Mending the Economy (Updated)
Well, the income tax rebate has been signed into law
WASHINGTON — The stimulus law signed by President Bush on Wednesday provides what he called a “booster shot” to the economy, but the medicine might not be strong enough to ward off a recession.
The $168 billion package of personal tax rebates and business tax cuts will likely help shore up consumer spending later this year, economists say. That could minimize the pain of a possible downturn. But it won’t resolve longer-term issues bedeviling the economy, such as a free fall in home sales and prices and a credit crunch that has persisted despite aggressive Federal Reserve interest rate cuts.
I don’t believe that this quick fix will heal the problems of our economy any more than Michael Bloomberg does:
NEW YORK (CBS/AP) “ Mayor Michael Bloomberg has unleashed another flurry of jabs on Washington, ridiculing the federal government’s rebate checks as being “like giving a drink to an alcoholic” on Thursday, and said the presidential candidates are looking for easy solutions to complex economic problems.
The billionaire and potential independent presidential candidate also said the nation “has a balance sheet that’s starting to look more and more like a third-world country.”
I’ve put a few further thoughts on the economy and the rebate here.
Harnessing the combined intellectual powers of the OTB commentariat, let’s do a little thought experiment. What steps, if any, should be taken to solve the problems with the U. S. economy and why? Please keep your suggestions positive and relate means to ends.
As if on cue, the Washington Post has an article sketching the economic policies being proposed by Hillary Clinton and Barack Obama:
Clinton and Obama both promised that they would make the tax code more middle-income-friendly and would protect consumers from threats — including predatory credit card companies and rapacious college lenders. Both candidates condemned corporate tax breaks that they say send jobs overseas. Both pledged to protect homeowners and said they would repeal President Bush’s upper-income tax cuts while extending those for the middle class. Both promised to rein in credit card companies that arbitrarily raise interest rates, sending families into a downward spiral of debt.
Are these the reforms that will cure whatever ails our economy?
Other proposals in the article include
- Retaining the Manufacturing Extension Partnership
- Establishing a Financial Product Safety Commission
- Ending the carried interest loophole
I don’t see these as measures that would place us on a solid economic footing but perhaps someone can enlighten me.