The stimulus sham.(Correction, Please!)(Correction notice)

ITEM: "President Bush used his final State of the Union speech to call for a quick shot in the arm for the economy in 'a period of uncertainty,'" reported CNN for January 29. Moreover, said CNN, "The White House and leaders of the House of Representatives recently agreed on a $150 billion package of tax rebates and other measures aimed at spurring consumer spending and investment--but the president warned Congress not to 'load up the bill' with other measures."

ITEM: "In a country where we are constantly lectured on the importance of saving for a rainy day," commented WKTV in Utica, N.Y., on January 18, "now the government wants" us to spend to help give the economy a needed boost.... Think of this temporary fix as a deflating balloon. The rebate would provide some air to give it a lift until other methods" are installed to tie it up."

ITEM: "Amid skyrocketing energy prices and a nationwide housing slump, President Bush is calling for an emergency plan to stimulate the economy," reported Eyewitness News on WTHR-TV in Indianapolis on January 19. Under the proposed plan, "taxpayers' would get rebate checks, money directly from the government.... Tax rebates and putting spendable cash in the hands of consumers is an idea uniting both Democrats and Republicans."

CORRECTION: With both major parties offering spurious solutions for the economy, the bipartisan fix is bound to be even worse for the nation in the long run than a partisan one. The shot in the arm that the politicians are pushing is a shot of more debt--involving the spending or rebating of money that the government does not have. All that this remedy will boost is the budget deficit.

George Mason economist Walter Williams is one who recognizes the gambit. As Professor Williams puts it: "There are three ways government can get the money for a stimulus package. It can tax, borrow or inflate the currency by printing money. If government taxes to hand out money, one person is stimulated at the expense of another who pays the tax, who is unstimulated and has less money to spend. If government borrows the money, it's the same story. This time the unstimulated person is the lender who has less money to spend. If government prints money, creditors, and then everyone else, are unstimulated."

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While some of the pieces of the stimulus package under discussion as we write are not as harmful as others--such as a proposed reduction in business taxes, albeit a temporary one--it is the "rebates" that are the centerpiece of the effort. The debate is mostly over who is to get the goodies being dealt out by the Washington spoilsmongers. Yet, the checks that finally do arrive won't stimulate the economy by creating jobs. They won't encourage more productivity or investment in the same fashion as would, for example, a permanent reduction of taxes along with a reduction in spending.