Will the Stimulus work?
I don’t think so. Not the way it’s written by the Dems.
Obama’s Making work pay is an end of year credit attached to the tax refund, alomst like the one they tried last year, the one that did not work. A tax credit will not stimulate the average consumer to spend more overall. It’s a one time pop, that I know I will be using to pay bills. A lot of people will be paying bills with their tax refund. It won’t make me want to spend more money over the course of the year, which is what the economy will need to get back on track. My one time pop will not cause Best Buy to hire hundreds of workers, nor will Sam’s Club be hiring just for my tax refund check.
What we need is a lowering of the tax brackets. Giving me an extra $50 – $100 dollars bi weekly will cause me to spend differently. It will cause me to spend more, as I’ll have more disposable income. Of course common sense like that goes out of the window, since Pelosi think Planned Parenthood will stimulate the economy.
Rep. Eric Cantor (R., Va.) misspoke earlier today when he said that the Democrats’ bill contains $4 in spending on landscaping for the National Mall for every $1 in small business tax relief. In fact, it contains $5 for landscaping the National Mall for every dollar in small business tax relief.
Deficit spending is not the answer. Government cannot grow money. It has to be printed. Printing more money to spend will only lead to inflation. Any raise in inflation rates will kill any stimulative effect the bill has. It’s very simple even a Democrat can figure it out. You can give everyone an extra $500 but when the price of bread, milk, and meat goes up and extra $0.50 over the course of the year, that person is even more screwed than if you didn’t give him that $500. Of course logic has no place in Reid’s Senate or Pelosi’s House.
Obama’s new chairwoman of the Council of Economic Advisors, Christina Romer, is among those skeptical of the idea that it does. In 1994, Romer co-authored a technical 72-page economics paper titled “What Ends Recessions,” containing specific warnings about the limitations of deficit spending in saving the economy. Her conclusion: “Although there is substantial variation in the estimates of policies’ impact, the results suggest that monetary policy has been crucial in ending recessions, while fiscal policy has contributed very little.”
Republicans need to stick to their guns. It’s a fine line they have to walk, I don’t know if they can pull it off. If they can pressure Obama into changing the Stimulus into something that might actually stimulate the economy, we might get out of it in 2 years. Otherwise, while we will be rid of Reid and Pelosi in 2010, we will all be too fucked to care.