Political analysis
The Great Ecconimic Stimulous Package Scam
- By James Fish
- April 27, 2008
In May, taxpayers will be getting ‘free’ money from Washington in what is called part of an “Economic Stimulus” package. It’s a great scam, give taxpayers back some of their own money and get political brownie points with the electorate. It may be nice to get the three to 18-hundred bucks, but it is ‘chump change’ in the broader picture. It’s a placebo to quiet growing anxiety over the economy.
This is a return to the old style Keynesian economic theories of the New Deal. They didn’t work then and won’t work now. Keynes theories have been replaced by the Chicago School of Economics based on the work of Friedrich Hayek.
They laughed at the “Laffer Scale” but the Reagan administration’s derided tax cuts raised federal revenue from just over 500-billion to almost a trillion dollars during Reagan’s term in office. That was more that enough to cover his military build up, but the Democrat controlled congress went on a spending spree and the deficit soared. The big spenders were in denial, they blamed the tax cuts for the deficit instead of their throwing money at every problem, real or imaginary.
Reagan agreed to one tax increase after the Democratic Congressional leadership agreed to cut spending two dollars for every dollar of tax increase. That promised was typical political ‘bovine scatology’ Tip O’Neil and friends continued spending like there was no tomorrow. Tomorrow came with the Republican takeover of Congress during the Clinton administration, but politicians never learned their lesion. Republicans turned out to be as big or bigger spenders then the “Tax and Spend” party they replaced.
The fact is cutting the marginal tax rate stimulates the economy. Even President John F. Kennedy realized that. The problem is it’s easy to demagogue it as “tax cuts for the rich” although the poor don’t pay income taxes. They get screwed by payroll and other taxes, not the income tax. The bottom 60 percent of income earners pay only four tenths of one percent of all income tax collected by Washington. You can’t cut taxes of some one who is not paying any income tax.
*How can you tell when a politician is lying?
Their lips are moving.*
The economy is experiencing a downturn right now. It’s part of the economic cycle that we have experienced ever since the country was founded. It is not yet a recession, which is defined as two consecutive quarters of economic contraction. That doesn’t keep the “loyal opposition” from claiming we are in one. Panic sets in and money flies out of the empty treasury.
The Sun doesn’t rise. The horizon falls.
“The deficit is bigger then ever” the opposition cries and in dollar amounts they are right. The problem is “sound as a dollar” isn’t what it once was. Prices are not rising; the value of the dollar is declining. Nixon took us off the Gold Standard. Now we are on the ‘Tinfoil Standard’ headed towards the ‘Ball of String’. We live on ‘Fiat’ currency, barely worth the paper it is printed on.
“There are lies, damn lies, and statistics” Benjamin Disraeli
Anytime politicians cite statistics to prove their point, be afraid, and be really afraid. We are in the heat of the political season and the political class will say anything or spend everything to get votes. The so called “Economic Stimulus Package” is no more that a bribe, politicians whoring after your vote.
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