Florida Catholic | Editorial

No free lunch

Published: 02.08.08

Will the economic stimulus package recently proposed by President Bush and expected to be passed by our elected representatives help or hurt in the long run? Some economists note that the last time the government tried to stimulate the economy with tax rebates (which were, in fact, advances on the next year’s tax refunds), it didn’t work anyway. Most low-income consumers used it to pay off debt; those in the middle class put it in savings for college or something else. Under the current plan, those in higher income brackets won’t get a rebate anyway.

How much sense does it make anyway to think that the stimulus plan will invigorate the economy now, when it’s needed, if the rebate checks will not be mailed to those who qualify for them until May or June? This delay is needed so the Internal Revenue Service, which has to process the payments, can finish with the tax-season rush first.

Several groups caution against counting on the stimulus package to help. Especially, many faith-based and social justice groups note that this may have negative impact on the poor, even as it purports to help them most.

Already, we see some impact.

The president has presented his budget for the next fiscal year with a $400 million deficit and a freeze on spending on health care and other social services. There is a proposed decrease of $178 million in Medicare and Medicaid spending.

Is it a coincidence that the stimulus package will cost $150 million and the health spending cuts amount to a little more than that? The money has to come from somewhere. As the saying goes, “There’s no such thing as a free lunch.”

The same goes for the property tax cut recently approved by Florida voters. The new cuts may spur home sales, but real estate experts predict that effect will be modest, and may not be immediate. The subprime mortgage mess isn’t fixed yet. And it remains to be seen whether the property tax cuts will dramatically affect local municipal services.

These services may have become bloated as local public coffers swelled when home values rose precipitously, but for the state to cut taxes that mostly affect the local level still seems a bit out of kilter.

We are all interconnected in this state and national — and increasingly global — economy.

Look at how the strength of the Euro against the dollar affects tourism in Florida.

More Europeans will come to the United States to visit and shop if their Euros buy more here. While that helps us, it puts us at a disadvantage when we travel to Europe.

Even Canada, whose dollar has been traditionally lower against the dollar, is now at parity.

Few people will dare to mention the word recession at this point, but if a recession comes or is already here, the poor will feel the crunch first; they are feeling it already.

Father Larry Snyder, executive director of Catholic Charities USA, said after the State of the Union address, “Beyond the economic stimulus package, there must be a national commitment to not only help those impacted by this recent economic situation, but also to provide long-term solutions for people who have been living in poverty.”

We’re all in this together. Remember when you get your stimulus package check a few months from now, it might buy a new TV, but think how much good it would do for an organization that helps the poor.

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