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By Kyle Jones
[email protected]
Staff Writer
The checks are in the mail, as they say. President Bush made it official after signing legislation to send rebates ranging from $300 to $1200 per household, as well provide tax breaks to businesses in hopes of giving the sputtering U.S. economy a boost.
According to an opinion poll by GenXFinance.com, 34 percent of those surveyed felt that the package would not help get the economy back on track, while another thirty-four percent replied that no government assistance was needed at all and that the economy should just fix itself. Only eight percent said the stimulus package would have a positive impact.
What is it about the stimulus package that has Americans so doubtful?
For starters, a few details of the plan are somewhat concerning, like the provision that allows people earning too little to pay taxes to still receive a rebate. Is this fair? In other words, how can we hand out a rebate to someone who has never paid into the tax system?
Washington is sending out these rebates in hopes that they will burn such a hole in consumers' pockets that people won't be able to resist spending them. However, there is some evidence that suggests otherwise. A recent AP-Ipsos poll found that 45 percent said they would pay outstanding debts with their rebates, while 32 percent said they planned to invest the money. Only 19 percent of those surveyed said they planned to spend their rebate checks.
If everything goes according to plan, if consumers spend the rebates as intended and businesses do indeed see higher revenues, the benefits will only be short-term. A $600 check can only last so long. Once they're all gone, consumers and businesses alike will be in just as big a crunch as before.
"This plan, under the current circumstances, will lead to inflation," said Dr. Dudley Salley, a professor of economics at the Georgia Highlands Cartersville campus, "which will ultimately off-set and even negate any immediate benefits." So while this plan would indeed stimulate the economy for a while, after a short period, inflation would set in. More inflation would mean continued rising gas and fuel prices and a deepening of the crisis of our sinking American dollar.
This plan is the economic equivalent of a caffeine rush, providing a temporary invigorating boost, but when the effects wear off, people are sure to be left feeling more sluggish and exhausted than before. This is not a healthy solution for our economy.
This stimulus plan also raises a question of funding. One wonders, with 60 percent of our workforce slated to retire and begin collecting Social Security benefits within the next eight years and with a national deficit rapidly approaching the 10 trillion dollar mark, how will the U.S. government come up with the billions of dollars needed to afford this package? Well, the same way it's sustaining the billion-dollar per week Iraq War: foreign cash.
In order to cover the estimated $168 billion cost of this package, the government will likely have to borrow more money from abroad, which will further inflate a budget deficit for which our children, through unprecedented tax-increases, will be picking up the tab.
This makes the stimulus package seem more like a loan with interest, and it places an unfair burden on a future generation that had little say in the mismanagement of trust- fund dollars by a gluttonous baby-boomer generation that's living decadently beyond its means.
"Free market economies are cyclical. Recessions and expansions are natural, and unavoidable." said Salley, who understands what Congress and the Bush administration seem to have forgotten: patience, fortitude and fiscal conservatism are what thrives the U.S. economy, not welfare.