CNN.com posted a story the other day on rebate checks from the IRS with a schedule to let everyone who files their taxes know when they’ll be receiving the $600 promised to individuals earning less than $75,000 a year. The Federal Reserve also announced interest rate cuts today. But will that be enough to address the hardest hit of the U.S.’s communities?
Although the rebate may relieve the spring and summer budget crunch, I can’t help but feel these measures will better serve wealthy individuals and companies faster than we can count it. Gas prices alone went up overnight to $3.267 a gallon, reaching an all time high of $110 a barrel. And although we’ve had five interest rate cuts since September of 2007 with another cut today, the question still remains – is it enough and is it too late? Will it actually address the budget issue and should these and other measures have been considered sooner?
As history has proven, the Fed will reverse its cuts once its leaders feel the economy is stable. But somehow, I don’t think the Federal Reserve’s decision will be based on how poor people are affected. In general, the Fed’s actions will be based on the value of the dollar at home and abroad, as well as cover their collective rear-ends because they failed to prevent the mortgage crisis. Further, the cuts will not address issues that affect poor people like soaring gas prices, decreasing lender confidence that make student loans more difficult to obtain, disproportionate housing cost drops, rising mortgage interest ratios, or the poor people’s dependence on high interest credit cards.
In my economic stimulus package, our rebates would be larger, returning to poor people more of the public money that has gone to Big Business in the form of tax breaks—given to them even while they precipitated our current economic woes. And, yes the rebates would also be given to non-registered immigrants. I would cap student loans at lower fixed rates than what is currently offered. And I would also cap mortgage rates at the lowest rates possible to give homeowners a chance to recover from bad loans. An economic stimulus package is deficient without a plan to lower dependency on oil. In addition, the Federal Reserve would no longer bail Wall Street out but rather concentrate on small business owners who are in need of loans to make their business more sustainable.
The bottom line is that there are more poor people than there are wealthy. Economic measures that don’t improve the lives of poor people will keep the economy at a depressed state. As more people of color slide further into poverty and the ranks of the working poor increase, the economy gets more and more cumbersome. The Federal Reserve and Federal Government should concentrate on expanding the economy by expanding the base of people that can participate in it. When poor people have more opportunities, we can begin to talk about stabilizing our economy.