Just from what I've read today, Bush wants to send out temporary tax rebates (not permanent rate reductions, which I'm all for because they give people more incentives to save and work). The plan is to mail $800 checks to individuals and $1600 for married couples "as quickly as possible" so we can "get this economy moving again." You can read here and here for articles that better explain this situation for more eloquently than I am about to.
1) Why not "stimulate" the economy all the time? Why not send out $800 checks every week of the year? Hell, why not just let Bush fly around in a helicopter and drop $1000 dollar bills everywhere? That would really get things moving, right?
2) Where is the $150 billion going to come from? Higher spending always means either higher taxes or more borrowing, so taxpayers and creditors will become "unstimulated" as a result. Money is simply being transferred from one place to another. To quote GMU economist Russell Roberts, this is like merely "filling a bucket full of water from the deep end of a pool and dumping it out in the shallow end."
3) How much of an impact is a $150 billion handout really going to have on a $13 trillion economy? The notion that we can boost the world's largest, most dynamic and complex economy by sending out one extra paycheck to everyone seems laughable.
Once we examine these questions, it becomes clear that measures like these really aren't meant to help the long-term growth environment of the United States, but are simply attempts to score political points by pandering to ignorance. Any time you hand money out it looks like you're "doing something" and that you "care" about workers.
Unfortunately, I think it's safe to conclude that Bush's economic legacy will ultimately end up looking far more like Richard Nixon's than Ronald Reagan's, and that is a shame because when we nominated him in 2000 he appeared to many to be a true conservative.
Let's hope we don't repeat this mistake when we go to the polls next month.
Pat, I read the same blog post of Russell, but you forgot to had the best part to point #2.
"... Funny thing—the water in the shallow end doesn't get any deeper. "... emphasizing the net affect of a so called "stimulus" on the economy is zero.
2 comments:
Just from what I've read today, Bush wants to send out temporary tax rebates (not permanent rate reductions, which I'm all for because they give people more incentives to save and work). The plan is to mail $800 checks to individuals and $1600 for married couples "as quickly as possible" so we can "get this economy moving again." You can read here and here for articles that better explain this situation for more eloquently than I am about to.
The proposal begs a few questions, some of which I've already hit on:
1) Why not "stimulate" the economy all the time? Why not send out $800 checks every week of the year? Hell, why not just let Bush fly around in a helicopter and drop $1000 dollar bills everywhere? That would really get things moving, right?
2) Where is the $150 billion going to come from? Higher spending always means either higher taxes or more borrowing, so taxpayers and creditors will become "unstimulated" as a result. Money is simply being transferred from one place to another. To quote GMU economist Russell Roberts, this is like merely "filling a bucket full of water from the deep end of a pool and dumping it out in the shallow end."
3) How much of an impact is a $150 billion handout really going to have on a $13 trillion economy? The notion that we can boost the world's largest, most dynamic and complex economy by sending out one extra paycheck to everyone seems laughable.
Once we examine these questions, it becomes clear that measures like these really aren't meant to help the long-term growth environment of the United States, but are simply attempts to score political points by pandering to ignorance. Any time you hand money out it looks like you're "doing something" and that you "care" about workers.
Unfortunately, I think it's safe to conclude that Bush's economic legacy will ultimately end up looking far more like Richard Nixon's than Ronald Reagan's, and that is a shame because when we nominated him in 2000 he appeared to many to be a true conservative.
Let's hope we don't repeat this mistake when we go to the polls next month.
Pat, I read the same blog post of Russell, but you forgot to had the best part to point #2.
"... Funny thing—the water in the shallow end doesn't get any deeper.
"... emphasizing the net affect of a so called "stimulus" on the economy is zero.
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