Friday, January 30, 2009

We, the Money Sheltered Ignorant, Must Stand Up.

Let's face it, most of us, who were sheltered by a certain amount of wealth, were "free market" advocates. Brainwashed, perhaps, however, fully supportive of the idea that interference in the "free market" system is akin to treason, we never asked ourselves, where's the freedom in "free market"?

Or, in what universe are the markets free when a few large corporations completely control the supply and the price of commodities? At least, I didn't. Anyway, if that's the case, why did we the "wealthy enough to be comfortable" worship at the altar of laissez faire?

The simple answer is, as George Orwell put it, "money-sheltered ignorance". That between the illusion of our own sense of security, too much wealth, and 'willful' or 'distracted easily' ignorance of what was really going on; we the "wealthy enough to be comfortable" fell asleep at the wheel. The market was never free.

However, now, that we're in a financial crisis that effects all of us, even those at the top of the pyramid, it's clear that the "free market" did not, does not and will not guarantee economic efficiency or social justice all by itself. Government must interfere in order to avoid inequity and social stratification in the extreme. As President Obama indicated, the size of government matters little...what matters is if government works.

The chance for freedom is here, and it's up to we, the people privileged enough to remain ignorant of the reality of "free market" economics, to transcend any leftover greedy impulses to determine what will really work to stimulate our economy for all of us, rather than just the few.

So, what's the best way to get the most bang for our buck?

Consider this. People who literally live paycheck to paycheck have no choice but to spend every dollar received. Whether it's spent on groceries, gas for their car, or electricity to heat their home, etc., the working poor and lower income America cannot afford to stash their money away. Therefore, this group of people should be targeted to stimulate the economy.

According to Moody's Report:

For every $1 spent on food stamps; $1.73 is generated in economic activity.

For every $1 spent on unemployment; $1.64 is generated in economic activity.

For every $1 spent on infrastructure; $1.40 is generated in economic activity.

For every $1 spent on tax cuts; $103 is generated in economic activity.

For every $1 spent on business incentive tax breaks, for example, "accelerated depreciation" or tax breaks for buying new equipment; $ .33 cents is generated in economic activity.

Not to mention, the greatest way to induce spending is to direct a large part of the stimulus toward the states and other localities because without federal aid, states must cut spending, therefore deepening the recession even further.

Unfortunately, President Obama's reality is that, in order to pass a stimulus package, he must conciliate to those stuck in the old framework. However, the more that we, the people stand up, the less conciliatory the President has to be.

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