Stimulating The Economy?

This letter to the editor, in the January 26, 2008 edition of the Washington Post, sums up my views as to the economic-stimulus package, destined to pass Congress in some form:

The back-patting by Congress and the White House over the proposed economic stimulus package ["Negotiators Grappling With Stimulus Plan; White House, Hill Strive to Maintain Bipartisanship," news story, Jan. 24] should be put in check by calling these "tax rebates" what they really are: tax loans. Unlike the checks issued in 2001, those proposed would not be part of a planned permanent tax cut and would thus have to be repaid by taxpayers (that is, us) sometime in the future.

Encouraging us to spend these "rebates" quickly instead of saving the money to pay off this tax loan is shortsighted. That behavior would lead to a quick economic high and then a deep low. It would be like abolishing paycheck tax withholdings and telling folks to spend the money as it comes in and deal with the tax bill when it arrives.

Today's plan may work to boost lawmakers' images in the short term, but it is merely a sham to those of us who will still be paying taxes once those public servants leave office.

Mr. Ryan Fitzgerald, the author of the above letter, has it exactly right! Putting money, so-called "rebates," into the hands of the American people fails to address the multiple causes of the present economic crisis.

And it is a crisis. The subprime mortgage crisis, Americans' penchant to spend over 100% of what they earn (via easy credit and other overspending), and the outsourcing of American industry cannot be solved by a one-time Congressional measure. In fact, the economic-stimulus package is like putting a bandaid on an arterial rupture and provides only short-lived relief:



(Crossposted to THE ASTUTE BLOGGERS)