Tax cuts are the real stimulus
February 12, 2009 | By Nathaniel Ward
A new chart prepared by Heritage Foundation experts and distributed to the news media demonstrates that government spending doesn't stimulate the economy.
Instead, it is by lowering income tax rates -- as the 2003 tax cuts did -- that lawmakers can spark a recovery by creating incentives to work, innovate and invest. History and decades of research bear this out.
Congressional leaders have nonetheless reached an agreement on a plan to spend $790 billion of taxpayer money to "stimulate" the economy. Despite opposition from conservatives in both the House and Senate, it is likely to pass as soon as this week.
A generation's worth of liberal policy
Heritage Foundation vice president Mike Franc explains on National Review Online that the "stimulus" bill isn't just wasteful. It also advances the Left's agenda by enacting much of their policy wish-list.
Over the last three weeks the policy experts at my institution, the Heritage Foundation, have published dozens of biting critiques of literally every aspect of the House and Senate versions of this legislative monstrosity. They agree on one thing: Under the guise of stimulating the economy, this one bill contains a generation's worth of liberal policymaking, an entire Great Society-scale agenda, one that advances the liberals' view of man and his relationship to government enough to cause LBJ himself to turn red with envy.
How you can help
The Heritage Foundation is working hard to get the word out about this "stimulus" proposal. But with the help of Heritage members and supporters like you, we can make even more of a difference.
Heritage has created five useful one-page reports outlining the problems with the legislation and alternatives for conservatives to embrace. Send these to your friends or use them to write a letter to the editor.
- Compromise 101: Meet the New Stimulus (PDF)
- What Is This Debt Plan Really About? (PDF)
- Why a Trillion Dollars Only Buys Debt (PDF)
- Smart Stimulus: Sen. Jim DeMint's American Option (PDF)
- Why Spending Does Not Equal Stimulus (PDF)
You can also make a tax-deductible one-time or recurring contribution to support our work.
Other Heritage work of note
- While Israeli voters gave a narrow plurality to the leftist Kadima Party, Heritage's James Phillips argues that the electorate moved towards the more hawkish parties on the right. "The Israeli election results are a blinking yellow light that should warn the Obama Administration against recklessly pushing forward peace negotiations that have no chance of succeeding until Hamas has been defeated and discredited," he writes.
- The Washington Post called on Heritage economist David John to participate in an online discussion of the Treasury's newest proposal to bail out the financial industry. Elsewhere, David John explains that "because the plan is mostly composed of bad policy and talking points, it has had little or no effect on financial markets."
- The "stimulus" bill currently before the Congress is just the latest in a long line of abusive spending bills, Heritage Foundation President Ed Feulner writes in the Washington Times. The legislation is weighed down with pork-barrel spending, like $650 million for digital TV coupons, $140 million to study the atmosphere and $50 million for the National Endowment for the Arts. "None of these proposals would create jobs or boost our economy," Feulner explains. "They're just old-fashioned waste."
- Today is the 200th anniversary of Abraham Lincoln's birth. To celebrate, The Heritage Foundation is hosting conservative scholar Shelby Steele for a discussion of Lincoln's would-be modern imitators. And in a post on Heritage's blog, the Foundry, Heritage scholar Joe Postell explains how Lincoln's dedication to the Constitution and the principles of the Founding make him a model for today's conservatives.
In other news
- The AP reports that "Wall Street bank executives squirmed under a public scolding in the U.S. Congress on Wednesday over how they used $176 billion in bailout money without noticeably improving the battered economy." Funny that Congressmen are raising these questions, seeing as they approved the easily-abused bailout package in the first place.
- Gay supporters of same-sex "marriage" descended on New York City's marriage bureau today demanding licenses to wed. The city does not recognize such unions and turned the couples away.
- Taxpayers may foot the bill for the birth and care of Nadya Suleman's octuplets. The AP reports she will receive increased government aid for her children, while the hospital where she gave birth is requesting reimbursement from the state Medicaid program, Medi-Cal.
- Retail sales inched upwards in January, the first such increase in seven months.
- "Lithuania is to hold talks with the United States on taking in some of the inmates from the contentious U.S. military prison at Guantanamo," according to news reports.
- A Senate committee yesterday approved legislation granting the District of Columbia a vote in the House of Representatives. Problem is, this legislation isn't constitutional.
Coming up at Heritage
To attend these or any other events at Heritage please RSVP at Heritage's website. Or you can view these events live online. All times are Eastern.
- On Wednesday, February 18 at noon, a panel of experts explains why young people in particular should embrace entitlement reforms.
- On Friday, February 13 at noon, a panel of experts will discuss the Mexican drug cartel and U.S. drug control policy.
Nathaniel Ward is the Editor of MyHeritage.org—a website for members and supporters of The Heritage Foundation.
