After many years of solid growth, produced, in no small measure, by George Bush’s tax cuts, the economy burped, in part due to foolish borrowing practices. Comes now the President, in conjunction with the Democratic Congressional leadership, to propose a "solution": borrowing another $150 billion to "cut taxes", despite the fact that for tens of millions of the beneficiaries of this largesse, they paid no taxes to cut.
Such "stimulus" we could well do without. Indeed, it sounds uncomfortably close to "fiscal restructuring": spending money we don’t have and sticking our kids with the bill.
While $150 billion is hardly chump change, in the context of our national economy, it amounts to about 1%. The idea that borrowing $150 billion and handing out checks will somehow jump start the economy rests on a very thin reed.
As importantly, for what possible reason is a Republican resurrecting the tired and discredited Keynesian notion that government, through borrowing and spending, can somehow regulate the economy? Perhaps Bush holds out found hopes of being considered in the same breath as that noted fiscal expert, Richard Nixon – "we are all Keynesians now" – the last truly economically disastrous Republican President.
It’s simply not possible to flatten out economic hills and valleys, but it is possible for government to produce the proper environment for long term, sustained growth and prosperity: sane, stable fiscal policy, low taxes, few regulations (and those designed to ensure transparency, not eliminate risk), etc. The entire country benefits from rewarding savings, encouraging growth, building the economy. Any attempt to borrow, tax, and spend one’s way to prosperity is doomed to failure.
Indeed, the very premise of this huge welfare program rests on a lie: that it’s better to spend the money now than to save it. Precisely the opposite is true. Instead of encouraging spending, the government should be rewarding savings and investment.
Just because the Dems love to hate Bush – displaying more than their typical irrationality – such does not mean the conservatives need to rise to his defense when he proposes a muddleheaded disaster such as this. Truth be told, Bush has been a major disappointment on spending since his election, presiding over massive spending hikes which produced gargantuan deficits. Only the fact that the Democrats now controlling Congress have proven exponentially worse makes him look good by comparison.
Indeed, the hypocrisy of the Left knows no bounds. Here in NJ, Jim McGreevey, for instance, rode into office after a campaign (quite properly) excoriating Christie Whitman for her borrow and spend policies, promising fiscal responsibility, and expressly abjuring any new taxes. The curtain had not closed on the last voting machine before he and the new Dem legislative majority embarked on an unprecedented and shameless tax, borrow, and spending spree, proving for all time, one would think, that Democrats cannot be trusted to be truthful on matters fiscal. But, alas, the voters have, heretofore, proved uneducable. They elected Corzine based upon his promise to increase rebates and cuts taxes. True to Democratic form, he eliminated rebates and massively increased taxes. Now, he wants to indebt the state for the next 75 years to pay for yet more spending.
When the Dems took control of Congress, they did so on a platform of fiscal responsibility: cutting earmarks, deficit control, "pay-go", etc. Surprise: not a single one of those promises remains intact. Now, they combine with the President to offer an election year gift to millions of voters, akin to NJ’s rebate scam: using borrowed money to bribe voters.
Just as Corzine promised "no more borrowing without voter approval", only to break that promise within about a week (with his promise to waste another $2.5 billion kowtowing to a Supreme Court ukase on urban school construction), so, too, the Congressional Dems solemnly promised not to increase spending without either raising the taxes necessary to pay for it or cutting other spending. But when they wanted to cut taxes (!) through AMT "reform" (which really isn’t), they refused to cut spending to match, bloating the deficit by tens of billions. Now, they propose to hand out one-shot welfare payments to 35 million non-taxpayers, swelling the deficit by $150 billion more. They will pay for it … by handing our kids an IOU.
Typically, real taxpayers get kicked in the teeth. Those who actually pay taxes, because they make money, will see their rebate payments cut if they have the temerity to earn more than $75K per annum. Yup. All those "rich" NJ cops, teachers, and firefighters will, once again, be denied the rebate that everyone else gets.
Any New Jersey Congressman who supports this profoundly anti-NJ proposal ought to be indicted for gross malpractice.
Why any Republican would support this fiscal insanity stains credulity.
And, again, the only saving grace of this program is, if the Dems had their way, it would be exponentially worse, increasing unemployment insurance payments and other governmental spending programs.
Handing out other people’s money NEVER constitutes good economic policy, and it improves not in th least when one of the chief scriveners happens to be a Republican. Monetization remains a bad idea, despite Bob Franks’ endorsement; borrow and spend remains a horrible idea despite George Bush’s imprimatur.
This "stimulus" program represents exactly what we’ve come to expect from economically illiterate leftists. Bush would be well served to pull a Miers, recognize the mistake, and propose policies to cut spending, cut taxes, curtail borrowing, encourage savings, and support economic growth.