Professor Williams tells us the "how" and the "why" of it.
"If we are headed into a recession, these proposed stimulus packages will make little difference. Previous experiences have shown that (1) it takes a long time to enact tax law, making it too late to prevent a recession, and (2) many people save a large portion of any tax rebate. A far more important measure that Congress can take towards a healthy economy is to insure that the 2003 tax cuts don't expire in 2010 as scheduled. If not, there are 15 separate taxes scheduled to rise in 2010, costing Americans $200 billion a year in increased taxes.
Adding to the economic effects of that tax increase are the disincentive effects of the measures that Americans will take between now and then in anticipation of those tax increases. According to economists Tracy Foertsch and Ralph Rector, making the 2003 tax cuts permanent will annually add $76 billion to the GDP, create 709,000 jobs and add $200 billion to personal income.
The call for stimulus packages represents the triumph of political arrogance over common sense. The U.S. is a massive $14 trillion economy. The size of proposed stimulus packages range from $150 to $200 billion, which is about 1 to 2 percent of our GDP. Economy-wide, that's a drop in the bucket likely to have little or no effect. Congress ought to focus on measures that create greater long-term productive incentives such as reducing corporate taxes, estate taxes and personal income taxes as well as economic deregulation."
Here's Professor Sowell's take:
"People who went way out on a limb to buy a house that they could not afford are now being pictured as victims of a heartless market or deceptive lenders.
Just a few years ago, people who went out on that limb made money big-time in a skyrocketing housing market. But now that they have been caught in the ups and downs that markets have gone through for centuries, the government is supposed to bail them out.
Solving short-run problems, especially in an election year, often means creating long-run problems. Pumping money into the economy can help many problems. but do not be surprised if it also leads to inflationary pressures and financial repercussions around the world."
That's just good, common sense economic advice, the kind that's rarely found on a national media scale, and virtually nowhere to be found on a certain local source in our blahgosphere.