The Real Problem

A recent program providing $200 per child for school supplies to families on public assistance is drawing criticism from politicians and private citizens. The program was funded by Federal stimulus money that the state only qualified for because of a $35 million donation to the state by philanthropist George Soros. If Soros had not donated his portion of the money then the stimulus money would have gone to another state.

The major criticism of the program revolves around the notion that while the state government strangles the middle class with huge tax increases, the lower class is getting a handout without any strings attached. On the surface that seems like a legitimate argument, unfortunately it is not quite accurate. The $200 is a combination of private and federal funds; the states only responsibility is to distribute the money. Granted, the federal portion is made up of taxpayer dollars, but the only way the state would ever see the money return to our economy was by distributing it in the way they did.

Sadly, there are many irresponsible parents in the world that will spend the money on things other than school supplies. Nonetheless, most of the money will be pumped into the economy in one way or another, which is the programs real intent. It was classified as a program for “school supplies” to make it sound more palatable to the average person and to encourage the responsible recipients of the money to use it for that purpose.

With the present state of our economy, the only people who can afford to blow $200 are the lower class. If the money were put in the hands of the middle class, it would likely go towards bills. That is why these quick fix economic stimulation packages seldom work. Yes, the $200 will go into the local economy and stores like Wal-Mart will see their sales increase temporarily, but that will not translate into the creation of new jobs, which is ultimately the only way the economy will recover.

This is the problem with many of the quick fix programs like “Cash for Clunkers.” On the surface, it sounds like a great idea, but once the money is gone will any long-term jobs have been created? The only hope is that somehow the programs will jumps start our troubled economy.

What none of the programs does address is the real problem, a combination of high taxes and rewards to the scoundrels that nearly bankrupt the nation. People should be just as outraged over bank executives taking bailout money and going on expensive junkets as they are at a few bad parents buying a new game for the Wii rather than some notebooks and school supplies.

Ultimately, the government needs to realize that the money they seem to think needs to be “redistributed” is better off in the hands of the people who will distribute it fairly. That is in the hands of the taxpayer.

 

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