Welcome theology and economics students at Brophy College Preparatory from Phoenix, Arizona! Brophy was founded in 1928 and is a Catholic, Jesuit, secondary school. When I looked at the school’s inspiring philosophy, one statement stood out. It mentioned that Brophy “encourages dialogue between Christian faith and contemporary thought.” It is fitting then, to have some of Brophy’s students engage a question involving faith and economics in this month’s student forum.
Thanks go out to Principal and theology teacher Mr. Bob Ryan and to economics teacher Ms Kelly Guffey for donating some of their students’ scarce time. It is much appreciated!
Here’s a little context. The preferential option of the poor or, as Pope John Paul II put it, the preferential love for the poor, is a part of Catholic social doctrine urging the poor be placed first, rather than last, in our hearts and in our social policy agendas. The stimulus package, or the American Recovery and Reinvestment Act of 2009, has strong supporters and critics. As with many policy changes, the stimulus law will make some better off and others worse off . You might be interested in reading yesterday’s post “Catholic Economists on the Simulus Package” for more background.
Here is March’s resolution:
The stimulus package passed recently and signed into law may be considered a “preferential option” for the poor.
You’re invited to comment for or against the resolution.
Thank you for your comment! I will respond to each one of them. Finally, if you’d like to express your views on some current economic issues, please navigate to the Polls page (see top right) of the A&M Blog and do so.
I respect many of the ideas that others have presented; however, I would like to point out one of the stimulus package’s details that really intrigued me. When we truly analyze the breakdown of the package, the majority of the money is appropriated to “non-poor” causes. For example, there is a $80.9 billion allotment for infrastructure investment alone and $61.3 billion allocation for energy programs and research. Although both noble causes, how is this money a “preferential option for the poor” if this money is not directly being sent to them? As a result, they are not seeing this money at work currently. Yes, we might see this aid work in the long-term, especially if the $61.3 for energy programs and research can advance the United States’ efforts for energy independence. But what about the short-term needs of the poor? Well, one of the aspects that is beneficial for the poor can be seen in the education allowance. The government is allotting $90.9 billion for education services, to be seen especially in low-income, inner-city schools. This is one of the most important, best aspects of the package because it helps “the poor” both in the long- and short-terms. Consequently, if the government is able to invest in these youths’ futures, then (hopefully) we will see an increase in college-bound individuals from these areas and maybe even a decrease in youth crime rates.
I guess that when we look at the stimulus package as a whole, it’s not necessarily a positive plan for the poor because it impacts them the least (since the goal of it is to help the nation as a whole, not a specific American faction). However, we can see that it still holds some beneficial plans for the poor. Overall, though, this unfortunately, is not one of the best options for the poor because a plan that specifically addresses the poor’s needs should be enacted.
Thanks Victor for your ideas. I think you make a lot of sense in pointing out that the original purpose of the stimulus package was not specifically directed at the poor in America. Generally, a vibrant, growing economy is certainly in the interest of the working poor, and perhaps the issue is, to what degree will this stimulus money accomplish the objective of promoting growth. Right now, I’m not too optimistic that it will.
I definitely agree with what Victor said. From everything I’m gathered, the bailout itself is focusing a lot more on the source of the mess than specifically helping the poor. But, through that I think that the poor will eventually be helped—it’s just something that can’t happen in the short term. In addition, while not specifically helping the poor there are definitely things happening that will assist the poor indirectly. For example, a stricter regulation on sub-prime mortgages will no longer allow things to be bought that people have no particular right to buy. This may help change the philosophy of some so that they aren’t focusing on getting what they can’t have, but getting enough to actually achieve what they want. However, while only one aspect of the fiscal crisis, this in particular is a fairly objectivist view, and not one that would help the poor.
Thanks HBennet for your comment. I agree that it would be good for people to live within their means. In fact, it is sort of implied that Catholics do so as a matter of ordered priorities. And I think you make a good point that narrowly, this stimulus package is not an aid to the poor. Is it broadly, though?
Well, I’ve read a lot of the above responses and still can’t seem to come to a single conclusion. Yes, the stimulus package will create job opportunities and have some benefits for the poor right off the bat. But still, so much of the money is wasted on unworthy causes and our priorities are not in line. And then, of course, there’s the fact that, in reality, we as a country are still totally screwed with debt. I guess what I really think is that, from a Catholic perspective, there are some good things about this package as far as how it benefits the poor–but was that really the driving force behind it? I find it hard to believe that the rich, big-wigs in Washington really had the well-being of the impoverished in mind when they wrote this up. It reminds me of how, at our school, some teachers frown on the idea of giving students incentives like extra credit to donate money to the fundraiser drives we have, like the Turkey Drive at Thanksgiving that provides food for the hungry. They argue that we should donate money out of genuine care for others, not just for our own benefit, and I think this stimulus package is similar in the sense that if it helps poor people, it is not because the rich people that wrote it up had them in mind. It’s kind of like the question of whether the means justify the ends.
*the ends justify the means… my bad
Thanks for clearing that up.
Thanks Sean for this comment. I agree that debt is becoming a real economic concern, for all income groups. And I really liked your insight about incnetives and motivation. Adam Smith distinguished between self-interest and selfishness; the first gets lots done, while the second is a vice, the opposite of charity. I think extra-credit appeals to self-interest, and maybe the Turkey Drive does too.
I agree with a lot of what has already been said. While this stimulus bill has been designed to first help the large corporations, such as AIG, the Obama administration does seem to have a goal of helping the poor in the long run, through things like spending money on education. However slight, this bill is designed help the working poor simply because it is supposed to create jobs. This obviously will keep food on the tables of the poor, but this is not a “bailout” for the poor.
Good comment Greg, thanks. It’s my understanding that government manages wealth that is created in the private sector, so the notion that government “creates” jobs is difficult to support. Government monetary and fiscal policies though effect the climate within which the business economy operates. The stimulus package makes some hefty changes in that climate. Question is, are those changes helpful?
I will begin this blog by outrightly alienating myself a bit by mentioning that my take will not be based so much around the Venerable Pope’s encyclical on the Preferential option for the Poor (a concept I am aware of thanks to Brophy’s intense Gospel action class), but around my own understanding of just economics through my understanding of Islamic Economics. As a plan, the stimulus does offers an interventional policy the likes of which are often touted as analogous to FDR’s New Deal. Though the money has been touted by laissez-faire critics as prone to abuse with the earmarks involved, I understand that both sides present a valid response to this issue. However, as this is a stimulus, I find that it is logical to assume that part of the ab/use of pork is to stimulate others to work to the maximum benefit of this plan. As this relates to the Preferential option, Pope Paul’s active call is readily realized in this governmental action. In my own understanding of Economics as it relates to my faith, this is an action that should neither be seen as interventionist nor a delayed response of a wary government, it is rather an action to be seen in the light of the best interest of the people being governed; A government looking after its people in a recession is something to be commended in any faith-based action rather than feared. As it relates to pure economics, the stimulus’ effects on the the debt, I do see the effects that Vinay mentions as a definite problem and am interested to see what the proper response would be. I do not believe a taxation (a word that strikes fear in the upper-elite’s hearts) would be as applicable a situation further on in the nation’s economic course. However, bringing me back to my point on the faith response, I find that the stimulus as an indicative sign of a faithful response based on the universal faith idea of the Governing holding preferential and true accountability and responsibility on the well-being of the Governed be they the poor, the average citizen, or the upper-elite.
Very interesting comment, thanks very much Farid. There was a informative interview with a Professor Tabibian in a recent issue of The New Yorker magazine. Tabibian is an economist who is trying to get the Iranian government to embrace more elements of a free economy. He is not convinced that government management is the best way to go. In the US, the big question also is the proper role of government in the economy. The stimulus package aims to replace a drop in C, consumer demand, with G, government spending. This is the Keynesian idea of pump priming, or getting spending going again. The historical record on this approach is mixed. New Deal spending lasted almost a dozen years, with little movement in employment levels (see Amity Shlaes’ The Forgotten Man). Paul Krugman says Obama administration is not spending enough. As one of your classmates pinted out, the debt levels are now reaching alarming levels. I also recall in Mullahs, Merchants, and Militants: The Economic Collapse of the Arab World (Stephen Glain) that in many countries government management of economic affairs can create more problems than are addressed.