There’s a lot of talk in Washington about yet another so-called “stimulus” package. If the next one is anything like the last one it will simply be a mechanism for taking money away from people who aren’t spending it the way politicians would like, and transferring it to people who will. Our soon-to-be ruler feels like adding some grandiose public works projects (raking leaves in a National Forest) to the list.
Let’s break away from these political stimulus ideas for a few minutes and study an absolutely brilliant idea from Texas Republican Congressman Louie Gohmert. Now Louie hasn’t been around the halls of congress all that much (just three years) so he is not yet all that acclimated to the Washington lust for absolute power. If he were, he never would have come up with this idea.
You’ve heard of K.I.S.S., haven’t you? This acronym is a standard for sales weasels everywhere. Keep It Simple, Stupid; and that’s exactly what Gohmert has done to the stimulus idea. He kept it simple. The problem is … government doesn’t do simple.
Here’s the deal. The Imperial Federal Government of the United States collects about $167 billion a month in income and withholding taxes. The Congress has already passed a $700 billion stimulus bill, and about a half of that is gone, leaving $350 billion of your money in the pot. Some have suggested that this $350 billion be left as some sort of a bailout/stimulus slush fund for the incoming Obama Administration. In other words … let the politicians figure out how to spend it. Gohmert thinks it might be a better idea to allow the people who actually earned this $350 billion to spend it as they see fit. OK, if you have any appreciation at all for the concept of economic freedom that sounds like a good idea; but how do you make it work in this instance.
First, a math problem. Divide $350 billion, the amount of the bailout bill not yet spent or promised, by the $167 billion per month our government collects in income and payroll taxes. I know … government educated. So we’ll make it easy and round it off to two. The $350 billion is just a bit over two times the amount of income and payroll taxes our government seizes in one month.
OK .. here’s where the K.I.S.S. comes in. The government simply absorbs the remaining $350 billion from the stimulus bill and suspends the collection of all income and payroll taxes for two months. Even trade. This means that for two months you get your entire paycheck (well … less any State withholding). The government ends up with the same amount of money in its coffers, and the income earners in this country have some extra money to spend – an average about $2,000 per taxpayer – over the following two months.