So can a onetime tax rebate plan that totals $160 billion jump-start a $13 trillion economy? The amount of stimulus is a relative thimble-full, and it is likely that much of it will either be saved or used to pay debts, watering down whatever new buying power it may exert. Moreover, the money behind the checks has either come from taxes or from borrowing. "No new spending power is created," says economic analyst Brian Riedl.
"Tax rebates aren't supply-side tax cuts, but they probably help provide a floor under consumer spending," said economic adviser Cesar Conda.
"The president's call for tax incentives to boost business investment is exactly what the economy needs to lift it out of its doldrums," Conda said, adding that he would "make the package stronger" by adding corporate tax cuts.
But the Club for Growth, the GOP tax-cut advocacy group, flatly rejects the Bush plan, saying its provisions "are likely to do little to stimulate the economy."
Instead, "we would make the 2001 and 2003 tax cuts permanent," cut the corporate tax rate and lower taxes on capital gains, said Pat Toomey, the group's president.
Last week, Mitt Romney also called for a much bigger stimulus than the president proposed, including permanently cutting the lowest income-tax bracket, dropping the corporate tax to 20 percent and ending the payroll tax for workers over 65.
"The kind of stimulative actions (needed) should be pro-growth," rather than "just writing checks for people to buy oil or TVs," Romney said.
Economist Douglas Holtz-Eakin, who is advising John McCain, rejects Democratic proposals to fill the stimulus bill with public works and social-welfare spending. "We don't want to have a big spending program. We are spending too much already," he told me.
"What we've got right now is the sensation that people are scared and want to be convinced things are being done to strengthen the economy," he said. "Tax relief is a sensible step, putting money into the hands of middle-class families by lowering marginal tax rates. That would be an especially good thing to do right now."
Harvard economist Martin Feldstein, who advised President Reagan, is also calling for more substantive tax cuts "to be enacted now but triggered by what happens to the economy. It could be an across-the-board cut," he said.
Clearly, Congress must act boldly and quickly, job attributes that are in short supply on Capitol Hill right now. There will be a lag time here, too. Still, with its public-approval scores at record lows in an election year and daily signs of a weakening economy, maybe our lawmakers will surprise us, but don't hold your breath.
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