It looks like the Fed's money presses have some long nights ahead as taxpayers could begin receiving their government stimulus package checks as early as June, according to an Associated Press report. But President Bush and his economic team have made it very clear that everyone's piggy banks should be left on their shelves.
In his January 18 speech on the package, President Bush stated that the $145 billion "shot in the arm" is a temporary fix meant to "keep our economy growing and create jobs." Treasury Secretary Henry Paulson's short epilogue followed suit. "There are no silver bullets," he said. "But…there's plenty of evidence - you give money to people, they're going to spend it."
A spending increase should translate into a briefly enlivened economy. But when rising gas prices, the consistent devaluation of the dollar, the war in Iraq and the soon-to-be baby busted Social Security program are considered, this stimulus package starts to seem like a Band-Aid stretched across an open chest cavity or a shovel full of dirt thrown into a meteorite crater. It is at best a stall. At worst, it reveals the government leaders' senseless propagation of the boom-and-bust business cycle and their refusal to make the hard decisions that could create lasting economic change.
The Federal Reserve has been printing more money in the last decade than ever before. And when more money is created, the value of each individual dollar drops. This year, the dollar has dropped 8 percent in value against the euro. It is approximately half of one British pound. Now the government wants to print even more currency to support the stimulus package checks. As it is, our ballooning deficit can only impede upon the package's effectiveness.
Currently, the United States is over $9 trillion in debt. The war in Iraq has cost the United States more than $500 billion to date. And how much more will be spent if the newly elected president wants to stay?
The baby-boomers have begun to retire now, and this promises to break the Social Security program. It is estimated that in less than 10 years, more money will be taken out of Social Security than put in. On top of all this, some Democrats want to implement universal health care, a system utilized in Canada where citizens spend 9 percent of the GDP on health care.
To truly solve our economic ills, difficult decisions have to be made. Stopping inflation and a severe decrease in spending would stabilize the economy. A stronger dollar and fewer corporate restrictions would make America appealing to manufacturers again. Then, as a producing country, America would have more jobs and more revenue.
U.S. soldiers need to be pulled out of Iraq. Victory is impossible because it cannot be defined, and the price paid in money and blood is unacceptable. Social Security must be privatized before future generations come of age. Finally, the health care professionals should not tolerate government intervention in their field. It appears universal health care has failed in countries such as Great Britain and Canada, and the outcome would be no less dismal here.
The economy can be fixed. But the solution is not government checks in the mail.
Paul Heath is an English senior.
