Three weeks ago, House Speaker Nancy Pelosi was saying that the economy needed a stimulus package of $600 billion. Less than two weeks later, President-elect Barack Obama’s adviser David Axelrod one-upped her, saying the package needed to be between $675 billion and $775 billion. Now, an $850 billion package is being discussed [“Obama Pitches Stimulus Plan,” front page, Jan. 6].
Every lobbyist on K Street salivates each time the pot gets bigger, while taxpayers face the prospect of shouldering the burden. Throwing billions of dollars into pork-barrel projects and bailing out state and local governments for their lack of fiscal restraint is bad fiscal policy that is likely to slow the nation’s long-term economic recovery.
Currently, an estimated $10 trillion to $13 trillion worth of U.S. capital is parked offshore and could be creating American jobs if it weren’t for the disincentives created by our convoluted tax code. A real stimulus plan would lower capital gains and corporate tax rates or, better yet, eliminate those taxes. That would encourage capital to flow back into the U.S. economy and generate real economic growth.
The writer is budget and tax legislative specialist at the Heartland Institute.
This Letter to the Editor was originally published in the The Washington Post.