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Jan 20, 2009 -- Alternatives to a federal stimulus package

The prospect of a huge federal stimulus package is something that doesn't excite Clark. It's the wrong solution to the problem, in his estimation -- even if it is politically popular.

So what alternatives are available? For starters, the penny-pincher believes we need more money for unemployment compensation and possibly more money for food stamps. Many families who never needed food stamps before will need them as more jobs are shed. Additional job training and job reorientation are also necessary to alleviate the unemployment crush. Finally, Clark also wants a tax cut for every working American. That's a very limited laundry list of things that don't have anything to do with "stimulus" payments.

The perennially unpopular gas tax hike also needs to become a reality, according to Clark.

Let's face it: We have very short memory spans. With gas prices relatively low, there's no real incentive to buy a fuel-efficient vehicle. A heavy gas tax would encourage people to buy fuel-efficient cars and reduce our dependence on foreign oil. Sure, it's controversial, but then you can take that money and improve infrastructure, deteriorating roads, etc.

The bottom-line is that we don't have enough money to do a giant stimulus package. Our goals need to be more focused.

Unfortunately, Clark won't be able to answer any questions submitted via commenting. If you have a question, please try posting it to our message boards.

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What others are saying

  • Gas Tax
    Clark,

    I heard you on your show Friday defending your "unpopular" opinion regarding the need for a gas tax. In principle, offsetting the gas tax with tax breaks for net positive tax payers (about 60% of Americans) would not be a bad idea. It would be a way to get the slugs paying no tax or those in a net negative tax position to cough up some assistance to the treasury. After all, it is pretty ridiculous that there are people out there using the roads that are not responsible for the revenue required to maintain our transportation infrastructure. The problem with your proposition is that the bunch pinheads in Washington will never reduce a payroll tax for net positive tax payers--you know that. So your plan fails on that basis. How about this? About 50% of Americans really should not do 3 things: Drive, vote and reproduce. So, if the test to obtain a driver's license became a real test and not a joke, we could thin out traffic which would push the unquilified toward mass transit, substantially reduce gasoline consumption and even reduce traffic fatalities. Now that's a win -win siuation. I drive a Suburban for two reasons. One because my work requires I carry large stuff on occasion. Secondly, for protection from that 50% of people that should not be driving to begin with. It never ceases to amaze me that people will place "greeness" over the personal safety of themselves and their kids by buying a car with no metal around them. For the folks out there that think a Suburban is a "stupid" choice of a vehicle based upon fuel consumption, they should know that the active fuel management system kicks off 4 of the 8 cylynders at certain speed/torque conditions and allows me to get 26 to 29 MPG. My Suburban also is equiped to burn ethanol but which was pushed by EPA types yet there is not an Ethanol station within 200 miles of my house. Just another pin headed regulatory requirement. Based upon the trend of tax cheats being exposed in the current administration, we could balance the budget by simply auditing politicians.
  • Higher Gas?
    Has anyone stopped to realize that there WAS NO economic problem before the fuel prices began to rise? Fuel Controls everything.
    As the prices rose, everything costs more because of transportation increases, and other mandatory usage. Since we can't afford the prices, We don't buy. Industry can't sell so they stop!
    People can't pay their mortgage because they have to buy the higher food, and pay for transportation to work. HELLLOOO!Will Somebody Wake Up?
  • gas tax
    No one ever questions the assumption that everyone has to drive. Everyone assumes that car ownership is a mandate. What if we became a society where personal transportation was a utility, with vehicles checked out like library books? Use mass transit when practical, use an auto (or electric car, or even a STEAM POWERED CAR like the Doble steam car. The point is that the entire transportation process could be outdated.
  • Clark's Gas Tax
    A plain increase in the tax is flawed as our society is based on truck delivery. That's why pices (inflation) spikes with surcharges etc. So, I'd suggest starting at .50 cents to a dollar, with exemptions for interstate trucking/delivery of necessities like food. That would decrease demand at one level at least.

    Second, I like the idea of a sliding scale for new cars (gas guzzler tax idea. That moves us towards "green" and all the other problems in the world. Now is the time when prices are down and it won't kill people to pay a little more. Oh yeah, have some economic task force develop a tax on the Exxon's of the world so they are in this with everybody else. None of this is easy, but could be doable.
  • Drilling here is Big Oil Idiocy
    It is the sad state of the right-wing mind that gives the "DRILL HERE, DRILL NOW" movement any legitimacy. Those who support this idea want to base America's economic safety and independence on the GUESS that there MAY be oil reserves near our beaches and wildlife preserves. What these people really support is the status quo, where people's lives are dependent on gas-fueled cars, and keeping the energy execs rolling in our hard-earned cash. A gas tax will keep at least some of the energy expenditures in the hand of the people, and offer the opportunity to get real transportation alternatives off the ground. Paying higher prices for gas may be painful for some, but for those of us who didn't buy a Humvee or Escalade when it was clearly stupid to do so, it is a just solution to other problems, such as overuse of automobiles/traffic and air pollution. And if it keeps our states from going bankrupt, I'm all for it - better a gas tax than raising property taxes or destroying the school systems.
  • How much more to pay
    As a farmer, we already pay the gas companies more than 15000 per month to put food on the tables of Americans. Unfortunately the prices of our crops do not reflect any taxes that would be added to our fuel costs. We pay more, make less, food producers may be the next industry to go broke. Try living without eating.
  • All of things are "stimulus"
    Increases in unemployment benefits, increases in food stamps and broad based tax cuts are all "stimulus" payments. They are also all good. Anything that either flows money back from the government to the people (or slows the flow of the money from the people to the government) is by definition a stimulus because it is adding dollars to the private sector where it is needed. Keep your mind open when you are thinking "stimulus". Sending checks out to everyone was the worst way of doing it because most of it was socked away in savings and debt repayments. These other methods are more effective because they help people and they promote additional monetary velocity.

    Also, the raising the gas tax is a great idea (I commented on it in the other thread), but not right at this momement. First we need to get through deflation, and you can not do that by raising taxes of any kind. As soon as inflation comes back, then raise the gas tax.
  • gas tax
    I agree we do need to do something to promote fuel independance and reduce emmisions. I have no problem with a small gas tax increase to do so and provide funds for highway maintance. The only problem with this is there are a lot of people that own small efficient cars that are unable to afford a large fuel tax increase. I think the most fair way to create additional revenue would to base vehicle registration and license plate fees based on vehicle weight and horsepower ratings. This info is already available as is part of vehicel vin number. that way the heavest vehicles (ones that cause most wear to roads) will pay more and less fuel efficient vehicles will contribute more. This way if you make decision to purchase large high powered vehicles you will pay your fair share of costs. By the way I own a large pickup truck and this would effect me.
  • Stimulus package options
    Great idea about the gas tax. I would be all for it. But, keep in mind that the government doesn't spend taxes collected with the intent that is was collected in the first place. Unfortunately, they will most likely use that money to fund other "packages"
  • Not a higer tax but a better business plan!
    The problem started when the mortgage industry had problems with the adjustable rate mortgage loans; this started a chain reaction leading to the auto industry and now the bank crises. The mortgage industry approved loans that shouldn’t have been approved but by twisting the numbers on a document without thinking, anyone could get approved for a loan. When the regulating authority didn’t stop people from living outside of their means this caused foreclosed homes when the mortgage rates were increased. There needs to be stricter regulation on loans and more hands involved in the approval process to prevent foreclosure.
    Increase production and lower unit cost will put the auto industry back on track. Do you think everyone wants to buy gas guzzling vehicles when gas cost $4.00USD per gallon? The world is going green and the market has shifted interest to the environment so energy efficient vehicles are the way to go. The government could use "stimulus" payments to offset the cost of the hybrid autos for them to catch up with the market and they could be sold to overseas markets for revenue. Monitoring of the "stimulus" payments has to happen before anymore handouts are considered. Unit costs such as Union employee salaries were higher than competing firms making autos at lower cost. Negotiation between the union and the firm about short term pay roll adjustments need to happen before 100% unemployment goes into effect for everyone due to bankruptcy. Trillions of dollars are spent on overseas oil and the prices are set by the distributor therefore drilling and research for alternatives will keep the money in the US market. Higher taxes won’t solve the problem but using our own resources with technological advances in a growing market will.
  • Stimulus
    Enact the Fair Tax or eliminate business taxes and implement a flat tax!! Also get rid of mark to market accounting rules. that will stimulate things more than printing money that is only backed by the ability of the govt to confiscate money from the people.
  • More taxpayers needed
    More taxpayers needed, so let's get illegal immigrants to pay their fair share of taxes, allow more "legalized" immigration, but doesn't come with voting privelages for 10 years
  • more taxes?
    Give more money to the government?
    Give more money to the politicans who continue waste it away!
    people are dumb!
    All you people who think we should be paying more taxes than we already do start sending your money into the government. Put your money where your mouth is! we all know that will not happen. Bunch of hypocrites!
    LOL
    Change will come when there are no more career politicans in government!
    When becoming a politician requires good character and accountability instead of being professional liars!!!
    Everyone needs to sacrifice while Obama starts giving out our money to buy future votes!
    Spread the wealth?
    What a joke!
    Come on people can not be that stupid!
  • gas tax
    Clark i wouldn't have a problem with a gas tax of about 25 to 30 cents but I'd want a clause in the tax act to make the tax susspended after the gas price reaches $4 a gallon the effect would be to smooth out the peaks in the price a little and in the short run raise a lot of money. Without crippling consumers and driving up transportation costs for shippers.
  • raise the gas tax
    I heard a snippet and agree that raising the gas tax is a reasonable thing to do, especially now that gas is cheap.
  • Lemons everywhere? Make Lemonade!
    I'm looking forward to Obama's big money bomb, and have incorporated a woman-owned company to try and get a better place in line at the feeding trough.

    I predict there will be so much waste, fraud, and corruption at the billion dollar level, no one will even notice that my tiny company gets paid millions for doing nothing!

    Is this a great country or what?

    LOL
  • QUOTE: "Clark also wants a tax cut for every working American."
    What about just giving a tax cut to every "working" dollar - that way you'll give the cut where it will do the most growing in investments and sweat.
  • Stimulus package vs. your state welfare idea
    Clark, you want the government to extend food stamp and unemployment checks? This is extending the welfare model. I would rather the government create a job like improving infrastructure than simply continue sending checks to the unemployed. At least value is created, and most people would rather be payed for working than collect food stamps and unemployment.
  • The high oil prices are what caused the economy to start its fall. So when it goes back up like you fools hope that will be the last nail in the coffin.
  • Gas Tax
    I agree a tax increase on gasoline is needed, if it can put in a fund that can only go to transportation improvement of alternative fuel research. Diesel on the other hand should be exempt. Diesel is an alternative fuel that gets much better mpg and we should be encouraged as motorist to go in that direction.
  • SURPRISE! Gas will go back up!
    Enjoy it now while you can. Gas will go back up. It's only a matter of time.
  • TOM FRIEDMAN'S GAS TAX
    "FORBES" in today's issue slammed the Friedman idea of never letting gas go below $4 a gallon. They claim he "played fast and loose with the math."
    Show me otherwise !!
  • Clark Howard - Socialist?
    Now that's an idea - force consumers to buy 'green' cars by way of raising taxes so that only the well-to-do can afford to drive their 'non-green' cars and punish those that most cannot afford the expensive 'green' cars in the first place with higher gas prices and a higher car payment to boot! Utter nonsense!

    And if that's not bad enough, then he proposes to spend this revenue on projects that have little to do with what the intent of the tax should be in the first place ( maintenance of roads and new construction roads). Why not tax tomatoes and use that revenue to build a base on the moon? This kind of logic has resulted in the out of control spending and waste that we have today.

    Clark bemoans our dependence on foreign oil, but then fails to mention the fact we could greatly reduce this dependence by DRILLING HERE NOW!
  • ALL POWER, WEALTH AND HAPPINESS TO THE GOVERNMENT!!!
  • I wish the government would give me the option of using my tax dollars as toilet paper than sending it to them. I would get better use of it than they would.
  • More tax = more government waste
    Many seem to assume the politicians will do the right thing with more tax money. They will just waste more on pet projects and things that will buy them more votes in the next election.
  • Yes lets be like California. That's the answer to all our problems. So goes California so goes the nation STRAIGHT TO HELL.
  • Focused Goals
    Raise the gas tax, I couldn't agree with you more. And instead of an auto co. bailout why not give consumers incentive to buy "green cars" or "commuter cars", even as a 2nd vehicle. The extra costs of ownership, tags, property taxes, should be disallowed or special discounts for the second car. Insurance should be based on miles driven as a combination of both vehicles and a tax deduction or credit should stay be in place. Even without this plan, insurance should be based on miles driven. See the following bill proposed in CA. News Release


    For Immediate Release:
    May 22, 2008

    Contact: Nate Solov
    (916) 319-2006

    "Green" Auto Insurance Bill Passes Assembly
    Environmental, Auto, and Insurance Groups Support Groundbreaking Legislation

    Sacramento, CA – Assembly Bill 2800, authored by Assemblymember Jared Huffman (D-San Rafael), was approved today on the Assembly Floor with bipartisan support. The bill would allow auto-insurers to provide discounts to consumers for participating in voluntary mileage-based auto insurance programs in which the consumer would allow the insurer to verify their mileage.

    “California is on its way to becoming one of the first states in the nation to offer drivers environmentally friendly auto-insurance policies,” said Assemblymember Huffman.

    Under current law, drivers are only required to provide auto-insurers with estimates of their projected mileage. This creates an inaccurate system that may or may not reward those who are truly driving less. AB 2800 improves California’s auto-insurance market by rewarding those who verifiably drive less.

    A recent real-world study administered in Texas offered a reward to drivers who drove less. It enrolled the 3,000 necessary participants within ten days of announcing the program and successfully lowered the drivers’ Vehicle Miles Traveled (VMT). If just 10% of California drivers enrolled in a program priced like this one, by 2020 we would avoid 46 billion miles driven and save 2 billion gallons of gas. With voluntary programs, these VMT reductions are made by drivers who are willing to change their driving behavior.

    AB 2800 now heads to the state Senate.
    ###
    Capitol: State Capitol - P.O. Box 942849 -Sacramento, CA 94249-0006 - Tel: (916) 319-2006 - Fax: (916) 319-2106
    District: 3501 Civic Center Drive, Room 412 - San Rafael, CA 94903 - Tel: (415) 479-4720 - Fax: (415) 479-2123
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