Our Economy Needs Real Stimulus

Connecticut’s recession continues to get worse. Unemployment in our state is now 8.8%, just below the national average of 10%. We have lost over 87,000 jobs this year in Connecticut. Every middle class family has been directly or indirectly impacted by this job loss, and the federal and state government have failed to come up with solutions that work.

The stimulus package passed by Washington has failed to stimulate the economy. While we have been able to receive some nice improvements from the stimulus package (e.g., repaving the Merritt Parkway around Exit 46-48), it has failed to stem the tide of unemployment facing our state. Unfortunately, the main result of the stimulus package is another $2,500 in national debt for every man, woman, and child in Connecticut. The stimulus package has been an expensive failure.

Fortunately, there are steps both federal and state government can take to help end the recession. Notice I said “help”, because government cannot end the recession by just spending more money. Small businesses will need to lead us out of the recession. Small business owners have created more than 90 percent of the new jobs in our state in the last 10 years. While big corporations are great to have in Connecticut, it is the little guy who really drives our economic growth. Government’s role should be to set up the best tax, regulation, and legal system for small business to create good jobs for Connecticut families.

First, the federal government should repeal the remainder of the stimulus package and use it to cut payroll taxes for small businesses and middle class families. Less than 20% of the stimulus has actually been spent, meaning there is over $500 billion still unspent. We could cut the payroll tax in half for the next year and still spend less than that. The payroll tax is currently 12.4%, split evenly people employers and employees. This tax cut would mean the average middle class family would receive $1,500 of their income back, and small businesses would get 3% of their payroll back.

Instead of the pork-barrel projects in the stimulus package, we can directly help small businesses and middle class families. Instead of give-aways to special interest groups, a direct tax-cut will enable small businesses to hire more people and put money directly into middle class families’ pockets. Best of all, the deficit would be lowered because the tax cut would be less expensive than the current “stimulus” package.

Second, state government needs to reverse the tax increases in this year’s budget. I was proud to vote against this budget, which increased taxes and fees by over a billion dollars, and borrowed a billion dollars to cover operating expenses. We need to reverse these tax increases, and get serious about cutting spending at the state level. Common-sense ideas like resetting all state program spending back to 2007 levels, shifting more social services from state agencies to less expensive non-for-profit community providers, and merging duplicative state agencies have all been left out of our budget. Instead, higher taxes on companies and individuals will choke any job creation that may happen in the next few months.

We need real stimulus for our economy. Federal and state government are both getting it wrong right now, as evidenced by our high unemployment. My hope is that both Republicans and Democrats can work together to implement the real solutions I have proposed for small business and middle class families.