Georgia and the Stimulus Package

It's official. President Obama has signed the "stimulus package" into law. Don't get me wrong the federal government was compelled to do something. The 2008 election is evidence of the economic concerns that were in the minds of a majority of voters. There will always be a political realignment whenever the economy is in the doldrums. Now we will see if this "plan" will have any affect on the recession. Personally, I doubt that it will.

In reality the stimulus package does not get at the root of the real issue of this recession--greed. Companies need to make a profit to be successful, that is obvious. They need profits to reinvest and stay competitive. But,  there have been millions of dollars spent on CEO salaries whose primary job was to make sure stockholders were happy. These stockholders tended to be happiest when their investments were growing. The idea of losing value in the market could not be allowed or the CEO's term would be short indeed. Is this realistic? What happened to investing in companies for the long run. When investing meant weathering the ups and downs of the business cycle that inevitably occurs. Again, the answer is greed. Madoff was successful in his ponzi scheme not because of his greed, but the greed of his investors. Greed is also driving the desire to have a stimulus "plan" from the federal government. The state governors are drooling at the thought of more federal money to bail-out tight state budgets. They want the stimulus funds to support a state budget that didn't work in flush times. I doubt any governor will have a vision to use the money to push for tax cuts or building a modern infrastructure a growing economy will need.

In Georgia the state will get 350 million dollars for Medicaid spending as part of the stimulus plan. This money will replace the amount of Medicaid expenditures that are supposed to be Georgia's responsibility. I wonder if the Governor will take a bold step lower the corporate tax rate with this windfall. That will most certainly encourage investment in Georgia. Or will the Governor simply fund his and other Georgia lawmakers' pet projects? Who know? But I am betting on the greed factor impacting any budget decision. To his credit the Governor still wants to cut the state budget even further. However, this new found fiscal responsibility should have been a priority during flush times, not just these challenging lean times.

We all want more and we want it now. Maybe we need to learn a lesson from our agricultural heritage--there is a time to sow and a time to reap. This economic recession is the season we reap the bitter fruit of personal, corporate, and governmental fiscal irresponsibility.