There’s a national economy, and then there’s a ‘people’s economy.’ Guess which one will see more “relief.”

Is the Bush Stimulus Going to Help You?
By Noni Prins

The rhetoric surrounding George W. Bush’s economic stimulus package, as boastfully “bi-partisan” as it is (we are, after all, in an election year), indicates a complete lack of comprehension of the difference between this ‘national’ economy and the ‘people’s’ economy, and the extent of the gap between the two.

The unveiling of his plan was classic Bush: state something ambiguous about a $140 billion adrenaline shot, then have your cronies act as wingmen. Hence, at last Friday’s press conference, Treasury Secretary and former Goldman Sachs CEO, Hank Paulson was left fending off uncomfortable questions like: would the plan help “elderly people on fixed incomes?” His answer: “The Christmas season has come and gone.”

The national economy, as measured by large scale figures simply does not represent individual citizens’ economic circumstances. That’s why debate over whether we are in a recession or not misses the point of everyday financial realities for most of the population. According to the standard definition of recession (two quarters or more of a decline in GDP), we’re not there. In which case, Bush and Paulson are technically right in saying the economy is simply ’slow’.

But, that’s been far from the case if we consider the people’s economy (the people – as in all the American citizens who don’t fall into that upper percent of the nation’s wealth bracket). And very little in the President’s, or in most of the presidential candidates’ plans, will change this.

The highest bidder mentality of Wall Street and its elite private equity groups has exacerbated the sub prime and regular housing market crisis. As investment banks stuffed loans into packages of toxic speculative waste, actual people lost their homes, hurt further by media attention on those declining home values, which didn’t thrill new buyers.

In the process of trying to keep up escalating payments on their homes and home equity loans (backed by falling home values), people increased their credit card balances, suffering requisite late fees and higher rates, and ravaging 401K plans in desperation, during a time in which the values of those plans shrunk along with the falling stock market.

Don’t get me wrong. No one would scoff at an $800 tax rebate check in the mail, but at best, it may provide a month of relief. Meanwhile, it does nothing strategically to fix the barrage of corporate gouging that continues unabated and unregulated by the Washington powers that be (including those running for office). Seriously, wouldn’t it kill you if your health insurance premium rose just as you were about to cash that government rebate?

For the rest of the story, click here.