Want a stimulus? Cut taxes and spending!
posted at 12:40 pm on October 13, 2008 by Ed Morrissey
Earlier this year, Congress passed a “stimulus plan” that consisted of sending a small part of our own money back to us in hope of boosting the economy. One might have thought that conservatives would have used that as evidence that the best way to stimulate taxpayers would be to take less taxes in the first place, but apparently we’re still content to fight on populist turf instead. Yesterday, House Minority Whip Roy Blunt said he’d consider a new stimulus package pressed by Democrats:
House Minority Whip Roy Blunt (R-Mo.) on Sunday indicated that he is open to working on a second stimulus package as long as it “makes sense.”
“But let’s not use the stimulus package as an excuse to do what Democrats have wanted to do from day one of this Congress, which is a huge public works plan,” Blunt said on ABC’s “This Week with George Stephanopoulos.”
House Financial Services Committee Chairman Barney Frank (D-Mass.) said Democrat would do a second stimulus that will “give the middle class and the average citizen the same kind of relief that we try to give to the financial sector.”
Good grief. Did the first stimulus package work? Did I miss the massive growth and surge in employment that it created after checks went out in the spring? Michelle Obama ridiculed it as nothing more than the price of a new pair of earrings, which got some criticism but has some truth to it. The stimulus had no impact other than to cover for the high-spending Congress.
Now, Democrats want another stimulus package to go with the massive bailout that taxpayers will fund for the government’s role in distorting the lending markets and crashing the global financial system with fraudulent government-mandated securities. In other words, we have to spend money in order to justify spending money. That only makes sense in the heads of DC politicians with little connection to reality.
I don’t mean to criticize Blunt too harshly, as he has been a good voice for rational policy overall, but he completely surrenders on this point by acknowledging even the legitimacy of this thinking. Government can best stimulate the economy by burdening it less. Reduce taxes and regulation, stop distorting private markets in order to impose social policy, and cut back significantly on spending; those solutions will stimulate the American economy much more quickly and efficiently than laundering overpaid taxes through the federal bureaucracy.
Put it this way: does it cost more to take money from taxpayers and then pay bureaucrats to filter it back to us, or just leave it in our pockets in the first place? And which option gives taxpayers a rational way to predict how much money we’ll get to keep in the future, so we can plan for investments in the economy?