Sunday, January 25, 2009

The flaw in stimulus packages

Am I the only one that sees the fundamental flaw in these tax cut stimulus plans? For years now, the Republicans have been doing the same thing that the democrats are now proposing - they base the stimulus packages on AGI, not on need. See: Democrats unveil $825 billion in stimulus spending

By phasing out the tax cuts based on income, they complete ignore the massive differences in cost-of-living across the country. A family making $75,000 in the Bay Area might be on the verge of foreclosure. Similarly, a family making $75,000 in rural Iowa might be living in a 4BR house that they bought with cash. If you mail each of these families a check for $500, who do you think is going to spend it?

1 comment:

Mike Malone said...

True enough, but politically I bet it'd be a hard sell. I imagine it'd be hard to get votes in the flyover states after you tell them they're getting half as much as people in California because their cost of living is lower. I think some people might not think that's "fair."