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Economic Stmulus Package: Antibiotics for Your Cold

Every day, the news seems to get worse. The stock market is sinking, international exchanges are sinking more. New home starts are cratering and foreclosed homes are going on sale in record numbers. The word recession leads off almost all news broadcasts.

Things don't look good for our economy. They have been worse, but we may be in for a tough series of quarters.

Congress has fallen all over itself trying to fashion an economic stimulus package. The final legislation will probably include a laundry list of tax cuts and a check for a few hundred dollars in every taxpayer's mailbox. The problem with this package is that, like taking antibiotics for a cold, it fails to properly address the problem.

Our economy is slipping because consumers are defaulting on credit card debt and mortgage payments. If you were behind 6 months on your mortgage payments, would a $600 check solve your problems? Worse, the Department of the Treasury, which has agreed to fastrack any check mailout, has already stated that it will not be able to start printing what could be over 100 million checks until July. By then, we could be more than 6 months into recession. By the time the money is spent, and has given the economy its boost, we may already have seen the worst.

When you give a patient an antibiotic for a cold, the patient will get better, but it might be simply because people usually get over colds by themselves anyway.

Unfortunately, Congress was considering a much more useful stimulus package most of last year, but it failed to pass it. I am talking about the expansion of the SCHIP program. This program, as originally proposed, would have increased health care spending by billions nationwide. It would have disproportionately benefitted the lower middle class, which is the group that will be most intensely affected by a recession.

Moreover, unlike the stimulus package Congress is considering now, SCHIP is already an established program. Doctors, hospitals, and clinics are already plugged into the system, meaning new billions authorized could be infused into the economy immediately.

SCHIP spending might have helped the housing market. If a parent is struggling to meet mortage or credit card payments, being relieved of the burden of paying health expenses for one or more children might free up money for debt control.

I know as a heath care professional my viewpoint is skewed, but it is hard to think of a more useful place to spend money when the government wants to boost the economy in a hurry. The money can be spent almost immediately. It goes directly to people who need it. There is a built in expert system (doctors) who can oversee the spending to make sure the money is not wasted. The money goes to many small businesses (doctor's offices, local hospitals, pharmacies, home health companies) rather than large corporations. It stays in within the country. It will benefit every community, rather than concentrating benefit in big cities or with large business entities (such as Wal-mart, McDonald's, or large banks). And best of all, the spending makes America healthier -- always a good thing.

Oh, and did I mention that 100% of SCHIP money benefits children?

If you are going to spend $100 billion to benefit the economy, why not do it in a useful way, instead of writing millions of free checks indescriminately?

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