Reason Online: "Bogus politics of the stimulus"

The other dimension of this question, of course, is that the proposed tax rebates will put some money in my over-taxed pocket. At least that money won't be spent on whatever nonsense the government would spend it on. True, "economic stimulus" doesn't really help the economy in the long run if it just increases the deficit, but who says anyone has the political will to pursue a sensible alternative? The politically feasible alternatives could be worse.

[...] Steven Wieting, an economist at Citigroup, predicts growth of 1.2 percent. But like our elected officials, he sees no point in getting hung up on technicalities. "Academic definitions aside, we'll call that a recession," he writes in a new report. We can call it a recession or we can call it a wirehair terrier, but that won't change what it actually is: an expansion, albeit a modest one.

Notwithstanding that, President Bush and House leaders have agreed to pelt the economy with $150 billion in rebates and business tax incentives to rouse it from its lethargy. The idea behind the rebates is that consumers will use the cash to buy goods and services, keeping companies and workers busy supplying them. Business tax incentives are supposed to goose investment in plants and machinery. The two sides are agreed, in the mantra of the week, that these measures will be "timely, temporary and targeted."

In their dreams. Timeliness, in this case, is not unlikely—it's impossible. The Internal Revenue Service, it seems, is fully occupied at the moment sending out tax forms and processing returns, and will be for a while. So even if the program zips through the Senate, the checks probably won't go out until June and won't all reach the beneficiaries until August. The money itself will take months to be spent, if it gets spent at all -- postponing the intended boost until next football season.

If a recession is already underway today, it could very well be over by then. This is the equivalent of a doctor telling a patient that she may have pneumonia and promising to put her on antibiotics—in October. [...]

Good image, but what about an antibiotic voucher with a high cash redemption value?

Crossposted on Soccer Dad

Tags: economics, stimulus, tax rebates