Steve Chapman

Targeted? Sure, if you define the target as the broad side of a barn. The Treasury checks would go to 117 million families, or three out of every four families in America. Couples with incomes all the way up to $174,000 would be included.

The business provisions, which let companies write off investments faster than usual, are equally indiscriminate. The purpose is to spur purchases that otherwise wouldn't be made. But as Brookings Institution economist Douglas Elmendorf told me, the break will apply to other investments as well. "It's safe to say that more than 90 percent of the lost business tax revenue will simply subsidize investment that would have occurred anyway," he says. Even by Washington standards, a bill that squanders nine out of every 10 dollars is not a model of efficiency.

Temporary? The rebates and business breaks may vanish like leaves in autumn, but the fiscal consequences will endure. This year's federal budget deficit was already expected to hit $250 billion, according to the CBO, and the stimulus would pile on another $150 billion. So taxpayers, current and future, will have to shoulder more each year to finance the federal debt -- interest on which already swallows up 10 percent of federal revenues.

So, contrary to its billing, the package is likely to be tardy and scattershot, with a lingering, bitter aftertaste. Even if it could be implemented perfectly, though, it might still be a futile endeavor. Alan Auerbach, an economist at the University of California, Berkeley, looked at past fiscal policy initiatives and found "little evidence that these effects have provided a significant contribution to economic stabilization, if in fact they have worked in the right direction at all."

In other words, we may spend a lot of money to accomplish nothing. Note to our leaders: We can do that for free.


Steve Chapman

Steve Chapman is a columnist and editorial writer for the Chicago Tribune.
 

 
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