Ronald Reagan once joked that a friend of his was invitedto a costume party, so he slapped egg on his face and went as a liberaleconomist.
That joke, however dated, becomes more relevant by themoment. Despite nearly 3 million jobs disappearing since the passage of theelephantine $787 billion stimulus package, we get a call for another shotgunblast of funding. This time a $13 billion outlay designed to distribute $250"economic recovery checks" to some 60 million seniors, veterans andthe disabled.
The president has petitioned Congress for this latestround of funding because it was so successful the first time around. Myquestion is, and I'm sure I'm not alone in asking this, is that if it was sosuccessful the first time, how come we need a replay of governmentphilanthropy?
And to think it seemed just a few short months ago, wewere being pedantically lectured by the current administration on how thismassive funding package was a vital prerequisite to temper the waves of rising unemploymentand saving and/or creating new jobs.
But as unemployment flirts with double digits andprecious few signs that the situation will recover anytime soon, it appearsthat there's enough egg on proponents of Stimulus, the Sequel's faces to slaptogether the international omelet at IHOP.
Whether Democrat or Republican, you would have to wonderat this juncture if perhaps bold, across-the-board tax cuts or reductions incapital gains may not have expedited recovery - if after all, the goal of thestimulus was to ostensibly to put more money in people's pockets and well,stimulate the economy.
But those ideas and others like them that involved taxcuts were summarily dismissed by the administration as remnants from theprevious occupant of 1600 Pennsylvania Ave.
But for those keeping score at home, it's not likegovernment projections regarding tax and capital gains cuts have ever erredpreviously.
Let's hearken back to the Clinton White House circa 1997where estimates of a net cut in capital gains tax rate of 8 percent (from 28 to20) would result in a some $21 billion in lost revenue over the next decade. Inreality, revenues actually INCREASED by more than $80 billion in just athree-year span.
To be fair, they bobbled it just as badly under George W.Bush, where, a projected $5 billion loss from a cut in capital gains from 20percent to 15 percent, mysteriously morphed into a revenue increase of morethan $130 million.
Going back a bit further, in 1965 the 25-year projectedcosts for Medicare were roughly $12 billion. Care to guess what that figurecame to in real time? How about, oh, $110 billion, about nine times greaterthan previously thought.
At this juncture with health care, cap and trade andfinancial regulatory overhaul topping the president's agenda, talk over a thirdround of stimulus funding has been somewhat muted.
But unlike Richard Nixon, we are certain to have astimulus debate to kick around for at least a while longer.
