U.S. Economy Has Shotgun Wound / Pres Bush Prepares Band-Aid

By now, you've heard of the stimulus plan from the Bush administration (apparently, everyone in Washington DC got together and decided that all the economy needed was a little stimulation). From the AP-

President Bush, acknowledging the risk of recession, embraced about $145 billion worth of tax relief Friday to give the economy a "shot in the arm. "

Bush said such a growth package must also include tax incentives for business investment and quick tax relief for individuals.

The big sell of this is plans for tax 'rebate' checks (advances?) which may be mailed out this summer. Speculation is that "taxpayers could get rebates of up to $800 if single, or $1,600 if married." What a brilliant, nuanced plan... throw more $$ the government can't afford at people and hope that they forget about the actual issues (home foreclosures, weak dollar, low job growth, etc) that have lead to an economic downturn.

Frankly, this is like something a child would think of. I envision this discussion-

Aide: "Mr. President, the economy is in big trouble, we need a nuanced, targeted, and aggressive fix to these problems!"

President Bush: "Give peoples some moneys. Then they be happy and buy a toy!"

I am reminded of a plan Senate Republicans floated in 2006 to give everyone $100 gas rebate checks as a way of buying off disgruntled voters solving the oil problem once and for all. Even conservatives told them to fuck off. Anyone want to guess how this similar proposal to a more complicated problem(s) will be received?

Via Yahoo Finance, here's the stocks greeted this news yesterday-



(Over in Asia, they received the news with the exact opposite reaction.)

And while the President is planning just to cut everyone a check and call it a day, Congress is thinking bigger-

While Bush focused solely on taxes, Democratic and Republican leaders in Congress have been working on a broader package that also would include a temporary increase in food stamps and an extension of and perhaps increase in unemployment benefits.

Still, there have been rumors that Republicans will hold any package hostage unless Democrats agree to make permanent the Bush tax cuts. Some are now saying the GOP will back off on this for pragmatic reasons, but I am not so delusional.

Personally, I would decline an $800 check in exchange for a smarter President.