When a Tax Cut Isn't a Tax Cut

Answer: when it's a one-time rebate.

President Bush wants a quick $150 billion in "tax relief" to Americans to get the economy jump started. We could adopt a strict economic mantra which would probably yield the right decisions when faced with challenging economic questions. Perhaps: WWFBD (What Would Fredric Bastiat Do)?

Yet, I think like in most things governmental (and let's all pause for a moment and thank the Left for putting the mental in governmental to begin with, shall we?), we'd be causing the patient such a shock that it might be too much too fast, because Bastiat would probably disband the IRS and privatize the Defense Department.

For starters, though, if the President and Congress are serious about doing something, let's make it a genuine, bona fide tax cut, and not a one-time affair. Bush has done this before, of course, and as a rebate, early in his first term. The hope - and isn't it simply audacious of us to hope? - is that people would go out and spend those rebates of a few hundred dollars.

Forgive me if I'm not doing cartwheels for it was my money to begin with. And yours.

My colleague Matt made an excellent point today: we've for too long been an economy that rides the strength of consumer spending. We'd be wise to adopt policies that focus on strengthening the business base of the economy (think durable goods and manufacturing) to complement and diversify what makes our economic engine hum.

And while I'm dispensing advice, let's get the federal government out of the domestic/entitlement business. The states would be far superior in delivering services of that type to their citizens based on familiarity (a local understanding of what their people need) and proximity (being able to deliver services closer to the users).