Economic talk may be shortsighted (02/12/2009)

To the editor:

I constantly hear the President in the news saying that we must pass the stimulus bill or the nation will be faced with catastrophe.  Could we please define catastrophe?  His own economic advisors claim if the government were to do nothing, unemployment would hit 9 percent.  In the 1980's, unemployment peaked at 10 percent, thus this is not the worst recession ever, yet. 

In the 1980's Ronald Reagan didn't get on the podium to complain about what was handed to him or push a radical agenda; rather he responsibly tackled the problem with resolve.  He did so by reducing the size of government and lowering taxes, thus leading America into a time of economic prosperity.

I cannot help but laugh at the prospect of government spending money wisely on anything.  I mean, look at the bang up job on Social Security, Medicaid, and Education. 

Now I am not without compassion for those who have lost their jobs.  It is not their fault, and I am sure many would love to be working again.  Thus some government spending to extend unemployment and the likes has its purpose in the stimulus, but we need to get these people back to work.  $142 billion for education will not stimulate the economy.  The U.S. already spends more per capita on education than any other country in the world, despite one of the lowest rated programs.  Fixing the education system would do a lot more than just throwing more money at it.

As I interpret and understand the stimulus package before us, I quickly realize the weakness in the Democrat ideology.  Big government spending has never once in history worked, and you can thank World War II for ending the Great Depression - not the New Deal.  More recently, Japan responded to its 1990 recession by passing 10 "stimulus bills" over the last 8 years (building the largest national debt in the industrialized world), and their economy remains stagnant.

As mentioned by Dick Morris, a former Clinton advisor, the American public knows the difference between a fan and a strong wind.  One is temporary, and the other is a true climate change.  If I am someone secure in my job, the most I will get is a $500 "stimulus" check.  That is going right to the bank.  If I am out of a job, the government will pay my unemployment, but that will only help me squeak by until companies hire again.  However, if I am secure in my job, I have a tax cut guaranteed for years, and I know that I have a sustained extra $100-plus a month coming in, I can now spend that money.  My spending will create demand, demand will create jobs, and jobs will create more demand.  Thus, those without a job will now have a job.  Government doesn't create jobs, companies create jobs.

The best part of a tax cut is that a 10 percent reduction in all federal tax brackets would cost half of what the present stimulus bill will cost the American taxpayer. 

The current stimulus is the same as borrowing $10,520 from every American household.  If we truly want to fix this current economic downturn, we need to embrace history, and knowledge of economics.  We need to improve the incentives that drive economic activity, and that means reducing tax rates on work, saving, investment, risk taking, and entrepreneurial activity. 

Otherwise, we are faced with a growing government, which was too big to sustain even under good economic times.  

We do not currently have a lack of credible alternatives to the present stimulus bill, but a Congress and President able to use fear to push its spending agenda (pork) for the next 40 years. 

Matt Minnich

Portland

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