Show me the money. That's what Cuba Gooding Jr. said to Tom Cruise in the film, Jerry McGuire, as Cruise's character negotiated to retain his job. It was a pivotal moment in that film.
When the government enacted a $787 billion package of tax cuts and new spending this spring, there was much talk about how all that money would help pull the economy out of a deep recession. That certainly was a pivotal moment in the history of this recession. However, it's now July and the American public's confidence in the stimulus package is waning a bit. They're asking the Obama administration to “show me the money.”
So where is it? How much has been spent? The answer, according to an online editorial written by John Schoen of MSNBC.com is, “Of the $478 billion in direct spending (the rest is mostly tax cuts), the Congressional Budget Office claims only about $150 billion will be available this year.”
He says that though some agencies like the Social Security Administration, Health and Human Services, and the Agriculture Department, have spent a goodly amount of their 2009 stimulus budget, many other agencies have barely tapped into theirs. This includes our friends at the Environmental Protection Agency (EPA) and Department of Energy (DOE).
Comparatively speaking, though the DOE has pushed more dollars into the economy than the other laggards, it still only accounts for just over 2% of it's stimulus budget.
Even Obama's Senior White House Advisor, David Axlerod — while appearing on NBC's Meet the Press television program in late June — spoke about how the money hasn't yet broken the recession's back.
The Stimulus Package certainly offers great hope to HVACR manufacturers and contractors alike in terms of the rebates (30% with no ceiling for geothermal systems, and 15% with a cap for high efficiency (90% AFUE) heating and (16 SEER) cooling systems, combined with other rebates being put together by utilities and the equipment manufacturers themselves). However, not a lot of this money has made its way back into consumers' hands.
As of this writing, May shipment figures from the Airconditioning, Heating, Refrigeration Institute (AHRI) weren't available, but April shipments continued to decline over the same period in 2008. Warm air furnace shipments fell 8.5%. Central air conditioners and air-source heat pumps dove 23%. Even commercial water heater shipments felt the pinch — off 20.8% compared to the same month last year.
Be patient, we're told. The money is around for at least 10 years. Patience is a virtue, but is it a strategy? Since when is government spending the panacea to all our economical woes?
If I remember my college economics classes correctly, strategies favored for recovering from a recession vary depending on which economic school policymakers follow: tax-cutting versus increased spending versus non-interference. I also seem to remember that none of them, by themselves, work very well. It's never been an all-or-nothing solution.
To add fuel to the fire, at press time, the House of Representaives passed the Waxman-Markey American Clean Energy and Security Act, which includes cap-in-trade legislation. Talk about taxes!
The stimulus package may look good on paper, but hasn't stimulated the economy yet. Some will tell me I'm wrong. Great! If that's the case, then please, take some time and Show Me The Money!
Opening up the 21st Century. As the 1900s came to a close, the world was plagued by a phenomenon called the Y2K computer virus that was supposed to bring all of our financial, governmental, and health institutions to a grinding halt. Some marked this as the begining of the apocolypse. Yet the transfer from the 20th to the 21st Century pretty much went off without so much as a trumpet call from Gabriel. Sort of. This story of our sixth decade can be found on ContractingBusiness.com in the resources section.