Spending plan debate

Critiques of Spending Plan Retrace Old Debate

Excerpts:

Most economists praised the deal as a necessary effort that by increasing the public debt to put cash swiftly into the hands of ordinary consumers, could limit the severity and duration of a recession and very likely spare some jobs.

...

Another big factor is that an increasing share of goods sold in the United States are made overseas. During the 2001 recession, 18 percent of what Americans spent on food and manufactured goods was imported, according to the Commerce Department. By 2006, the share had risen to 21 percent. “A great deal of any stimulus is going to be sent overseas,” said Alan Tonelson, a research fellow at the United States Business and Industry Council, a trade association of small manufacturers that lobbies to limit imports.

...

The most fervent proponents of free markets criticized the plan as a damaging intrusion by government that incurs public debt for dubious subsidies.

“The economy is working these things out,” said David R. Henderson, a libertarian economist at the Hoover Institution at Stanford. “We’ve got the housing crisis and the subprime, and all these things take a while to settle. The government just doesn’t have the discipline to kind of let things work out.”

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“One of the factors that’s currently souring this economy is the prospect that taxes are going to be rising in the future,” said William W. Beach, a senior fellow at the conservative Heritage Foundation in Washington. “I’m concerned about the bang for the buck.”


Comments: My son and I were having a discussion about the merits of a tax rebate this morning. Both of us on on the libertarian side ... give it time and the economy will right itself. Meanwhile:

1. Will Washington ever make the tax code easier? In my lifetime?
   
2. The Steve Forbes' "fairer and flatter" idea resonates with me!
   

Flashback to 1999: New York Times: Flat-Tax Follies

The best point scored in the debate was by Senator McCain. He noted that what keeps overall rates high is the ability of powerful business groups to get tax breaks in return for campaign donations. ''Every time we pass a tax bill,'' he said, ''we add another special loophole and a special deal for the special interests.''