digital TV conversion coupons."

Even worthy projects such as building roads will be done far more expensively and slowly than if the money were left in private hands. A City of San Francisco carpenter said, "We build as slowly as we can, and if someone builds faster, we slit his tires."

As Sen. Tom Coburn said Thursday: "80 percent of this bill is spending with money we don't have on things we don't need, that won't stimulate the economy."

Chavez argues that it would be wiser to let the collective wisdom of the American public decide how to spend that $819 billion. How would she do that? Send every American a debit card for $3,000 that had to be spent in the next 18 months.

Not only would that use the collective decision-making power of 300,000,000 people (rather than a relative handful of politicians and government bureaucrats) to identify the wisest beneficiaries of cash, it would enable all those 300,000,000 people rather than the government to choose the way their $3,000 could most improve their lives.

Here's the link to the full column. And here's a link to all of Linda Chavez's syndicated columns.


Dave said...

What would people spend the money on? Cigarettes and lottery tickets.

Anonymous said...

Ms. Chavez’ idea is similar to the Townsend plan that was proposed during the 1930s Depression. The difficulty is ensuring that the Govt. grants actually increase consumer spending and increase the ‘velocity of money’.

If I were given $1000 from the Govt., with the stipulation that I must spend it in 1 month, I might just use the $1000 for normally scheduled purchases of food, clothes, entertainment, etc. If I did that I would effectively have saved the $1000, and not spent anyting beyond my normal spending patterns.


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