Click amount to donate direct to CounterPunch
  • $25
  • $50
  • $100
  • $500
  • $other
  • use PayPal
Support Our Annual Fund Drive! CounterPunch is entirely supported by our readers. Your donations pay for our small staff, tiny office, writers, designers, techies, bandwidth and servers. We don’t owe anything to advertisers, foundations, one-percenters or political parties. You are our only safety net. Please make a tax-deductible donation today.
FacebookTwitterGoogle+RedditEmail

If We Really Want to Stimulate the Economy

by Maud Hurd

If we really want to stimulate our economy, we should put money in the hands of the people most likely to spend it. Economists from Paul Krugman to James K. Galbraith to Joseph Stiglitz agree, but this is exactly what the bill passed by the House of Representatives on last does not do.

Low- and moderate-income Americans are struggling to meet the costs of housing, utilities, health care, child care, transportation, and other necessities. Money that is put in their hands will immediately begin circulating through a variety of sectors of our economy.

At the same time, of course, it will alleviate the suffering of thousands of families trying to cope with poverty. Jobs and wages had not kept pace with the cost of living even when the economy was booming. When the economy slows down, lower income workers are typically the first to be laid off and the last to be rehired, and our current safety net is far from adequate to either help meet families’ needs, or provide counter-cyclical support to a flagging economy.

The idea that additional tax cuts for corporations will spur investment ignores the demand half of the supply-and-demand dynamic. It is horribly misguided as an attempt to stimulate economic activity, and horribly unfair in its focus on assisting those who need it least.

Laid off workers filing for unemployment benefits rose by 8,000 last week to 504,000, the second-highest number in almost a decade. An economic stimulus package should start by strengthening unemployment insurance. Eligibility rules should be reformed in order to reach more than the 39 percent of unemployed workers who currently qualify, to count workers’ most recent earning period in calculating benefits, and to provide extended benefits beyond the initial 26-week period.

During the recession that occurred under the presidency of George H.W. Bush, Congress released $35 billion (in 2001 dollars) in additional unemployment benefits. The Congressional Budget Office has estimated that the House-passed bill would provide only $2.3 billion in supplemental benefits by the end of next September. We need to be providing more relief than last time around, not drastically less.

Housing should also be addressed, because of its importance to economic stability, the inability of so many full-time workers to afford it, and the potential to create thousands of jobs by building affordable housing. Congress should implement a foreclosure/eviction prevention plan and provide $5 billion in immediate funds for the HOME Investment Program to build more affordable housing and create jobs.

In addition, the Bush Administration should stop holding up the release of $300 million in emergency funds that Congress appropriated for the Low-Income Home Energy Assistance Program (LIHEAP), and Congress should provide additional funding for this winter. Congress should also expand Medicaid to provide coverage for unemployed workers.

Critically important, Congress should take a step it was expected to take before the tragedies of Sept. 11, and one that is now needed all the more. It should boost the federal minimum wage from $5.15 per hour to $6.45, and it should make this change effective immediately, rather than phasing it in over three years, as had been proposed. Because the minimum wage is not set to automatically increase with the cost of living, every year in which Congress does not increase it, it effectively decreases. To be worth what it was 30 years ago, the minimum wage would now need to be about $8. Not only can our economy, with its vastly increased productivity, afford to pay $6.45, but with the increases in consumer spending that would result, it can hardly afford not to.

These measures will do more for our entire economy, as well as for the well being of our least well-off and the stability of our low-income neighborhoods than would new tax breaks for corporations and billionaires. If there are tax cuts, these should go to those who did not benefit from the rebates earlier this year. Those rebates and also the child tax credit should be extended to all Americans.

We are in a situation in which concern for our social safety net and a desire to jumpstart the entire economy both demand the same sort of action. The American public understands this and expects its government to act accordingly. CP

Maud Hurd is the national president of ACORN.

More articles by:

2016 Fund Drive
Smart. Fierce. Uncompromised. Support CounterPunch Now!

  • cp-store
  • donate paypal

CounterPunch Magazine

minimag-edit

September 29, 2016
Robert Fisk
The Butcher of Qana: Shimon Peres Was No Peacemaker
James Rose
Politics in the Echo Chamber: How Trump Becomes President
Russell Mokhiber
The Corporate Vice Grip on the Presidential Debates
Daniel Kato
Rethinking the Race over Race: What Clinton Should do Now About ‘Super-Predators’
Peter Certo
Clinton’s Awkward Stumbles on Trade
Fran Shor
Demonizing the Green Party Vote
Rev. William Alberts
Trump’s Road Rage to the White House
Luke O'Brien
Because We Couldn’t Have Sanders, You’ll Get Trump
Michael J. Sainato
How the Payday Loan Industry is Obstructing Reform
Robert Fantina
You Can’t Have War Without Racism
Gregory Barrett
Bad Theater at the United Nations (Starring Kerry, Power, and Obama
James A Haught
The Long, Long Journey to Female Equality
Thomas Knapp
US Military Aid: Thai-ed to Torture
Jack Smith
Must They be Enemies? Russia, Putin and the US
Gilbert Mercier
Clinton vs Trump: Lesser of Two Evils or the Devil You Know
Tom H. Hastings
Manifesting the Worst Old Norms
George Ella Lyon
This Just in From Rancho Politico
September 28, 2016
Eric Draitser
Stop Trump! Stop Clinton!! Stop the Madness (and Let Me Get Off)!
Ted Rall
The Thrilla at Hofstra: How Trump Won the Debate
Robert Fisk
Cliché and Banality at the Debates: Trump and Clinton on the Middle East
Patrick Cockburn
Cracks in the Kingdom: Saudi Arabia Rocked by Financial Strains
Lowell Flanders
Donald Trump, Islamophobia and Immigrants
Shane Burley
Defining the Alt Right and the New American Fascism
Jan Oberg
Ukraine as the Border of NATO Expansion
Ramzy Baroud
Ban Ki-Moon’s Legacy in Palestine: Failure in Words and Deeds
Gareth Porter
How We Could End the Permanent War State
Sam Husseini
Debate Night’s Biggest Lie Was Told by Lester Holt
Laura Carlsen
Ayotzinapa’s Message to the World: Organize!
Binoy Kampmark
The Triumph of Momentum: Re-Electing Jeremy Corbyn
David Macaray
When the Saints Go Marching In
Seth Oelbaum
All Black Lives Will Never Matter for Clinton and Trump
Adam Parsons
Standing in Solidarity for a Humanity Without Borders
Cesar Chelala
The Trump Bubble
September 27, 2016
Louisa Willcox
The Tribal Fight for Nature: From the Grizzly to the Black Snake of the Dakota Pipeline
Paul Street
The Roots are in the System: Charlotte and Beyond
Jeffrey St. Clair
Idiot Winds at Hofstra: Notes on the Not-So-Great Debate
Mark Harris
Clinton, Trump, and the Death of Idealism
Mike Whitney
Putin Ups the Ante: Ceasefire Sabotage Triggers Major Offensive in Aleppo
Anthony DiMaggio
The Debates as Democratic Façade: Voter “Rationality” in American Elections
Binoy Kampmark
Punishing the Punished: the Torments of Chelsea Manning
Paul Buhle
Why “Snowden” is Important (or How Kafka Foresaw the Juggernaut State)
Jack Rasmus
Hillary’s Ghosts
Brian Cloughley
Billions Down the Afghan Drain
Lawrence Davidson
True Believers and the U.S. Election
Matt Peppe
Taking a Knee: Resisting Enforced Patriotism
FacebookTwitterGoogle+RedditEmail
[i]
[i]
[i]
[i]