The title of the MSNBC article by Senior Producer John W. Schoen is “Can government turn the economy around?” The answer is a loud yes. Government, by its action and inaction, can turn a healthy economy sick just as it can turn a sick economy healthy. But it really depends on what the government plans are. In a nutshell, if the government butts out of the economy and allows people to engage in commerce without restrictive and repressive rules and regulations, the economy can soar. When the government plays the role of buttinski, their actions can cause the economy to sour. Here is the second paragraph from the article:
Theres no shortage of ideas in an election year. But it remains to be seen just how much the government can do to halt the continued slide in an economy battered by falling housing prices, rising energy costs and a lending slowdown caused by worries about how many more loans will go bad.
Let’s take a quick look at the three woes in Schoen’s article. Housing prices are falling because they have risen in a speculative market driven by house flippers and low interest rates. Rising energy costs can be blamed on an increase in demand for oil as nations like India and China want to get out of the 20th Century and join the 21st. But some of the blame for the increase can be laid at the feet of government and government regulation. We haven’t built a new nuclear power plant in the U.S. for over 30 years, and environmental nutjobs have succeeded in preventing the U.S. from tapping into much of our own available oil fields. And the loan crisis was caused by the government forcing companies to give loans to high-risk people, or they would be labeled as discriminating racists and prosecuted by government thugs. Now that — surprise, surprise — these high-risk people are defaulting on their loans, government thugs like Senator Clinton are bashing those same loan companies as being “predatory.” Politicians get to look good twice: first when they cause a problem, and later when they try to “fix” the same problem they created.
European and Asian markets are struggling today because of their worry over a U.S. recession. So, what can the government do that could stimulate the economy? Quite simply, the government could just get out of the way. The more government butts into our jobs and tells us what we can and can’t do, the harder it is for us to do our jobs. And possibly the easiest way for the government to leave us alone is by lowering the tax rates. As I have written before, you get more of that which you reward, and less of that which you punish, and taxes certainly are punitive on people working and doing business.
But it appears we may instead get a tax rebate. According to this news report, Pres. Bush is considering up to an $800 tax rebate, similar to the $300 tax rebate that was given in 2001. But whether it is a tax rebate or a tax rate cut, it will have to pass the Democrats in Congress. And knowing that, I have to wonder whether Democrats are really willing to help.
Here’s their dilemma — if Democrats do nothing or block any attempt by the White House to improve the economy, they could use a weak economy to push themselves forward. But doing so politically would mean hurting the little people the Democrats say they support. Time will tell whether the Democrats in Congress will put their own political fortunes ahead of the national interest.