Einstein, Economy and Insanity - The effects of the economic Stimulus Act

“Congress and the president recently rolled out a $150 billion economic stimulus package. However it is heralded by politicians, in truth it is unlikely to have any significant effect on the economy. The only significant effect it might have is garnering a few votes come November.” (ERICK S. CREACH (an attorney with Van Matre, Harrison, Volkert, & Hollis.,) Tuesday, February 26, 2008, Columbia Daily Tribune)

Everyone loves free money, so those citizens who opposed the “rebate” were initially discredited as “being ignorant of the problems with the economy” and accused of wanting to keep people from getting “their money.” However, since a month has passed since the signing of the economic stimulus package, let’s examine the effects (or lack thereof) of this stimulus bill.

What was the stimulus package supposed to do? Most people would say that it was supposed to help the lagging economy. However, let’s examine a quote by Economics professor Khan Mohabbat, on March 25, 2008 “Though the stimulus plan was passed by Congress to boost the economy, Mohabbat said any transitory rebate plan will be less successful than a permanent stimulus plan. “It is a nice thing that the administration has done to boost economic activity,” Mohabbat said. “But it is going to have an extremely small positive effect.” (North Star Online)

“Extremely small positive effect.” That’s looking on the optimistic side. But according to attorney Erick S. Creach, this economic stimulus package might wind up doing more harm than good. For example, ‘the government will borrow (likely from foreign investors, thereby creating other more difficult issues such as the dollar’s shrinking power) or print new money. As Albert Einstein is credited with saying, "Insanity is doing the same thing over and over again and expecting a different result."’

Now that we have examined what a couple of experienced professionals think about the bill, let’s examine this bill through the eyes of logic. First of all, let’s look at the feasibly of the bill. Let’s say that someone makes around $6000 dollars a year, and his or her income tax percentage is around 10% (minus the other tax benefits). Tax time comes in April and they pay the government $600 for their income tax. Then, in May, they get $600 back from this economic stimulus package. We have successfully gone in a complete circle.

This is not just a theoretical statement. I will wind up paying the government just about as much as I receive from the rebate, which begs the question, why not just issue a tax credit and save the Government the trouble of playing hot potato with our money? Why, as some economists have suggested, does the government refuse to take care of the problem? Instead of entering into the cycle of insanity of spending money that we don’t have, why not cut taxes permanently and allow the citizens of the United States to keep more of their money? However, such tax cuts require cuts in government spending, a measure many politicians seem unwilling to complete.

A Rotten Way to Pick a President

“Something is seriously wrong with the way we pick our presidential candidates. But experts and pundits, caught up in the horse races, have been slow to point out the obvious -- or have come to accept our badly flawed system as immutable fact.” This quote by Washington post writers Sean Wilentz and Julian E. Zelizer in their article “A Rotten Way to Pick a President” adequately sums up the common sentiment regarding the presidential nomination process. In agreement with the majority of Americans today, Wilentz and Zelizer reach the conclusion that the current selection system is flawed after presenting a brief summary of the failures of the status quo. However, unlike the vast majority of people, Wilentz and Zelizer are willing to offer solutions to the problems that they have identified in their article.

Is the fact that Wilentz and Zelizer have offered some practical solutions to the presidential selection process worthy of high honor and praise? Maybe not, especially when one considers the lack of specifics that these two Princeton Professors provide. Take their solution to the problem with the caucuses, for example. In order to fix the problems of non-secret ballots and limited voting times, these two writers offer only a two word solution “abolishing caucuses.” This incredibly limited solution leaves a question burning on everyone’s minds: “does this mean that we should completely abolish all caucuses?” If this is not the authors’ intent, what do they mean by the statement “abolishing caucuses?” Nevertheless, this phrase might not be suggesting any more complicated than making the ballots secret and extending the voting times and days. The solution can’t be that simple, can it? After all it doesn’t take a couple of PhDs from Princeton to arrive at this conclusion, does it? Or, is it the fact that the American voting public has become so complacently acceptant of a broken system that it takes two people with high powered degrees and jobs just to state the obvious?

This lack of specifics isn’t just limited to the proposed solution for the caucuses. It also extends into the primary problems. The problem with some primaries: a citizen can vote for either or both parties. According to Wilentz and Zelizer, this theoretically allows voters from opposite parties to wreak havoc in the voting system. The Princeton professors’ simple solution: “closing open primaries.” Again, why does it take a professor to state the obvious, given the problems with the system? Aren’t the various political party leaders able to come to this conclusion on their own and fix the problem? Or maybe Wilentz and Zelizer are right and these seemingly obvious solutions are not so obvious. Maybe it takes involvement in the election process to really see the problems and be able to offer meaningful solutions. Once this occurs, ordinary American voters just might be able to offer these solutions and it won’t take a PhD to state the obvious.

Satellite Fuel's Risks Are Disputed

According to the Washington Post, “The Pentagon counted down Wednesday toward a dramatic nighttime effort to shoot down a dying and potentially deadly U.S. spy satellite, using a souped-up missile fired from a ship in the Pacific.” This recent announcement by the Pentagon is the latest development in a story that has spanned the course of several weeks: the fate of a dying US spy satellite. Launched in December 2006, the spy satellite was defective and failed within a few days of orbital deployment. Shortly after the failure of the satellite, officials at NASA realized that it was loosing altitude and would ultimately reenter earth and most likely burn up upon reentry. The problem: the satellite contains 1,000 pounds of unused hydrazine, a toxic rocket fuel. In order to remedy the slight risk of this fuel falling into the United States and causing harm to people, the Bush administration has proposed to shoot down the failed satellite using a modified standard missile 3 (SM-3) in order to destroy the fuel tank and its toxic contents.

Government officials maintain that the only purpose of this mission is to protect the public from the threat of the toxic fuel but many people think otherwise. Others, including Washington Post writers Kaufman and White in their article Satellite Fuel's Risks Are Disputed are now questioning the government’s real intentions regarding the spy satellite. The emergence of such articles brings the Government’s statement under heavy criticism. The government claims to be protecting the people, but according to Massachusetts Institute of Technology research professor Geoffrey Forden, the risks associated with the satellite are exceedingly low. According to Forden, for someone near Los Angeles the risk of injury is one in one billion. However, the government estimates that the risk of someone being struck by lightning is only one in 700,000. With information such as this in mind, one can conclude that the government’s ulterior motives, such as the desire to test this newly developed anti-ballistic missile defense system, are really the main reason behind the decision to down the satellite. However, the Russian defense minister’s conclusion that the United States is planning to test its “anti-missile defence system's capability to destroy other countries' satellites” might still seem far fetched. The conclusion that United States wants to test its new missile system and is looking for a target seems plausible, but only time will tell whether the Russians have indeed uncovered the heart of the matter or if they are exaggerating the issue as usual.

Republicans Join to Block Stimulus Bill

The fate of the economic stimulus plan proposed by President Bush is in jeopardy after Senate Republicans blocked the Senate’s version of the economic stimulus plan. The proposed changes by the Senate would have reduced the tax rebate checks from $600 per person and $1,200 per couple to $500 per person and $1,000 per couple and doubled the income eligibility caps for the rebate checks from $75,000 per person and to $150,000 per person. The Senate proposal would have also extended unemployment benefits for 13 weeks, given $1 billion in heating aid the poor, and it would have included the elderly and disabled veterans for tax rebates.

Now the Senate democrats are faced with the difficult choice to either quickly accept a House bill they deem inadequate or risk being blamed for delaying a measure that both the House and Senate agree is necessary to help the lagging economy.