Lovely. As part of the price of propping up our nation's economy, the Dems are going to try and force through another round of "stimulus". Right. Because $500B to save Wall Street isn't enough, and besides, only rich people have money on Wall Street.
This is such bunk. In my new job, I get to do a bit of work on Capitol Hill. I, along with a few other fellows, was driven over to a meeting the other day in one of our corporate cars. Our driver engaged us in a spirited discussion of the economy, which was of course, the big story. At one point, the driver....a man in his 50's....spoke of something someone said as being "good for the 401K".
I almost did a "praise the Lord" in the car....here was a guy, probably making $40-$45K, who understood that what was good for Wall Street was good for him. I think there are a lot of lower middle and middle class workers in this country who have no clue how much of an impact the stock market has on their lives. This guy wasn't one of them. All of those public employees with their TIAA CREF retirement plans? Invested in the market. All those Montgomery County, Maryland pensioners earning nearly 100% of their salary? Coming from the market.
The bottom line here, is that helping to bail out Wall Street IS AN ECONOMIC STIMULUS PACKAGE. It just isn't a check from Uncle Sugar.
Sunday, September 21, 2008
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Keep in mind that these economic stimulus packages (henceforth ESPs) have an IRS overhead cost to them that also comes out of the taxpayers' pockets. For example, IRS sends out first class postage notices explaining the forthcoming ESP. In March of this year, considerably early in the execution of the ESP, the IRS had spent around $103 MILLION, most of which was on postage. They also diverted staff from delinquent tax collection activities to handle the anticipated questions from taxpayers...no, citizens...no, people who wanted to know if they were going to get money, how much and when. The IRS estimated lost collections at around $120 MILLION due to having to adjust staff for the ESP. Keep in mind that these costs were collected prior to at least one more ESP notice being mailed out and the ESP checks themselves being both printed and mailed out. It also did not include an anticipated increase in staff demands to respond to anxious taxp...citiz...people who, as their notices of payment came in, disagreed with the amounts and demanded answers as to why they weren't getting what they thought they would get. I have been unable to find a final accounting but I did find this early GAO report detailing the costs up through March 08. One might assume the costs therein nearly doubled as the checks began to be mailed out. There are those who say $200MILLION is not a lot of money but most of those people work in government inside the beltway. I do neither and I think it is too much to ask taxpayers to pay just to get their money back from the government. But of course, this wasn't just getting money back from the government, because the more you gave the government, the less you got back. No wonder more people aren't upset about the ESP.
Okay, just realized that I failed to include the link to the GAO report I referenced and when searching for it I found a more recent one from June accounting for a more accurate and detailed cost of the ESP: Total Cost to American Taxpayers to send money collected from those who paid taxes to those deemed eligible for a "rebate": $862 MILLION (this does not include the "rebated" amount, just the cost of government employees sending that money to the recipients). And keep in mind that the population of the US is somewhere around 371 million and the number of federal income tax filers (more than payers) is somewhere around 140 million.
http://www.gao.gov/htext/d08916t.html
Great work, Mudge. Thanks for providing an interesting take on this. We often forget how expensive just carrying policy is.
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