KARLA SHIRVANIAN | staff writer
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illustration by Samantha Manuel
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We need something to work. There has been a lot of talk over the last eight months about who and what is going to fix our economy.
But I have to admit, I am tired of talk, much like the rest of the US.
Yet, can I believe the new stimulus plan that reaches over $780 billion is what is going to work and solve the economic crisis we are in?
I have heard both sides of the argument, the idea that there will be inflation that will damage us in the long run and the idea that everything can and will be fixed with the stimulus plan. What is truth?
For me, it is not tough to decide: I cannot trust the stimulus plan as it stands.
It is a bill that, although claiming to be bipartisan, has passed with almost no Republican support.
The plan proposal is over 1,000 pages long, and I am sure few will read through while trying to understand every point being made in the bill.
The stimulus bill consists primarily of government projects, whose impact on consumers will not be seen for several months.
So the truth is, there will be no immediate impact on the economy.
Even the positive aspects of the bill are not going to have a direct impact on those that reside in California.
This is because of the state-wide budget crisis—the new budget that took months for California legislature to agree upon.
According to political science professor Jennifer Walsh, the cuts made by the government will probably be off set by the increase in state and local taxes.
There will be an average of $800 more paid in state and local taxes per year, but the federal tax cut will only save the average person $400.
According to Walsh, instead of spending more on consumer products, we will be sending the money to Sacramento.
Rather than putting money back into the economy, like the stimulus plan suggests, the money reduced will simply defer some of the costs the new state and local tax increases will bring.
Consequently, there will be no money put back into the economy, but many, especially in California, will be simply reducing the costs of their new taxes.
I think we should be doing something, but I am not sure this is the route we should have taken. True bipartisanship and a reduction in government spending is the way to end the economic crisis in my opinion.
I do believe tax cuts can be very helpful to a hurting economy but that combined with more spending sets up for a larger deficit and more government interference in the future.
I want to believe in this bill but as it stands I cannot. I just hope my waiting is not in vain and that I am able to say I was wrong in my first inclinations of the bill.
For now I am a hoping for changes that we will not have to pay for in the long run.
