Driving Miss Economy

Are Tax Rebates Going to Help the US Economy?

In a magnanimous move by the government in an attempt to stimulate the economy, millions of taxpayers can expect to receive a rebate check of $300 to $1500 dollars next month. The cynic in me says 'This must be an election year'. The realist in me says, to paraphrase the commercial, 'It's my money and I want it now!". Turns out the cynic and the realist are both correct.

It is my money because the government does not earn its own money. The Feds acquire their money either by printing more (thereby devaluing the dollar thus contributing to inflation and slowing the economy), or taking it from us by threat of force and prison via income taxes. Returning our money to us and calling it "rebate" is not really increasing the amount of money in the economy it is just shifting the money from the left pocket to the right pocket. As far as we the taxpayers are concerned this is not a 'rebate'; it is more like the mugger who stole our wallet returning it and saying, "Sorry, this is yours."

To stimulate the economy, the best thing the feds could do is create permanent tax cuts. These tax cuts would necessitate cuts in federal spending, and that is where our gluttonous government, collectivists, and statists rage into apoplectic dementia and babble delirium drabble like "We can't cut government spending, it's an investment in our future". Puh-lease. Government spending is always a demand for payment on you or your children's future. Regardless of what the President and all the little would be presidents say, or how many plans they pontificate, the government cannot grow an economy. Only the private sector has that ability.

Think of our market economy as a car in which you, the consumer, are driving. When comfortable with the road, you control the economy with a judicious application of gas (your demand for goods and services) and brake (your need to save for future purchases) and everything runs the way it should. Now, if we want to imagine the economy under control of the government, step out of the car and let a crash test dummy drive.