I'll keep this post short. I was reading the other day about what some folks in Congress see as a need for another stimulus package to help pull the economy out of the current stall.
The last stimulus package cost the government $130 billion. I got my $1800 cut of that (or whatever it was). This time, they're talking somewhere in the neighborhood of $300+ billion.
Now, I'm all in favor of a stimulus package. That is to say, I'm in favor of getting back some of the money I forfeited in taxes (I'm not really in favor of that in the form of stimulus packages). But I have to wonder why the very lawmakers who are in favor of raising taxes see a potential economic benefit in a tax rebate?
If taxes were kept lower in the first place, wouldn't the impact be the same? Wouldn't the economy be healthier in the long term?
If I had to speculate as why (and I suppose I do have to as this is my blog) this logic escapes our elected officials, I would say it is essentially two-fold: (1) It is much harder to measure the impact of something like low taxes in the long term, and attribute long-term economic growth to that in particular. It is easier to show a definite cause and effect with a stimulus package and what happens in the economy 3-6 months later. (2) Stimulus packages give lawmakers the ability to "save the day" with their legislation crafted for the good of the people. Of course, if this is the case, it's really all for the good of those in power, isn't it?
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Amen to that. The "economic stimulus package" should be renamed the "ensuring our reelection package." That's all it is for and I think it is a hearty misappropriation. If the government has $130 billion dollars sitting around, why not tackle a massive infrastructure rehabilitation program and rebuild the failing bridges and sewage systems around the country? That'd be creating jobs and appropriately managing the public safety while infusing cash into the economy via small and medium sized businesses. Hmm...
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