I am writing to ask you to support the stimulus bill as it has come to the floor, If there are to be any amendments to that the bill it should be to add spending and/or reduce tax cuts. In specific I am asking you to reject the amendment being put forward by Senator's Collins & Nelson.
The economy is crashing and burning out here beyond the comfortable confines of Washington DC. We need spending by the federal government to help offset the significant drop in spending both by commercial interests and by consumers. Loosening the credit markets, which is the stated objective of TARP, will not be enough.
We consumers are tapped out. We have withdrew all we can from our retirement funds. We have borrowed as much as we can on our houses. We have maxed out our credit cards. We are not spending because we have nothing left to spend. (Note: I have not personally done all of the above. But, the point is as a group we have collectively reached the conclusion that our financial survival depends on us spending less and saving as much as we can. Savings, may mean to many reducing personal debt not actual savings. Either way it is not being spent on consumption.)
Business are not going to invest in increasing productive capacity if nobody is buying what they sell. So, any sensible business is also cutting back, reducing staff, reducing inventory if possible, closing plants etc... In short, trying to hoard whatever cash and assets they have. Hoping that at some point in the future those assets can be put to use for a reasonable profit.
Increasing access to credit will not help business or consumers. Since neither group wants to borrow money right now. Government is the only sector that can afford to increase spending now. We need that spending out here to create some kind of demand. Without it a deflationary spiral will hit us all, most likely before the year is out.
Tax cuts are supposed to increase capital available for investment. Investing that capital is supposed to stimulate job growth. That is the theory which proponents of tax cuts cite as the reason we must cut taxes. Leaving aside that eight years of tax cuts resulted in very little job growth here in the US. There is plenty of capital available to invest right now. What is missing is demand. Without increased demand capital accumulated by tax cuts will be hoarded to be invested in better times. That is why I am asking you to vote for increased spending and reduced tax cuts.
Look at the spending that Collins and Nelson want to cut. "State stabilization money", without assistance States and local municipalities across the country are also going to be forced to cut back. So in addition to consumers and businesses reducing economic activity a huge percentage of the government will also reduce economic activity. "State Incentive Grants", all the talk of the green economy is hog wash if States don't spend massive amounts of money on "greening" their properties. These investments will provide the seed money which will allow companies trying to produce "green" products get into business, develop/improve their products and become financially sound so that future growth will be possible. Funding for education, health care and transportation, all of which will go directly into the economy and generate or maintain jobs while providing much needed service to us, the general population.
These cuts are ridiculous and ideological. While some in Washington are playing politics and posing for photo opps, we are facing a major crisis. You campaigned on the slogan that "Washington is broken". I called hundreds of people on your behalf and told them just that. The absurd "debate" ( a very polite term for what is happening ) that is taking place around this bill is a prime example of the problems in Washington. Voting for increased spending and reduced tax cuts in this bill is a great opportunity for you to begin to make good on your promise to "fix Washington".