The Daily Show's Jon Stewart has a great idea for an alternative way to stimulate banks into lending again. Perhaps others have thought of this previously, but he told PBS's Gwen Ifill on January 27th that, rather than giving bailout money straight to the big banks, Congress should give tax credits to Americans for the express purpose of paying off their consumer debts. Not only will the banks get a cash infusion so they can regain liquidity, his reasoning goes, but consumers will be relieved of their credit card and mortgage debts and will thus have more spending money to pump back into the economy. Stewart calls it "trickle-up economics," and it is disappointing that Washington has not brought forth any similar proposals.
Instead, it seems that Congress is interested in another kind of consumer-based stimulus. Yesterday, the Senate passed an amendment to the American Recovery and Reinvestment Act by Sen. Barbara Mikulski (D-MD) to allow lower- and middle-income Americans who buy new cars and light trucks to deduct the state sales or excise tax on the purchase and interest payments from their federal income taxes. Mikulski says this would stimulate employment in the auto industry, but it does not apply exclusively to American-made cars, nor does it incentivize purchasing more fuel-efficient or alternatively-fueled vehicles. Given all of the negative consequences of America's automobile dependence, not the least of which is its contribution to global warming, making it easier for people to buy cars seems short-sighted. Not only that, but the amount of money for highways in the Senate's latest version of the stimulus package is around $40 billion, while rail and transit projects stand to receive only $5 billion (a number that one Republican Senator wants to change to zero).
At a time when demand for public transportation alternatives is at an all-time high, while budget cuts are forcing transit agencies to cut service and raise fares, Congress does not seem to have its priorities straight. Every crisis is an opportunity. The current economic situation should prompt us to make wise, long-term-oriented public investments that will create jobs that build a more sustainable future.
--Malcolm Kenton
