An Open Letter to Congress: Don't Fall for "Stimulus" Fairy Tales
In a letter sent to every member of the U.S. House and U.S. Senate, the Center for Individual Freedom (CFIF) this week joined two dozen organizations in urging caution regarding the so-called "economic stimulus" plan currently being considered in Congress.
The letter points out that "the recently announced plan has some questionable elements." For example, under the $100 billion tax rebate scheme, "even those who had no income tax burden will be eligible for checks worth $300, provided they earned more than $3,000 in 2007. These tax rebates don't create any new wealth, they simply redistribute resources that the Treasury extracted from others."
While the organizations signing the letter applauded the provisions of the plan that provide for roughly $50 billion in tax incentives for business, the letter points out that because those "provisions only apply this year simply means that many businesses will shift their future investments up to 2008, potentially leading to a slowdown of investments in 2009." The letter argues that "[c]onsistent and stable business expansion requires long-term policies, not temporary changes."
Summarizing the current plan in its entirety, the letter reads: "Despite claims by its proponents, this plan will not lead to the kind of economic stimulus that has been advertised. Congress has no mechanism for 'creating' additional wealth in America over the short term, as 1970s experiments in tax rebates and spending increases proved. This plan amounts to taking a bucket of water from the deep end of the pool and pouring it in the shallow end; the result yields neither new water nor a larger pool."