LOCAL COMMUNITIES AND THE 2009 STIMULUS
August 15, 2011
The well known and renowned 18th century Scottish philosopher and economist Adam Smith said it so brilliantly "This is one of those cases in which the imagination is baffled by the facts." Indeed, we are baffled by the facts which we have uncovered from the fruits of our research concerned with the 2009 Stimulus. We want to share with our readers the data and the rationale behind our consternation. In short, for every six dollars Washington will take from individuals within our communities , the so -called "Stimulus" the communities shall receive is, on average, one dollar in the form of "stimulus" return. There is something about this observed phenomena that caused us to look into this matter in greater depth.
We believe that the folks of Western New York are hard working, dedicated , frugal citizens doing their best to "make ends meet." These are not easy times economically. Much of our local region is agriculturally oriented with small family farms, some small industry and family owned businesses. It is not an economically advantaged area by any means but could be with the right policies in place.
We know too from our own background, that most of the area residents are dedicated, basically conscientious with and about their personal finances. They are family oriented, "savers" as best they can, thoughtful in life style and prudent in character. They know their immediate needs and the value of a dollar and how to stretch that dollar to meet their personal budgeted targets.
Most citizens, with whom we are familiar, are really not comfortable with government intrusions into one's private finances and how it is best to be spent, saved, or invested. This is particularly true when the explanation given is "someone else knows best what is 'good' and what needs to be done" on behalf of the individual citizen tax payer. The questions arise, "what is this thing that is 'so good' for the taxpayer and was that unknown 'so good' or portion thereof ever received in return?"
With these questions and factors in mind, we began to research just how much "bang for the buck" western New Yorkers received for their investment in the American Recovery and Reinvestment Act, commonly referred to as the "stimulus." We discovered, according to the Congressional Budget Office, the total cost of the stimulus to the American taxpayer is 787 billion dollars. With over 308 million Americans, that means that each and every American (man, women and child) on average ultimately has a tax burden of 2500 dollars to pay just for the stimulus. Or, if you make fifteen dollars an hour after taxes, it will take one month of one's earnings just to pay for that person's portion of the stimulus.
With these data in hand, we went further into the matter. We discovered: for every six dollars the typical Western New York community will pay in taxes to support the stimulus, one dollar comes back to that community in the form of stimulus. For example, our local communities in our study composed of nearly 130,000 citizens. This means that our tax burden just for the stimulus is about 330 million dollars. However, according to the official federal government website for the stimulus, our selected Western New York communities sample* will or has received about 59.4 million dollars. Again, that is 1 dollar of stimulus for every 6 dollars of stimulus taxation. Our question is, where have the other 5 dollars gone? We had no rational explanation. But, just for starters, upon further investigation, we discovered for example that the US Virgin Islands, a territory of the United States, has a population of about 110,000 people or 20,000 fewer people than in our local community sample. And yet, the Virgin Islands received 289 million dollars or almost five times more than our local community sample. So, if you make 15 dollars an hour after taxes, you have worked one month this year for the people of the Virgin Islands or elsewhere. Our readers may wish to check, as we did, recovery.gov. In short, we are, in the words of Adam Smith, "baffled by these facts."
As we mentioned previously, our local community sample is made up of hard working folks dedicated to their family and community. This is an area of humble means and cannot afford financial losses. To make matters worse, a number of communities within our selected sample were hit with a major catastrophic flood event two year ago. Many of the families lost much of what they had. Homes, public buildings, businesses, and highways were seriously damaged. Tri-County Hospital was rendered permanently irreparable. Many of our friends and neighbors are still reeling over this catastrophe. And these same folks are expected to pay their share for the stimulus, while receiving in return... as a community... one dollar for every six dollars expended.
We have no words to explain the reasoning behind the findings we have shared in this article or the motivation which drives these data. But we are confident that the right principles will prevail in the long term. That is the American way. We are reminded of the words of Franklin D. Roosevelt "Rules are not necessarily sacred, principles are." And our Country is founded on the principle "of, by, and for the people." The American public are a people who stand for uncompromising integrity based upon the principles of, by, and for the "Republic for which it stands." And that is how we see it FROM OUR PERSPECTIVE.
* The sample includes the communities of: Brocton, Boston, Cassadaga, Cattaraugus, Cherry Creek, Colden, Dunkirk, East Aurora, Fredonia, Gowanda, North Collins, Otto, Portland, Silver Creek, Sinclairville, South Dayton, Springville, Stockton, and Westfield
(Kevin Wysocki, a graduate of SUNY Fredonia and formerly from Cherry Creek, New York and currently from Washington, D.C. was the primary researcher and contributed to this piece.)