Economic Stimulus For the Rich

Due to its payment structure, the economic stimulus plan passed by the U.S. House of Representatives fails to either help those who need it most or to effectively stimulate the economy. It is well acknowledged that the people who will most quickly spend the money are the people who have the least of it. Yet this plan effectively phases out payments to those on the bottom end of the income spectrum and excludes those, such as many low-income seniors, who do not file income tax returns. Although this plan is better than the Bush Administration's proposal in which only 11% of the rebates would go to households with incomes below $30,000, the 23% of the value of the rebates that would go to households with incomes below $30,000 is not enough. Instead of giving rebates to those who earn more, the U.S. government should increase food stamp benefits, unemployment benefits, and funding of social programs that will be facing cut-backs due to state spending cuts.

Related Articles:

• "An Analysis of the Rebate Proposal in the Announce Stimulus Deal" (Aviva Aron-Dine, Center on Budget and Policy Priorities)
• "Who gets stimulated?" (Paul Krugman, New York Times Blog)