Washington has surmised that what got us into this economic fix was irresponsible spending by individuals, banks, mortgage companies and other financial institutions.
The solution, they tell us, is more irresponsible spending.
Let’s spend money we don’t have on an economic stimulus. (Those of you who read my blog know that I believed, and still do, that the badly chosen term “Wall Street bailout: was really a much needed economic stabilization plan. It has morphed into something decidedly bigger and different than needed. There’s enough pork embedded in the plan to feed Washington for the next hundred years. So much for change.)
With the biggest deficit in history, government has decided to spend money like a drunken sailor (my apologies to sailors for this comparison). Let’s give money not to those who will save it–that won’t stimulate anything–but to those we know will spend it whether they need to or not. Let’s reward the irresponsibility of signing a mortgage by offering taxpayer assistance to those who can’t fulfill obligations and simultaneously punish those who believed the amount and type of mortgage you choose should be based on your income rather than a naive pipe dream. Let’s give money to those who don’t pay taxes and increase taxes on those who already pay the most, thus penalizing the productive sector of society.
Ironically, if you give money–though tax cuts or other incentives–to high net worth individuals, they won’t spend it right now. Despite President Obama’s efforts, the market continues to sink. Few are willing to put money into the downward spiraling stock market. New money will sit on the sidelines. So as perverse as it seems, giving money to those who won’t save it is one way to stimulate the economy.
But what would happen if government provided incentives to jump start the market? Why has nobody advocated a tax credit for those who put a positive bet on America’s future? Provide a tax credit for each new dollar invested in the stock market. You get what you reward. I’d rather see incentives for investment than unneeded consumption.
Instead, like the drunk the morning after who treats his hangover with what caused it, government has chosen to solve the problem of irresponsible spending with more of the same.
Here’s to the hair of the dog that bit you.