Strengthening Constitutional Self-Government

No Left Turns

Stimulation

The Republicans can’t get all postpartisan over the stimulus package. The problem with it so far is it doesn’t do much immediate stimulating. It’s become an excuse to enact and expand various social programs over the long term, less about immediate relief and more about setting spending precedents that’ll be difficult to reverse or curb later. I’m not even against all these programs (for example, I’m for more federal spending on special education), but we can’t let ’em get away with the idea that every dollar government spends (whenever it gets spent) is equally stimulating. If we’re serious about stimulating, we got to get as much done this year as possible. That doesn’t mean I’m necessarily endorsing all tax cuts or credits or whatever. It’s no so clear, for example, a modest cut or rebate for ordinary Americans really would make much difference. (Witness last year’s unstimulating effort.) If anyone has a real plan to get investors off the sidelines and back into the risky business of buying and selling stocks, then we probably ought to go with that, among, of course, other things. Most of all, we can’t count on Obama to be smart enough to curb the Democratic Congress by focusing the effort on real stimulation, which, of course, may or may not work.

Discussions - 1 Comment

It looks unlikely that the spending will stimulate anything other than the expansion of federal government. If they really want to incentivize the buying and selling of stocks, it might be a good idea to try a 6 month moratorium on the capital gains tax and maybe a reduction in the top marginal income tax rates. This would effectively give a bunch of folks raises and lower the cost stock market speculation.

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