Economic stimulus?

Posted: Sunday, January 27, 2002

How is it that leadership on the right is able to contend a distinction for "governmentally infused cash" as anything but an "economic stimulus?" Moneys either spent as tax breaks or entitlements are both "spending" but a "jump-start" is more likely to come from the sector most apt to immediately stick that cash in the economy.

In fact, I think "the right" has this backwards! "Tax-breaks," similar to slowdowns in spending growth, are spending future tax revenue while "entitlements" are the real economic stimulus, putting the cash directly in the market. Making luxury goods "cheaper" does nothing for those in the majority who don't buy them anyway.

Increasing consumption through an increase of disposable income will increase demand for goods without borrowing, which in turn will ultimately curb interest rates making it cheaper to borrow for small business or to add capital stock!

"Boy," supply-side economics has really distorted the national perception!

John S. Sonin


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