Driving Miss Economy

In a magnanimous move by the government in an attempt to stimulate the economy, millions of taxpayers can expect to receive a rebate check of $300 to $1500 dollars next month. The cynic in me says 'This must be an election year'. The realist in me says, to paraphrase the commercial, 'It's my money and I want it now!". Turns out the cynic and the realist are both correct.

It is my money because the government does not earn its own money. The Feds acquire their money either by printing more (thereby devaluing the dollar thus contributing to inflation and slowing the economy), or taking it from us by threat of force and prison via income taxes. Returning our money to us and calling it "rebate" is not really increasing the amount of money in the economy it is just shifting the money from the left pocket to the right pocket. As far as we the taxpayers are concerned this is not a 'rebate'; it is more like the mugger who stole our wallet returning it and saying, "Sorry, this is yours."

To stimulate the economy, the best thing the feds could do is create permanent tax cuts. These tax cuts would necessitate cuts in federal spending, and that is where our gluttonous government, collectivists, and statists rage into apoplectic dementia and babble delirium drabble like "We can't cut government spending, it's an investment in our future". Puh-lease. Government spending is always a demand for payment on you or your children's future. Regardless of what the President and all the little would be presidents say, or how many plans they pontificate, the government cannot grow an economy. Only the private sector has that ability.

Think of our market economy as a car in which you, the consumer, are driving. When comfortable with the road, you control the economy with a judicious application of gas (your demand for goods and services) and brake (your need to save for future purchases) and everything runs the way it should. Now, if we want to imagine the economy under control of the government, step out of the car and let a crash test dummy drive.

Other than permanent tax cuts, the best thing the feds can do about the economy is what they do best, nothing. To extend the car metaphor, imagine you are driving along at good clip when suddenly a brick wall appears in front of you. That brick wall is government economic interference at its worst: think the Jimmy Carter years or the Soviet Union just before its collapse. At its best, government economic interference is still bad. Instead of a nice smooth blacktop on which to drive, think of an old decrepit road littered with trash and potholes. To avoid damage, you and the rest of the consumers must drive slowly, performing driving acrobatics just to keep you and your car safe. The roads may become so infested and dilapidated that you opt to stay home. The economy slows and then grinds to a stop. Those government created potholes are confiscatory taxes; corporate welfare; bailouts; protectionism; trade barriers; subsidies, and a slow moving semi-trailer full of regulations and restrictions. For a glaring example of the feds economic shrewdness one only need consider the Social Security System. That Ponzi scheme is expected be bankrupt around the year 2042.

Will a rebate stimulate the economy? Maybe, (but it is still our money and we want it now). Permanent solutions however will only arrive when you contact your representatives and say-"about that economic policy thing, fix the roads, shut up and let me drive".