Necessary Stimulus?
The economy is on the front pages of newspapers and at the top of most newscasts nowadays (at least it has replaced Britney Spears’ misadventures). President Bush and Congress agree that a so-called “stimulus package” is necessary, but each have their own ideas on what the package should contain.
Unfortunately, election time is known in Washington as the silly season and from an economic standpoint (as opposed to a political one) a stimulus is at best economically unnecessary and at worst harmful. Robert Samuelson writing in the Washington Post and argues, quite correctly in my opinion, that much of what passes for economic commentary these days is simply hysteria.
Steve Stanek of the free market Heartland Institute also criticized the idea of a stimulus, writing “lawmakers should rein in federal spending and approve long-term tax reductions that apply to everyone, not just to people in certain income brackets.”
I agree 100% with Stanek. Temporary stimuli are not what the economy needs. Rather, making President Bush’s tax cuts which are set to expire in a few years permanent would be a good first step. Slowing government spending growth would also be better than what this stimulus amounts to which is the economic equivalent of simply dropping money from the skies.