Stimulus not very stimulating for a country in debt

Kirk Caraway
Nevada Appeal News Service
January 27, 2008, 4:01 AM

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Hey, looks like most of us will be getting a late Christmas present from Uncle Sam, some money for us to go out and spend to "stimulate" the economy.

Someone must have been getting stimulated on something else to come up with this scheme.

Don't get me wrong. It would be nice to get a check back from Uncle Sam. It's been quite a while since I've seen one of those in my mailbox.

But where is this check coming from? The federal government is up to its capitol dome in debt.

Of course, they are borrowing the money, to send to you and me, so we can buy beer and big-screen TVs.

I understand the whole Keynesian economic thing. If the government gives out a bunch of money to people who will spend it, the economy can get a boost, hopefully enough to save us from the recession that is bearing down on us like a grizzly on a spawning salmon.

But in this case, we are talking about an economy whose problems come from debt.

The housing bubble has burst, and the result is a tsunami of bad debt washing through the financial markets. Americans as a whole spend more than they make. Millions of homeowners gambled on rising real estate prices, and treated home sweet home like an ATM machine. The Bush administration has redefined the concept of reckless overspending as the national debt inches toward $10 trillion. And our appetite for foreign goods has pushed the trade deficit to record levels.

For every problem, the solution we have followed is to borrow more money. At some point, those debts come due, and the party is over.

But instead of buckling down to pay the piper, our political leaders seem to think the solution is to find a loan shark to give us more money to keep the party going.

This tax rebate is insanity being packaged as meaningful policy, propagated in bipartisan fashion by politicians worried about losing their jobs come November. It's a short-term fix that is likely to make the long-term problem even worse.

And after this giveaway is done and the economy still is broken, what will the politicians do then? Borrow more money?

One problem with economic stimulus packages is they are temporary. The government borrows money and pumps it into the economy when times are bad, and pays back the debt when times are good.

But as we have seen in recent years, getting politicians to pay back that money is like getting kids to eat their vegetables. They just keep spending, because it makes the economy look even better, and it's good for votes. They've created a virtual junk food economy, where we overdose on chips and candy until we become so bloated we can't get up off the couch.

If we must have a stimulus package, can't we get one that has some lasting effects? One thing the government hasn't spent a lot of money on for a while is infrastructure, things like roads, bridges, schools, water and sewer systems, and the power grid. Instead of just handing out money to people to spend on stuff made in China, how about we actually fix some of the things we depend on here in the good ol' USA? Heck, you could even spend the money building that wall on the Mexican border that all the right wingers are drooling over. At least the money would stay in this country, and we would have a monument to how it was spent.

So America, prepare to get stimulated by your stimulus checks. But remember, it's really just a loan that your grandkids will be paying interest on after we are all dead and gone. You might want to spend it more wisely than the way it is being given to you.



• Kirk Caraway writes for Swift Communications, Inc. He can be reached through his blog at http://kirkcaraway.com .