Does anyone remember the Economic Stimulus Act of 2008? Eligible taxpayers could receive up to $600 ($1,200 for married couples), but it phased out for annual incomes beginning at $75,000 and ending at $150,000. According to the White House fact sheet, the Act was primarily intended to remedy slower growth, and address short-term economic uncertainties by allowing “Americans to keep more of their money to stimulate consumer spending.”
Many economists, however, saw the “stimulus” as little more than a scheme by government to 1) take from one group (rob Peter—higher earners) and to 2) buy votes later from another group (pay Paul—lower earners). In the midst of economic strife, it is helpful for politicians to be able to point to something they have done to help. Few things improve the mood of voters like receiving a check in the mail. Continue Reading →