Voodoo economics

Wednesday, January 30, 2008

When it comes to dealing with recession, our political leaders appear to be quacks, resembling the healers of a past time who used leeches to extract impurities from the blood and incantations to ward off evil spirits.

The fear of recession has the Bush administration proposing a stimulus package of tax refunds that would be spent by consumers, creating demand for consumer goods and thus stimulating production.

Some would like to see a rebate given to the poorest of the taxpayers. It has even been proposed that money should somehow be distributed to people too poor to pay taxes, the reasoning being that poor people spend their money faster than wealthier people, thus providing a more immediate stimulus.

This is the opposite reasoning that the Bush administration has used throughout his presidency regarding the economy. Bush previously advocated tax breaks for the rich because they would invest much of the money, providing capital for businesses to grow and employ more people.

Which philosophy is valid? No one seems to really know. One thing that is known is that it is irresponsible for the government to spend money that the government doesn't have.