Random Spending Sold As Stimulus Plan

When Congress and President Bush decided in February that the sluggish economy needed to be goosed with a stimulus package, many economists were skeptical. The business investment incentives in the measure were applauded. But history suggested that the centerpiece of the $168 billion plan — rebates of $600 given to most single adult Americans and $1,200 to most couples, provided they filed 2007 tax returns — just wasn't a good idea. Previous rebates had been used more to pay off debt or add to savings than on the retail spending envisioned by the plan's authors. So why pile even more debt on the $9 trillion mountain we are already leaving our kids and grandkids?

No one listened. Now, six months later, this skepticism has been vindicated. Retail spending increased by just 1 percent in April and May, after the rebate checks began arriving. It appears as little as 10 percent of the money was spent promptly on consumer goods, as lawmakers expected.

This experience should have chastened Washington and reminded leaders to skip gimmicks and stick to basics — low tax rates; limited but smart regulation; incentives to promote job creation, research and development, investment; promotion of international trade. Instead, House Speaker Nancy Pelosi, D-San Francisco, now wants another $50 billion in "stimulus."

But Pelosi's plan, and a similar one touted by Sen. Robert Byrd, D-W.Va.,is even more nonsensical than the February package.

Rebates to individuals would be only a minor focus in favor of billions of dollars in spending on infrastructure, such as highway and water projects, as well as billions for natural disaster aid and an extension of unemployment benefits.

In other words, Pelosi and Byrd seek a near-random collection of spending measures, all made more palatable by describing them as a stimulus package. What's next? Will earmarks be billed as "microregional stimulus initiatives"? Will proposals to add Medicare benefits be called "health-sector stimulus ventures"? If any government spending can be depicted as crucial to a healthy economy, watch out below. America's plummet to the bottom will be abrupt.

Treasury Secretary Henry Paulson has to understand the absurdity of this approach. Yet this week he said for the first time that he is ready to work with Congress on its new stimulus plan. The fact the plan defines "stimulus" as government spending of any kind doesn't seem a concern.

This is no way to run a country. The 2009 budget deficit is forecast to be a staggering $482 billion, and would be far higher if so much military spending wasn't arbitrarily uncounted. The baby boom retirement avalanche is just getting under way, with devastating implications for the cost of retiree benefits. The need for sober, sound economic policies could not be more obvious.

Instead, like banana republic dictators, our leaders think the answer to our problems is just to print more money. Americans deserve much better than this.

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