The Bush Stimulus and Tax Rebate Package

The Bush stimulus and tax rebate package: There are serious worries that the American economy may already be in a recession pattern. Today, according to a Bloomberg.com article, President Bush proposed a $150 billion dollar stimulus plan. This plan is intended by Bush to be a temporary boost for the economy, rather than a permanent tax cut. The Bloomberg article noted that Bush believes the stimulus package would be about one percent of the gross domestic product.

It is believed that the stimulus plan would put roughly $800 immediately back in the pockets of American taxpayers. Bush hopes this money will be spent in order to boost the economy.

Reuters.com reports that Federal Reserve Chairman Ben Bernake supports such a stimulus package. According to the Reuters.com piece, "Bernake told a congressional commission he supported the idea of a short-term fiscal stimulus measure." In fact, as Reuters reports, a day before President Bush proposed his plan, Chairman Bernake stated that a stimulus proposal should be in the range of $100 - $150 billion dollars. He further stressed that any package be designed to "kick in quickly." Otherwise, the package wouldn't do much to help.

Nearly all parties agree that a stimulus measure must be immediate and temporary - a boost to the economy rather than a long-term fix. In fact, most believe that the government would be unable to sustain anything long-term due to the increase in national debt. Tony Fratto, White House spokesman noted, according to the reuters.com article, that, "the most important thing is that they should be temporary, they need to be effective, they need to be things we can get done quickly."

The stimulus package will likely be supported by Congress, who also realize that something must be done quickly to support the sagging economy. Reuters reports House Speaker Nancy Pelosi stated that, "we have every reason to think, to be hopeful . . . that we can get this job done." That report indicated that congress believes that a plan can be hammered out between the president and congress by mid-February.

The stimulus package is something that is desperately needed for the economy. Fears of a recession tend to increase behaviors that will lead to a recession. President Bush's plan to put money back in the pockets of taxpayers should help boost the economy by getting them to spend the money, thus supporting the economy. KSL radio in Salt Lake City, Utah questioned people on the street, asking what they would do with an $800 stimulus payment. Despite the fact that most stated that they would save it, recent history shows that Americans tend to spend rather than save. Thus, despite what they tell pollsters or the man-on-the-street interviewer, the return of $800 will likely be spent, and thus temporarily boost the economy.

Despite any short-term stimulus package, the economy will need long term help. There are not many reports of long-term plans in the works. Hopefully, the temporary stimulus proposal indicates that those in Washington are working on long-term plans to help the economy avoid a recession.