Daniel Gross on
Slate had a fine point about the
economic stimulus package passed through Congress today and, baring any major setbacks, in our mailboxes in May sometime. I thought it was worth sharing.
Of course, there's no guarantee that American will turn their 2008 rebates into consumer activity instantaneously, or in six months. The only way to do that would be to make the rebate something more like a reimbursement. Require taxpayers to collect $300 worth of receipts from the Cheesecake Factory, Target, and Dick's Sporting Goods, and then mail them to the IRS order to receive a rebate. That would certainly be a backward way of boosting the economy. But it would be perfectly in keeping with Washington's general approach to managing the nation's fiscal affairs.
Daniel Gross on Slate had a fine point about the economic stimulus package passed through Congress today and, baring any major setbacks, in our mailboxes in May sometime. I thought it was worth sharing.
5 comments:
The whole stimulus is interesting since it's deficit spending. Gross' point seems good on paper, but it reminds me of the way UPC works. You buy the thing, they reimburse you, even with big purchases. If people could be out spending the money, I wonder if they wouldn't already be?
Did I tell you that was my favorite comment ever written by a prof on my essay? .... ? I guess I must have!
Glad to be seeing you guys in SoCal soon...
-M.
Most Americans spend money they don't have now anyway, and I think this package is more or less trying to encourage people to keep it up so our economy will stay healthy.
I don't have a great grasp on economics, but it's always seemed like a lot of smoke-and-mirrors and silliness to me.
Anyway, Mish, I've never heard that before but I'm glad that it brought back a good memory for you. :)
yes, econ is often challenging for me to grasp---and for all of its explanatory power, the world still has struggling economies in the developed world, which would suggest it's "economics is as plain as the nose on your face" approach (at least in the univ.) might be a bit disingenuous.
That said, I think the long term solution would be to embrace the fact that, for now, we have a devalued currency, and attempt to seize the potential long-term gains from that---namely the ability to increase our export industries (since our products would be relatively cheaper on the global market). To that end, I'd take those "credits" and apply them back to producers instead of consumers to encourage investment in industry. That way you are both encouraging additional spending in the economy (as businesses take out loans for supplies, machinery, etc.) AND you'd hopefully start developing some comparative advantage in additional services (likely in tech. or financial services (obviously anything capital-intensive)) which would benefit you in the long run.
Not surprisingly, Congress has opted for the more popular way of getting more $$ into the economy (to provide it to consumers). But, as in most matters of fiscal/monetary policy, that which is most POPULAR is usually only the short term semi-fix.
I'm sure the Qualle family would agree that this is one argument for reducing gov't influence in most things economic, and allowing the FED to take up these matters more independently. You've gotta be careful about playing with economics to please the masses---too many concessions and you've got Latin America! ;)
Just my two cents....
-M.
And yes, as a young whippersnapper (?) in college I worked on a paper on the role of the biblical father in Rappaccini's Daugther (by Hawthorne). My prof and I had many discussions on whether or not my paper could actually work and after canning the first draft of lots of pages (painful), I turned in a paper that received the one comment I'm most proud of in my collegiate experience.
"Touche."
Oh the days when professors were more effusive.....blasted courses this quarter.
-M.
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