Posted by: Brian Powers | February 9, 2009

Here’s a stimulus plan for Macomb County

There is a fantastic (in my opinion) editorial in today’s Macomb Daily with regards to economic stimulus that could benefit us locally in Macomb County.

Here’s a stimulus plan for Macomb County

Sunday, February 8, 2009 8:27 AM EST

By Chad Selweski, Macomb Daily columnist

As the Capitol Hill battle over stimulus money rages on, it’s pretty clear that neither Republicans nor Democrats have a solid sense of what it will take to revive the economy in Middle America.

The old Beltway mentality has taken hold, and partisan bickering is as prevalent under President Obama as it was under George W. Bush.

But if you cut through all the rhetoric, chop out all the bad ideas and wasteful proposals, I think we could come up with a pretty solid plan to benefit Macomb County.

The plan I envision would focus almost entirely on three things: infrastructure projects, tax cuts and tax credits, and temporary assistance for the unemployed and “underemployed.”

In Macomb County, we face a grim future, with double-digit unemployment until 2011, according to our resident economist, MCC president Jim Jacobs. As bad as things are here, Jacobs warned last week that the economy will take another year to bottom out.

So, we need a stimulus package that is targeted entirely at creating jobs, not “investments” in government, or pet programs that should rightly be taken up during the regular budget process.

Start with infrastructure — highways, bridges, sewers and drains — and triple or quadruple the amount. Lawmakers seem to be content with infrastructure funding that is about 5 percent of the overall plan. But there are plenty of “shovel-ready” projects out there that would spark economic development.

Next, offer a series of targeted tax credits to turn around the housing and auto industries. Those two sectors are where the downturn has hit hardest, especially in Michigan and Macomb County.

Approve the deduction of sales taxes and interest on loans for car purchases. Adopt the “clunker credit” to encourage people to replace old, inefficient vehicles. Give a tax break for those who buy “green” hybrid vehicles.

Those three items should provide the Big Three with a boost.

As for housing, OK the $15,000 credit for those who purchase a home. And, most importantly, embrace the proposal for government-backed loans of 4 percent — 30-year fixed mortgages — for all credit-worthy borrowers.

That GOP housing proposal, with a price tag of perhaps $300 to $500 billion, would dramatically change the mix of the stimulus plan. But even a scaled-down version could save the average homeowner about $400 a month, which would encourage refinancing, reduce foreclosures and stabilize housing prices.

That should boost consumer confidence and encourage spending.

Next, preserve Obama’s middle-class tax cuts and make sure they apply to the working poor. Republicans should be ashamed of their phony claims that the plan is “welfare” because it gives a check to those who don’t pay federal income taxes.

We’re talking about people who work hard and pay federal payroll taxes. Yet, they’re always left out of Washington tax plans.

We’re talking about a growing segment of the Macomb County workforce — cashiers and waitresses and janitors and cooks. They work double shifts, or 60-hour weeks or seven days a week.

These people who struggle to get by, GOP lawmakers should know, already qualify for a check — the Earned Income Tax Credit — an anti-welfare program created by a Republican president (Ford) and significantly expanded by another Republican (Reagan).

As taxpayers watch in frustration as lawmakers in Congress flail about, there’s also plenty of criticism to throw at the Democrats. This bill should be stripped of all the silly spending advocated by the Democratic leadership that is not job-related. No money for Hollywood or honey bees, museums or government offices.

Keep the funds in the bill for those facing long-term unemployment or have settled for a part-time job — food stamps, unemployment benefits and affordable COBRA health insurance. Expand funding for job retraining programs.

Maintain the money for alternative-energy projects and efforts to reduce our dependence on foreign oil. Modernize our crumbling schools.

But get rid of all the watered-down funding for education programs. Ax most of the healthcare spending plans. Forget about propping up state budgets, except for Medicaid costs.

If this mix of taxes and spending was forged in a way that does not exceed $800 billion, which is the amount economists say the nation needs, then we would have a package that works. It would put America back to work.

And Congress would have a bill that lives up to its name — stimulus.

URL: http://www.macombdaily.com/articles/2009/02/08/news/srv0000004653890.prt

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