Sunday, January 20, 2008

Just Say No To Tax Rebates: Here's Why:

President George W. Bush and Democrat Speaker of the House Nancy Pelosi both want to “stimulate” the economy by sending small tax rebate checks to Americans while ignoring the continued deterioration of the nation’s infrastructure. The price tag for the federal give-away to "save" the economy from recession is $150 billion if the President gets his way and maybe $500 billion if the Democrats get their way.

Most of I-95 is still four lanes, the same as when it was built in the 1960's despite the fact that nearly one third of the population of the United States lives within 100 miles of it. Mid-afternoon traffic, even on the weekend, comes to a stand still in New Jersey, Pennsylvania, Virginia, and the Carolinas. Commerce in 18 wheelers comes to a stop for even a small fender bender anywhere alone the I-95 corridor. This same scene is repeated on I-5 on the West Coast, and on many of the nation's other major highways as well. Major Interstate bridges have collapsed and others are in danger of collapse all over our land.

TRUTH: The $150 billion the President would use for rebates would widen I-95 from Bangor, Maine to Miami, Florida to six lanes and free up millions of gallons of gas now wasted in thousands of daily traffic backups. Hundreds of thousands of working hours are lost to traffic jams on our Interstate systems each week. What the Democrats want to issue in these "rebates" could actually fix the entire road system of our nation.

The small rebates proposed by President Bush wouldn't even pay for the gas lost in traffic each year for the average American family. The billions the President and the Democrats propose to spend to "stimulate" the economy would be better used to fix our roads with American steel, American cement and American labor. On the other hand tax rebates would probably be used by most Americans to buy cheap consumer junk made in China.

In a recent study the Heritage Foundation found that President Bush’s 2001 tax rebates had virtually no effect on the economy. Heritage wrote:

In the spring and summer of 2001, Washington borrowed billions from the capital/investment markets, and then mailed it to families in the form of $600 checks. In the fourth quarter of that year, consumer spending responded with 7 percent annualized growth, and investment spending correspondingly decreased by 23 percent. The economy grew at a sluggish 1.6 percent annualized rate. The simple redistribution from investment to consumption did not create new wealth.

All traces of the rebate policy effectively disappeared by the next quarter. Consumer spending retreated to 1.4 percent annualized growth, and investment spending partially recovered from its steep decline with a 13.6 percent annual growth. The economy remained stagnant through much of 2002.

If tax rebates did not work to stimulate the economy in 2001 they will not work in 2008 either. Just say no to tax rebates and demand that our broken roads and bridges be fixed.

Presidential Gov. Mike Huckabee agrees. At the January 24, 2008 debate just before the Florida primary the governor declared that we should not borrow money from China to give tax rebates to buy more Chinese consumer products. He encouraged a program to fix the infrastructure of the nation instead. Huckabee has continued to promote the widening of I-95 since the debate. (See story)

Our message to Bush and Pelosi should be: KEEP THE REBATE AND FIX THE ROADS.

What do you think? Do you want a $500 or $600 tax rebate or safe roads to drive on?