April 1, 2008

In my Opinion…

Tax rebate Band-Aid too small to heal bleak economy

By Carol Rosen
Editor

It’s a foregone conclusion that our country’s economic outlook is pretty bleak. As prices rise, our incomes remain static and pretty soon, the cost of food and fuel will keep many of us from buying those items like clothing, we used to consider part of a weekly or monthly ritual. Some of us have even stopped visiting our local malls, especially as gas prices quickly soar toward $4 per gallon.

In order to boost the economy, congress and the executive branch is spending billions of dollars to give every individual paying taxes $600 and those with children an extra $300. The money is designed to get us to go out and buy television sets, cars, clothes and other things that, given the circumstances, we wouldn’t even think about.

But how many people are going to take that money shopping? The amount of money isn’t enough to buy high-priced items and might be used to repair household items, but likely won’t be the basis for cars or other high priced appliances. It’s not enough to buy a refrigerator or washing machine, for example.

Given the current situation, most people are likely to use it to pay down or pay off bills so that our individual debt goes down—even a little bit. Others might want to use it for savings, to provide a little safety net. Both of the latter scenarios won’t help the economy.

I question why the government is doing this. The county is in deep financial trouble, and we’re facing inflation. The dollar’s value is falling against all the world’s currencies and the credit crunch has many citizens scared they may lose their homes. In addition, the nation’s highways are crumbling and our schools—at least California schools—may face teacher loss, overcrowding and other factors, which will put another nail in the public education coffin.

I question why the government didn’t spend these billions on repairing the highway infrastructure or by placing it in the hands of various schools—although those of us that don’t need it can always donate it to our local public schools. It seems that our government is providing a 4-inch Band-Aid to cover a deep bloody gash. And a big question is whether it will make any difference.

The economy over the past eight years has been stuck mostly in recession. While all of that can’t totally be blamed on Washington, there is a huge and quite costly war going on in Iraq, besides the sub-prime mortgage fiasco. It’s bothersome that nothing significant and strong has been done other than simple prop up measures that will leave our children and grandchildren with debt they can’t repay.