A Government indeed that helps its poor in need

Implications: 1.Tax cuts for people in financially good shape. 2. A knee-jerk reaction to limit a possible economic recession.

Analysis:  The goal of a stimulus plan should be to support overall spending so as to avert or limit the depth of a recession. If the money that Government disburses doesn’t get spent i.e. sits in people’s bank accounts or used to pay off debt then the plan has failed in its objective. Bulk of the money appears to go out in the form of tax cuts/rebates to the financially well off to whom the money may not be much and idle in their bank accounts. But on the other hand if the money was disbursed to people in real need, that could have stimulated the economy in the form of consumer spending, alleviate their hardship and would have been a laudable social objective. But in an election year it is the affluent ( read decision makers) who contribute to the coffers of the party.  

A weakening economy, currently being lashed by a sub-prime cyclone and facing a possible recession, is in dire need of a stimulant to rejuvenate and reinvigorate. The usual response – interest rate cuts by the Federal Reserve won’t be sufficient to turn the economy around. What is needed is a fresh bout of free spending to drive an economy currently a prime example of Sir Issac Newton’s first law of motion.  

Unemployment insurance and food stamps, may not seem as glamorous as tax cuts and rebates but then an economy weathering a sub-prime storm and a population losing homes by the day, some money to temporarily alleviate their hardship in their moment of crisis ( a sort of rescue package) should be the social objective of any Government, till a time when the economy is able to generate employment. A Government is of the people, by the people and for the people and not a commercial venture or for a select section of the society. 

The current stimulus package is cosmetic and may at best cause a tiny ripple in the vast economy and in the end the benefits may not be felt and the measure at best short term. More real efforts are needed in the right direction to create an impact and stimulate the economy.