Pay-Go terrorism

When you are on the wrong premise, Ayn Rand said, you will always achieve the opposite of what you intend.

The new unemployment numbers for August were released today, and they were bad enough that Treasury Secretary Timothy Geithner rushed back from vacation for West Wing meetings on what Politico reporter Glenn Thrush called “a raft of emergency fixes to stimulate the economy before the midterms.”

The premise is: government spending will cause an improvement in economic conditions in the country.

The $800 billion of government spending “stimulus” passed in early 2009 has not resulted in the promised drop in unemployment, but supporters of the policy think that’s because it was too small.

So they’re back for more.

But they’ve seen the polls that say Americans are unsettled by the size of the federal budget deficit, so they’re promising that any stimulus spending will be paid for. Congress even passed “Pay-Go” rules to ensure that lawmakers “pay as they go.”

That means every dollar in new stimulus spending has to be matched by either a cut in spending, or a hike in taxes.

The administration doesn’t want to cut spending, the whole idea being to increase spending to stimulate the economy before the midterms.

Their choices are: cut spending on paper in some way that won’t actually take effect for several years; raise somebody’s taxes; or find some tax break that was passed by an earlier Congress and repeal it, which is the same as the second option.

Do you own a business, or work in one, or are you looking for a job in the private sector?

Enjoy your Labor Day weekend.

While you’re grilling hamburgers and playing softball, the president’s economic team is going through the tax code looking for somebody to hit with higher taxes.

Sometime next week, President Obama will announce his proposal for an emergency stimulus bill, and his dutiful servants in the House and Senate might ram it through with another one of their coercive midnight votes.

No one will have time to read the bill, of course, but eventually we’ll all find out which businesses lost a valuable tax credit and which ones are going to get hit with a new or higher tax in order to offset the cost of the emergency stimulus spending.

This is not economic policy, this is terrorism.

How can a business operate in America when it is under the threat, constant and unpredictable, of a damaging or perhaps ruinous tax increase? How can anybody plan or forecast their costs and revenues? No one knows if they will be hit, or if their customers will be hit, or if their suppliers will be hit.

It is time to lock the cockpit door of the economy and kick the terrorists off the plane. America needs gridlock, and it needs it now.

The premise that stimulus spending is good for the economy has been shown to be false. The administration has achieved the opposite of what it intended. Any growth from the increase in spending is negated by the pullback caused by the fear of sudden and damaging tax increases.

Remove the fear, and the economy will improve.

Vote Gridlock for Congress in 2010.

Copyright 2010

Susan Shelley posted at 2010-9-3 Category: Uncategorized