It's a Gimmick!

Question: I am curious as to your take on the new economic stimulus package in which the government is going to give out checks for people to spend. What do you think of it? Sam Borders, Dover, Deleware.

Answer: I think it is a "gimmick" that will make people think the government is doing something. I think its long-term impact on the economy will be small. Indeed, prior to the ckecks actually arriving, it may hurt the economy. Government officials have a great knack for ignoring human nature. Many people, I think, will put off purchasing items now. They will wait until their government check arrives and then use that to buy things they may have purchased earlier. Sam, the economy is really not in bad shape. The present "crisis" has been generated by the media. If they repeat something over and over -- it takes on an air of reality. It becomes self-fulfilling. If the government wanted to spur the economy by giving taxpayers money back, it would be cheaper for the government and quicker for the consumer for the government to just take X amount off of everyone's 2007 tax bill. There would be no expense of actually writing and mailing out checks. How does it make sense to send money to the government, have the government process it and then cut checks and send a small part back? Now I know some socialists (i.e., democrats) would say that that is not fair -- what about the people who don't pay any taxes? How will they get a refund? A refund from what? I think this is more of a political stimulus package than an economic stimulus package.