While the $700 billion bailout clearly looks like it has not stabilized the nation's stock exchanges and the financial crisis spreading worldwide, there are those who think that, despite Monday's giant rebound, more needs to be done. It likely does.
The question for many is, what to do? One thought that is being floated around is another round of stimulus checks similar to those that arrived several months ago. Such a plan would be a poor use of Federal resources at this time.
Over the weekend, with the markets as well as global banks still in trouble, some Congressional Democrats, supported by Democratic presidential nominee Barack Obama, are suggesting that a new round of checks go out to taxpayers now, to help stimulate the economy - or so the argument goes. Is this more about election year politics than good economic policy?
The line will be used that “taxpayers can best judge where their money goes.” That is right, but the better way to prove that is not to overtax them in the first place. More importantly, the nation, despite this financial crisis, has not seen the presidential candidates talk about one of its main causes: the over-borrowing and massive credit debt that has been racked up by the average American.
While a check may make a mortgage payment or buy a new product (with a portion of the sale likely going overseas) the issue at this point is not economic stimulus. If anything, it is still too easy to spend in the nation, and having Congress help, makes no sense. Couple that with that fact that the national debt has now surpassed $10 trillion, and the nation is long overdue to stop spending without reason.
If Congress really believes that there is a need to stimulate the economy there are two ways to do so that benefit the nation far past the purchase of a big screen television or a couple of dinners out. The first is targeted tax credits to increase the nation's energy independence through alternative fuels - something that had been held up in Congress for some time, but requires real money to offset their costs.
The other, perhaps more important, is to use such funds for infrastructure improvements. The nation's roads, bridges, rail system and airports need the investment, which will not only create jobs, but provide long term improvements for the nation, unlike the purchase of a new giant Elmo doll or a set of golf clubs.
If anything, Congress needs to think about the long term gains, not short term benefit.
Cosentino is a former mayor of Auburn and can be contacted at cozguytho@aol.com
Over the weekend, with the markets as well as global banks still in trouble, some Congressional Democrats, supported by Democratic presidential nominee Barack Obama, are suggesting that a new round of checks go out to taxpayers now, to help stimulate the economy - or so the argument goes. Is this more about election year politics than good economic policy?
The line will be used that “taxpayers can best judge where their money goes.” That is right, but the better way to prove that is not to overtax them in the first place. More importantly, the nation, despite this financial crisis, has not seen the presidential candidates talk about one of its main causes: the over-borrowing and massive credit debt that has been racked up by the average American.
While a check may make a mortgage payment or buy a new product (with a portion of the sale likely going overseas) the issue at this point is not economic stimulus. If anything, it is still too easy to spend in the nation, and having Congress help, makes no sense. Couple that with that fact that the national debt has now surpassed $10 trillion, and the nation is long overdue to stop spending without reason.
If Congress really believes that there is a need to stimulate the economy there are two ways to do so that benefit the nation far past the purchase of a big screen television or a couple of dinners out. The first is targeted tax credits to increase the nation's energy independence through alternative fuels - something that had been held up in Congress for some time, but requires real money to offset their costs.
The other, perhaps more important, is to use such funds for infrastructure improvements. The nation's roads, bridges, rail system and airports need the investment, which will not only create jobs, but provide long term improvements for the nation, unlike the purchase of a new giant Elmo doll or a set of golf clubs.
If anything, Congress needs to think about the long term gains, not short term benefit.
Cosentino is a former mayor of Auburn and can be contacted at cozguytho@aol.com
