Tax Rebates a Political Ploy

Magically, a $600 deposit appeared in my bank account this morning. Aren't George W. Bush and the U.S. Congress great to have around?

While all of us like money from the sky, this "economic stimulus package" is going to do nothing to solve the underlying problems in our nation's economy. It's a short-term fix, and a weak one at that. Not surprising for our short-sighted and politically-motivated federal government. This rebate is nothing but a political ploy in an election year, to make voters think the federal government is "doing something." Reality paints a different picture.

This nation's economic growth in recent years has been driven to a large degree by consumer spending, which the rebates are intended to stimulate, and a grossly overvalued housing market. We don't need more economic growth by consumer spending. Why? Because it generally puts people further into debt by spending money on imported goods. We need growth driven by investment, real domestic productivity and exports.

Also, many people are applauding the Federal Reserve for lowering interest rates. Lower interest rates encourage people and businesses to go further into debt. This country does not need more debt - personal, business or government. We already have all the debt we need.

The federal government is working furiously to keep our economy out of a recession - again, for political reasons. No one wants to be in office during a recession, because after the next election, there's a good chance they won't be in office anymore. But they are doing it by going further into debt and by encouraging businesses and citizens to do the same. Sorry, but you cannot borrow your way out of a recession. Check that - you can in the short-term, but eventually your house of cards is going to crumble.

No one will admit this anymore, but a nation's economic growth cannot continue indefinitely, even in a global economy. Downturns are natural and even necessary. We are increasingly preventing economic downturns in this country through greater debt. What do we have to show for it? A negative consumer savings rate, a weak dollar, a mortgage crisis, an overvalued housing market and record federal debt and deficits. All this while our military is fighting a two-front war.

If the federal government would be going further into debt to fund the war by borrowing money from its own people - can anyone say, "war bonds"? - it would be a different story. But that's not what's happening. Our federal government is going further into debt by borrowing money - aka selling Treasury notes - from foreign governments while our citizens spend their money on TVs made in Asia. Combine this with skyrocketing energy prices and this witch's brew of economic calamity could make the late 1970s look like a picnic.

So, closed circuit to George W. Bush and the Congress: keep your tax rebates and take real steps to solve our problems or we're all going to need a lot more than $600.