Dirt Simple

Is it just me, or did the President’s little announcement about the tax rebates sound a bit like he was doing a late night informercial?

If you’ve already filed your income tax return your rebate is on the way. Even if you don’t owe any income taxes you may still be eligible for a check, but you need to file a form with the IRS. And it’s not too late to do so. Now, you can find out information as to how to proceed by calling your local IRS office, or go to the IRS website.

But wait! There’s more! The first million Americans to file their tax returns will also receive this fabulous set of steak knives, ABSOLUTELY FREE!

Then there was his appearance on Deal, or No Deal…

I’m sure it meant a lot to the soldier on the show, and without question, he deserved the recognition, but I just had to cringe at the stilted, scripted humor. The whole thing just felt hollow.

I suspect a lot of Americans feel much the same way about the tax rebates which they’ll start receiving tomorrow. It’s nice and all, but a lot of people are either suspicious of it, or figure it’ll just get taken back from them somewhere else. That feeling is justified, because the fact is, the money isn’t really there to give in the first place. It’s all just part of this administration’s continuing practice of spending money they don’t have.

I’ve heard more than a few people calling it “free money.” It isn’t free at all. It’s borrowed money, and borrowed money costs money. You have to pay interest on it, and there’s an opportunity cost as well. The deeper in debt you get, the less flexibility you have to do the things you want to do in the future, and sooner or later, people start to question your fiscal credibility. The same rules which apply to individuals, apply to governments as well.

Politicians, will try to tell you otherwise, and make you feel like you’re not smart enough to understand national fiscal policy. They’ll say things like, “deficits don’t matter.” The thinking–if you can call it that–is that government spending stimulates the economy, which generates more tax revenue, and the party just goes on forever. But the national debt has increased by $3 trillion dollars, over 53% since 2000. Have tax revenues increased anywhere near enough to compensate? No.

So, am I suggesting we should all send back our rebates with a note asking to apply it to the national debt? Hell no! Spend it. Save it. Give it away. Do whatever you want with it. Sending it back wouldn’t make an ounce of difference. It would just get blown on something else anyway. Like the $42 million that the IRS is spending just to tell people about the rebates.