Rebate Still a Bad Idea
By Alan Stewart Carl | Related entries in Congress, EconomyLike everyone else, I’m not going to turn down my tax refund that will arrive this May. But that doesn’t mean I think the giveaway is a good idea. Like most economists, former Reagan and Bush I official Bruce Bartlett agrees. Writing in The New York Times, he offers a more prudent plan:
We need to stop and ask whether we can afford to spend $117 billion that the Treasury Department does not have on a program of dubious effectiveness. It simply makes no sense to send out checks to people who have no need for it as some kind of election-year bribe to vote for incumbents of both parties. That money would go a long way toward cleaning up the mortgages that are poisoning the financial sector.
Congress should immediately repeal the rebate and redirect the money that has been budgeted into a package of measures that would help the housing sector and those people who actually need assistance. The Treasury might use some of the money, for example, to enable Fannie Mae and Freddie Mac, the government-sponsored housing agencies, to buy up some of the bad mortgages, get them off bank balance sheets and help homeowners refinance them.
Of course, Congress won’t repeal the rebate. We’ll get our free money. It won’t stimulate the economy but our representatives and senators will still take credit for having “acted.”
This entry was posted on Monday, March 24th, 2008 and is filed under Congress, Economy. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
March 24th, 2008 at 9:23 am
Giveaway?! We taxpayers are the ones giving away our money to the government.
And they should use our funds to bailout failed big businesses?! Advocate Fascism much?
Instead of reducing our tax dollars by administrative costs from both bringing them in and sending them out again they should just do away with the IRS as it is now.
March 24th, 2008 at 11:27 am
Did anyone posting here give the IRS the authority to look at their 2007 tax information for any purpose other than determining their 2007 tax liability ?
Thought not.
So exactly how are they determining the size of your economic stimulus check ?
March 24th, 2008 at 1:08 pm
Neo, of course they know how much you make, how many kids you have, etc. You’re filing taxes.
But hey, if you want to write them and request they don’t look at your info, by all means.
March 24th, 2008 at 2:59 pm
Meh. It’s the least bad thing congress could do and still claim to be doing something. Besides, they’ll probably just get it back in increased taxes later. Hooray government.
The real problem w.r.t. “$117 billion that the Treasury Department does not have” is on the spending side. Until that gets fixed it doesn’t matter what we pay in taxes with respect to the debt. Increased taxes will just go to increased spending unless congress finds some courage.
This is just plain wrong: “That money would go a long way toward cleaning up the mortgages that are poisoning the financial sector.”
The mortgage problem will only “be cleaned up” once housing prices are allowed to fall. Throwing good money after bad will only prolong the misery.