*sigh* is this the 'change' people voted for?
We all know where the economy went wrong by now. Conservatives can argue that the incentives for giving home loans to people who could never make the payments were put in place under the Clinton administration. Liberals can argue that these sub-prime lending practices continued, and even increased, during the Bush administration. Everyone agrees
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Which two-thirds are pork? Your own list has a lot of "checking" noted. Depending on exactly what those expenses are, it may or may not be pork.
Though I realize we may also have a semantic issue: how do you define "pork"?
To answer your questions on #4 and #8 ("How does this stimulate the economy?"): the theory is the reverse of a "trickle down" approach. If more people spend less time worrying about how to afford basic food, clothing, shelter, and transportation in population centers (i.e. cities), they have more energy and income to put back into the economy in the form of entrepreneurship and investment.
It's investing in the long tail, rather than depending on megacorporations. Since our economy was rather spectacularly brought down by the collective unsustainable debt of the long tail, it may perhaps be repaired by reversing same. The problem with consolidated, giant banks and so on is that they group all the debt in one place, and it can reach critical mass. If we keep the opportunities spread among the Many, we also disperse the risk.
To address your comments on #2 and #3: both of these are "treading water" strategies. We can't solve everything all at once. We need to keep some bits running in idle while the rest of the system revs up.
Also, with regards to #3: Who says these states are in trouble because they're poorly run? With all the layoffs and other crises, many of the wealthiest states are facing unanticipated deficits, through no fault of management.
New York sits fair to be crushed twice by the economic collapse: Firstly because they are losing massive tax revenue from all the corporations of NYC that will have write-downs for years to come, as well as the income tax revenue that normally comes from people who are now laid off (and the sales tax on the things they buy, and the salaries of people who work for them, etc. for many recursions). And secondly because the funds and trusts that might normally carry the state budget through a crisis are in the crapper with the Dow Jones, where much of the money was invested (and what wasn't in stocks was in banks that are failing).
That pattern repeats with any state that has seen fat layoffs and job loss. What the hell are these states supposed to do? What the hell can they possibly offer to make their economies work again overnight? In time, with boosts to infrastructure that lure business and promote economic growth, they can recover. But that takes time. In the meanwhile, they need help to keep them from sliding further into the hole.
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So while I am a firm believer in public safety nets and programs, they has to be balanced with things that will help small businesses. While a lot of this may cause prosperity to temporarily trikle up, as you put it, printing money without tax reveues will surely bankrupt us.
Consider this: when we are told that the bailout cost, although large, is still manageable, it is only half the story. The loss of tax revenue is another nail in the coffin and could lead to a dramatic and unpredicted rise in public debt. That's not just taxes from megacorporations, it is taxes from you, from me, and from everyone else.
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Whether it works is another question, but Crom knows nothing else has helped until now, so we may as well give it a shot.
I agree with you that taking on more debt is a scary proposition. However, not taking on debt is almost certain to crash the economy even further. When you have a system that is allowed to "naturally run its course" you end up with economies like India and Brazil: most of the money in the hands of a few, with a feedback loop that continues to drive that arrangement to ever-wider extremes.
(Yes, India has a slowly growing middle class. That was possible because of the influx of cash from...the USA! The cash has to come from somewhere. We don't have cheap labor to entice other nations to invest in us, so debt it must be.)
On a larger philosophical scale, I believe what Mr. Obama is trying to do is break the feedback loop that puts all the money in the hands of a few by draining it from the bottom 90% of the population. He's trying to reverse that flow a bit.
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The Romanians have a saying for this: they call it "Wetting yourself to keep your pants warm."
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Unless there is some sort of exemption to any tax hikes on the "weathly," that makes small business owners the (evil) rich. And we all know that taxing the rich is rather popular at the moment. I worry that the local Bodega owner will be hurt, not helped, by such policies. This could put him and the corner hairdresser and the TV repair shop and the local car repair place out of business, and poof! There go those jobs.
This is what I mean when I express concern about small business and job creation possibly not faring well under the current administration's suggested policies.
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If it's in salary or other personal income, then they are no worse off than the junior-level executive who makes 200K a year. Is it "rich"? I dunno, but it's a hell of a lot more than I make, and I'm doing pretty well.
If it's a measure of the business's income, then there are a million tax write-offs that businesses get but individuals do not.
My parents ran their own small business for nearly 20 years. Lawyers may get paid more per hour than a bodega owner, but their expenses are also significantly higher. If they had netted $200,000 per year, we'd have had a much easier time paying for college.
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