Senate Democrats are playing rank politics with the so-called “stimulus” package right now. Good for them. This may be the first time that cheap leftist political grandstanding actually could help the country.
The stimulus package seemed like it was on a fast track to becoming law more than a week ago, with House Democrats, House Republicans and President George W. Bush coming to a rare agreement.
The main components of this spendthrift bill were well reported: A $600 tax “rebate” for each taxpayer, plus another $300 rebate per child, with the payments being phased out for higher-income people. A few items of business tax relief were thrown in, bringing the total price tag to a whopping $146 billion.
Senate Democrats countered with a package of slightly smaller rebates — $500 per taxpayer, with no high-income phase-out — but they ran up the cost to $157 billion with other add-ons.
As The Associated Press explained last week in an article headlined “Politics creeps into stimulus deal,” the goal of the add-ons is “to make Republicans cast tough election-year votes on whether to add checks for disabled veterans, the elderly and jobless workers.” The politicking has delayed the bill’s progress significantly.
If the Senate leaders cannot pass their additions in one big package, they vow to do so piecemeal through a lengthy series of procedural votes. Any changes, of course, will force the whole bill to be reconsidered by the House and approved by President Bush. The longer this goes on, the greater the chance for the whole thing to fall apart.
In truth, no result could be better. The whole enterprise is misguided. It’s the equivalent of diagnosing a patient with a bad head cold and treating him by giving him the flu. The problem with the economy isn’t a lack of government borrowing from the future in order to hand out checks today. The problem is that government overspending has been crowding out private investment, all while a deliberate policy of weakening the dollar has reawakened inflation.
The stimulus package, especially when combined with the suddenly loose-money policies of the Federal Reserve Board, will only exacerbate those problems.
The best solution would be for Congress to do nothing at all, and let the economy adjust on its own to the Fed’s already aggressive efforts.
Adding to government debt, on the other hand, is bad medicine no matter how it’s sweetened with election-year rhetoric.