t is heartening to know that Washington is returning our money to us as tax rebates through the "economic stimulus package." But is it really going to help? Or is it just like putting a band-aid on a gun shot wound?
In the Bush Administration, Congress and Federal Reserve’s efforts to ward off a recession and help the economy, we may be missing a critical point. Regardless of whether the "economic stimulus package’ works or does not work this time, would we not have been better off if we were allowed to keep our own money in the first place-rather than pay the fed in taxes, allow them to keep a nice chunk, and return to us a few crumbs as a tax rebate? Rather than be compelled (taxes, regulations, inflation, etc) to give our money to the federal government, we would have had this money in our pockets already-spending, saving or investing in whatever way we considered the most beneficial.
The basic issue at hand is not what the federal government can do to help resolve the current credit/debt crisis, but what it did in the past that created the crisis in the first place. It isn’t so much the big banks, or big oil to be blamed for our current financial housing mess and high oil prices, as it is the federal government. Such things as the federal government’s own $9 trillion-plus debt, suppressing interest rates (the federal funds rate was at 1 percent from June 2003 to June 2004), ongoing wars in Iraq and Afghanistan that have already cost more then $600 billion (and are expected to eventually cost trillions!), and pumping (i.e. creating out of thin air) hundred of billions of newly printed dollars into our economic system in just the past eight years! All of this adds up to a considerable extra burden on us as Americans through high taxes, high government regulations and controls, and high inflation and prices.
Sooner or later, no amount of interference the federal government performs will stave off an impeding financial collapse unless we return to fiscal discipline and sound financial principles.
Justin P. Ertelt is the author of Saving Your Way to Success, and owner of http://www.savingyourwaytosuccess.com, helping others learn the importance of saving money and financial planning, and helping others achieve financial success. To learn more visit http://www.savingyourwaytosuccess.com.