Washington’s Angle On The Tax Rebates

Posted In: Budget Deficit, China, Economy, Politicians, President Bush, Stimulus Package, Taxes

Growing up in the Chicago area, I learned early on that most people work from an “angle.” The Urban Dictionary defines this as, “A plan or way of doing something, especially making a good sales pitch, implying that the person knows exactly what he or she is doing or saying.” It seems to me Washington policymakers have an “angle” when it comes to the tax “rebate” checks as part of the Economic Stimulus Act of 2008. Washington has been quite silent when it comes to explaining where it will get the money to pay for its $168 billion “stimulus” package. It appears they want us to believe this is somehow free money. No way. Who, in this day and age, still believes in a “free lunch?” Apparently, quite a few people. Consider the following headlines:

“Free Money: Feds to distribute rebate checks to millions of taxpayers”
-USA Today, February 13

“Bush Passes Stimulus Plan, Free Money Coming Soon”
-KSPR (ABC) News (Springfield, Missouri), February 13

“Is the tax rebate really free?”

You could receive a tax rebate check for a few hundred dollars by May as part of a government effort to stimulate the economy. But is this free money really free?

Yes. The IRS says the tax rebate money does not have to be paid back. Period.

-WATE 6 (ABC) News (Knoxville, Tennessee), February 14

Oh, there will be pay back all right. Yesterday, the editorial board of the Telegraph Herald (Dubuque, Iowa) wrote “Handouts won’t help U.S. economy in long term.” Leave it to Midwestern sensibility to figure out what’s really going on with these tax rebate checks and “stimulus” plan:

OK, here’s how we’re going to fix the lagging U.S. economy — read carefully: We’re going to borrow a whole bunch of money from China and give it to Americans. Then Americans will go out and buy things, most of which will have been made in China. That’s the plan to help our economy, remember. Boosting China’s economy is just a fringe benefit. For China.

They continued:

So, the government’s solution is to encourage Americans, who spend too much and save too little, to spend more?…

We need a big-picture plan that involves something besides handing out borrowed money. The Congressional Budget Office reports the deficit for the current budget year will jump to about $250 billion after the stimulus package checks are cashed.

Giving out money we don’t have to people who aren’t saving enough as it is may be a good way to win votes. But it won’t do much for the long-term health of the U.S. economy.

Thanks guys. I couldn’t have said it any better.

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