xml:space="preserve">
xml:space="preserve">
Advertisement

In principle, crafting a quick, temporary tax rebate for America is a good idea. In practice, it may turn out to be a bad idea. Once Washington makes up its mind to do "something," something often turns out to be not quite what the doctor ordered. Stimulating America could turn out to be an excuse for all kinds of nutty plans that will do little for this year's economy and could hurt the long-term economy.

Some Republicans want to make the Bush tax cuts that expire in 2010 permanent. Virginia Rep. Eric Cantor wants to cut the corporate income tax rate, for crying out loud. And, as Jeff Birnbaum and Jonathan Weisman wrote in Thursday's Washington Post, "a bidding war among the top three Democratic candidates is complicating congressional efforts to produce a package that would not worsen the budget deficit."

Advertisement

The godfather of fiscal stimulus is English economist John Maynard Keynes. Nixon sure was right when he said, "We're all Keynsians now." We're Keynsians even when we don't need to be. We may not even be in a recession yet. When the economy slumps, the job of reviving it falls primarily to monetary policy and the Federal Reserve. It's true that Ben Bernanke's Fed is taking its sweet time about cutting rates. But that should change soon. Let's let the Fed do its job. If it fails, then Congress can attempt a stimulus. If this weren't an election year, would Congress be so eager to do "something"?

Recommended on Baltimore Sun

Advertisement
Advertisement
Advertisement