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Defenestrator

Why the Stimulus Package Won't Work

The average politician maintains a tenuous grasp on reality, only deigning to view the world with lucid eyes every few years in the all too brief window of time surrounding elections. With legislatures constantly deadlocked and firmly entrenched in a desire to secure reelection through coordinated inaction and meticulous maintenance of the status quo, this disconnection with the tangible is generally an innocuous quirk -- an occupational hazard associated with becoming part of the great ouroboros that is the modern political world. However, when crisis threatens and the piteous cries of Dowd, Brown and Hannity reach past the honeyed whispers of lobbyists and contributors, the reality distortion field endemic to politics can wreak havoc. And sadly, the stimulus package signed into law yesterday, along with the recent recommendations for addressing Minnesota's own budget issues, seem to be victims of this very effect.

There are two economies at work in the modern world. In one, economists caper madly, making Vulcanistic recommendations as to how best to intervene in an economy based on hard numbers, securities and rational behavior. Unfortunately, a world where Cristina Aguilera turns out to be the sane one and Kim Kardashian can rise to stardom is demonstrably irrational. This gives rise to a second economy -- one that requires reassurance and consolation, not to mention tightly targeted spending that provides relief for a middle class currently staining its collective shorts as its biggest assets become fodder for smash and grab out of state real estate speculators. And that's where the political disconnect comes into play. The stimulus package rejects this irrational reality and substitutes its own in the vain hope that the public will take succor in a $400 tax cut and $8,000 tax credit for first time home buyers. Never mind that $400 worth of hookers and blow would go a lot farther in helping consumers forget the dire straights they find themselves in.

What's dangerous is that the reality politicians are ignoring is that more than 70 percent of the economy rests on the frail and effeminate shoulders of the American consumer. And that the most profligate spenders in our economy are those most responsible for driving the country's personal savings rate to zero -- the middle class. While there's plenty of health and unemployment benefits in the bill for the poverty stricken, jobless and destitute, not to mention massive construction projects and incentives for the nation's CEOs, architects and Flatiron Construction, there's little to recommend it to the average schmuck. Even a simple proposal like using Fanny Mae and Freddie Mac to drive mortgage rates down to 4 percent, thus saving homeowners an average of $200/month, was deemed wasteful, despite it putting significant amounts of money in the pockets of strapped middle class consumers and helping prevent further meltdowns in the mortgage securities markets.

Even worse, the same "sans lube" mentality has taken hold in Minnesota's executive branch. While Gov. Pawlenty already recommended slashing corporate tax rates at the expense of the state's reputation for taking care of its most vulnerable populations and hacked away at Minnesota's primary economic engine -- the University of MN system, the recommendations by his panel of business leaders go one step farther, offering recommendations to cut corporate taxes even further and make up for the lost revenue by expanding the sales and cigarette taxes. New York has had significant success raising sin taxes like those on cigarettes, reducing health care costs and other associated expenses, but expanding sales taxes to services and other previously untaxed areas like clothing seems remarkably like malicious and willful idiocy in the face of a growing recession. Forget the children! Think of the Mall of America! Oh god! Won't someone think of the Mall of America!

Of course, the DFL may well be thinking of the Mall of America. They may even have plans to apply the stimulus money in Minnesota to tone the once perky buttocks of our state's economy, as well as balance the budget in a way that doesn't sacrifice the future of Minnesota's middle class. At the moment, however, they're busy preparing to conduct a "fact finding tour" of Minnesota, content to wait until the last possible moment to offer their own proposal for public edification and outrage.

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