A repository of John's recommended Wall Street Journal articles.
Monday, February 18, 2008
WSJ.com - That 'Stimulus' Nonsense
What are we producing when we rob Peter to pay Paul?
Bipartisanship, a notion that stands as anathema to our basic political premise of checks and balances, has resulted in a stimulus package that will do enormous damage to the U.S. economy.
The net effect is that the reduction in demand from those who pay the real resources will be exactly the same size as the increase in demand from the rebate recipients.
And, as fate will have it, any rebate will reduce output because it reduces incentives to produce output. The larger the rebate, the greater the reduction in the incentives to work and the greater the reduction in output. It's as simple as that. This $170 billion rebate camouflaged as economic stimulus will deal a serious blow to the economic health of the country.
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