Pennies from Heaven
We've all been inundated with opinions, from both sides of the political aisle, about the $780 billion Stimulus Bill. President Obama signed the huge package into law this week, promising that it will turn the ailing economy around. Republicans in the House voted against the bill, but didn't have enough clout to keep it from being passed and sent to the Senate. Three Senate Republicans voted for it, providing just enough votes to keep it from being filibustered.
Okay, now that the political process has ushered the bill into law, it remains to be seen if it will in fact revitalize the economy and ease frozen credit markets. In order to get this legislation passed, Obama and his colleagues in the House and Senate, constantly predicted that Armageddon was our fate unless the government opened up the Treasury and sprinkled cash across the land, which will kick start the economy.
The right way to get money flowing is to assure people that they will have extra cash week after week for a substantial period of time. That could be done by granting a moratorium on federal income taxes for about a year. Imagine how much extra money would be in paychecks each week if there was a blank space in the federal tax deduction column on your check stub. Such an action by the government would be tantamount to giving a fat raise to each worker. When people receive a raise which they know is permanent, they generally feel confident enough to begin spending more.
The primary reason they would never suspend the federal tax is because they're afraid that once people got used to having so much more of their own money, it could lead to a violent revolution if the government tried to take it back. Keep in mind, when the first income taxes were levied it amounted to a tiny percentage of earnings. Over the years it crept up on us like a Preying Mantis moving stealthily along a tree limb toward its next meal. Now it amounts to about half of everything we earn.
Bob Weir is a former detective sergeant in the New York City Police Department. He is the executive editor of The News Connection in Highland Village, Texas. Email Bob.