The Stimulus Fallout

Every newspaper I've read is calling the stimulus package deal reached between Democratic Congressional leaders and the Bush White House a glorious bit of bipartisan awesomeness. Except there's nothing awesome about it.

Specifically, the Democrats appear to have buckled in the face of the Bush administration’s ideological rigidity, dropping demands for provisions that would have helped those most in need. And those happen to be the same provisions that might actually have made the stimulus plan effective [...]

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 the government lays out doesn’t get spent — if it just gets added to people’s bank accounts or used to pay off debts — the plan will have failed.

And sending checks to people in good financial shape does little or nothing to increase overall spending. People who have good incomes, good credit and secure employment make spending decisions based on their long-term earning power rather than the size of their latest paycheck. Give such people a few hundred extra dollars, and they’ll just put it in the bank.

And Krugman has the numbers to prove it. Close to two-thirds of these rebates go to the top two-fifths of American households, to people who don't need the money and who won't spend it. Democrats in the Senate are trying to change that, and Bush is chastising them, saying not to mess with his terrible plan. So we're headed for another humiliation, and a potential cave-in by Democrats, giving a fake "stimulus" that puts a lot of extra money needlessly into the pockets of rich people.

Meanwhile, it seems that the Dems should makemore of this.

The Bush administration will cut counterterrorism money for police, firefighters and rescue departments next year, but not by as much as it originally proposed.

Next month the White House will request $2.2 billion to help states and cities protect against terrorist attacks in 2009, and not $1.4 billion, an administration aide told Rep. Peter King, R-N.Y., on Friday. That would be 10 percent more than the president requested for 2008, but 40 percent less than Congress gave the department this year.

This is called "keeping America safe."