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Morning Bell: Free Money For Everybody!!!
Posted By Conn Carroll On January 18, 2008 @ 9:06 am In Enterprise and Free Markets,The Morning Bell | No Comments
If there is one thing President Bush is good at, it’s spending other people’s money. That’s why he saw Sen. Barack Obama’s (D-IL) $250 to individuals stimulus plan , saw the Democratic Congress’ $500 for individuals offer , and raised them both to $800 for individuals and $1,600 for families . Let’s hope the Democrats simply call instead of reraising.
As the Wall Street Journal reminds us this morning , all these $250, $500, and $800 checks have to come from somewhere, and that somewhere is “either by taxing or borrowing from someone else … We are thus supposed to believe it is ‘stimulating’ to take money from one pocket and hand it to another.” Also writing in WSJ former Ways and Means chair Bill Thomas and Alex Brill identify research  showing that most rebates from 2001 were saved and not spent. The chances that Americans will save and not spend their government handouts this time are even greater, since the whole reason the economy is slowing is due to bad mortgages and credit card debt. Paying those debts down is savings and does nothing to ‘stimulate’ the economy.
Worse, Federal Reserve chairman Ben Bernanke broke his promise to remain neutral in the stimulus debate by rejecting the inclusion of pemranent tax cuts in any stimulus plan . The markets were so comforted by Bernanke’s testimony that they plunged 3 percent .
All is not yet lost. The president still has an opportunity to unilaterally spur real and permanent economic growth through a regulatory fix to the non-indexing of capital gains to inflation . A 1992 legal memorandum explains how the tax code gives the Treasury Department the authority to define “cost” to exclude the effect of inflation entirely when calculating capital gains. Such an approach would lower the tax assessed on the sale of stocks, homes, real property, and other capital assets. Such a move would immediately produce more short-term revenue to the Treasury as long-term gains were unlocked and stimulate investment.
Article printed from The Foundry: Conservative Policy News Blog from The Heritage Foundation: http://blog.heritage.org
URL to article: http://blog.heritage.org/2008/01/18/morning-bell-free-money-for-everybody/
URLs in this post:
 $250 to individuals stimulus plan: http://www.washingtonpost.com/wp-dyn/content/article/2008/01/16/AR2008011604221.html?sid=ST2008011604292
 the Democratic Congress’ $500 for individuals offer: http://ap.google.com/article/ALeqM5h19_YeGzwzlmJhx42iIA7nJF0_UAD8U8A4E80
 reminds us this morning: http://online.wsj.com/article/SB120062129547799439.html?mod=googlenews_wsj
 identify research: http://online.wsj.com/article/SB120062391662399657.html?mod=googlenews_wsj
 rejecting the inclusion of pemranent tax cuts in any stimulus plan: http://www.indystar.com/apps/pbcs.dll/article?AID=/20080118/NATIONWORLD/801180470/-1/LOCAL17
 so comforted by Bernanke’s testimony that they plunged 3 percent: http://www.nytimes.com/2008/01/18/business/18fed.html?hp
 a regulatory fix to the non-indexing of capital gains to inflation: http://www.humanevents.com/article.php?id=24521
 first cloned human embryo: http://www.nytimes.com/2008/01/18/us/18embryos.html?_r=1&ref=us&oref=slogin
 USA Today: http://www.usatoday.com/news/world/iraq/2008-01-17-baghdad_N.htm
 Tijuana Thursday: http://www.nbcsandiego.com/news/15079591/detail.html
 told Congress Iraqi national security forces will need U.S. help through 2018: http://thehill.com/the-executive/u.s.-to-help-iraq-security-for-another-10-years-says-general-2008-01-18.html
 Los Angeles Times: http://www.latimes.com/news/nationworld/world/la-fg-mission18jan18,1,5206404.story?coll=la-headlines-world
 much longer: http://www.nytimes.com/2008/01/18/us/18immig.html?ref=todayspaper
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