I'd like
to take a break from politics and do something light about
Valentine's Day, or Presidents Day, or maybe a "coming of age"
column about my birthday next week.
Then I
read that women are dreaming about having sex with Barack Obama, and
imagined St. Valentine rolling over in his grave.
I'm told
I should honor Washington and Lincoln by buying a new car on Monday
to stimulate the economy. Swell, now I'm unpatriotic because I don't
want a new car.
As for
my birthday: I'm just grateful that I have finally reached full
retirement age so that I don't need to work in an economy that is
falling apart.
Still,
like a good citizen, I called Sen. Kerry's Washington office, but no
one answered the phone. So I called his Massachusetts office, and
the young man there seemed surprised when I asked to be recorded as
opposed. I heard that calls are running 100-1 against the plan, but
maybe that doesn't include calls to Massachusetts senators, who
consistently win re-election despite Kerry's longtime opposition to
a balanced budget amendment, and Ted Kennedy's determination to
nationalize our health care. Why would we expect them to have a
rational position on economic stimulus?
Actually, I'm not sure what a rational position on economic stimulus
looks like.
There's
the Democratic position using Keynesian economics: Just have the
government spend a lot of money, on anything, doesn't matter what,
even if the government doesn't have the money and has to either take
more from us so we can't spend it ourselves or borrow it from other
countries who no longer have it to lend.
Or, an
alternate plan: Have the government print some new money and spend
it, on anything, doesn't matter what, causing the play dollars to
drive down the value of the real thing so we'll need a lot more of
it to stay even.
The
Republican position of cutting taxes makes sense if the tax cuts
increase revenues beyond their own value, the way capital gains tax
cuts once did by encouraging investment. Otherwise, the government
just adds to the deficit, which raises taxes on our grandchildren.
It's
swell to cut the payroll tax, but aren't payroll taxes supposed to
be paying for Social Security, which is already due to run out of
money in 2041? Nice to see politicians finally admit that payroll
taxes are just part of the revenue stream, spent on other government
stuff.
On the
other hand, I don't get the argument that tax cuts won't help
because taxpayers will use the money to pay down debt or just save
it instead of spending it. Isn't consumer debt part of the problem?
Don't banks lend our savings to people who want to spend? Should
people, like the government, just spend money on anything, doesn't
matter what? Then fine, give me a tax cut and I'll buy something
made in China so that country can lend more to our government to
cover the next bailout.
But if
we don't want to "waste" the stimulus money on taxpayers, why does
the plan give an earned income tax credit to people who don't even
pay income taxes? (To spend on anything, doesn't matter what.)
The one
idea that would make sense — if the government had the money, which
it doesn't — would be repairing and maintaining existing
infrastructure, which the government should have been doing all
along. Building new stuff that won't be maintained, with money the
government doesn't have, is only slightly better than paying workers
to dig holes, then fill them in again, just to stay employed.
If the
government gives money it doesn't have to people for the specific
purpose of buying homes and cars or college classes, doesn't that
just give sellers an incentive to increase the price those consumers
will have to pay?
Then
President Obama said last month, "There is no disagreement that we
need action by our government, a recovery plan that will help to
jump-start the economy." But in several major newspapers, including
Monday's Boston Globe, there was a full-page ad paid for by the CATO
Institute and signed by economists from across the country who
disagreed.
"With
all due respect, Mr. President, that is not true," they wrote. "We
the undersigned do not believe that more government spending is a
way to improve economic performance."
So
President Obama went back into campaign mode, pitching his plan in
Elkhart, Ind., then returned to Washington for a televised evening
news conference. As reporters asked tough questions, he just kept
talking, the way people do when they don't know what they're talking
about, but figure they'll eventually hit on something that sounds
right.
If the
president's major asset was that he is "calm and mature," he now
needs a new major asset. And the nation needs an economic reality
check.
The
United States has a national debt of $10.7 trillion. This year's
deficit will add $1.2 trillion. Social Security and Medicare are
heading for bankruptcy. President Obama is right about one thing — a
catastrophe looms. His panicky "economic stimulus plan" will only
make it worse.