Rebates not enough to jump-start the economy

Jump-start the economy

It is difficult to justify adding another $150 billion or so to the national debt in an effort to convince Americans and the rest of the world that the U.S. economy isn’t going in the tank. But that may be just what is going to have to happen.

Because the alternative, doing nothing about the very real threat of a recession, simply isn’t an option.

There are those, and we can count this page in that number, who have been arguing for years that the U.S. economy was not as rock-solid as its most stalwart backers were saying.

A national debt that grew by almost half over a period of seven years was one clue. Another was a trade deficit that expanded in almost every way, but especially in dollars flowing to China and other southeast Asia trade “partners” for hundreds of billions of dollars worth of stuff and other hundreds of billions flowing to a handful of petroleum-producing nations. The ever-growing loss of manufacturing jobs, replaced — if at all — by lower-paying service jobs was another clue.

Meanwhile, there was a housing boom that, it turned out, was driven by a newly dysfunctional mortgage system that was approving loans that borrowers simply could not afford.

Sinking dollar

And, of course, there were the natural results of all of the above. Nations that for years were happy to ship their goods to the United States and then invest the proceeds in U.S. Treasury notes began shifting their profits elsewhere. And the dollar entered a long, painful and on-going slide against other industrialized currencies. A 50 percent decrease in value of the dollar against the Euro and the fact that a Canadian Looney is now worth more than a U.S. Greenback say it all.

An economic stimulus package makes sense now because too many Americans — frightened by the economic signs they are seeing and pinched by stagnant wages and rising energy and food costs — are simply not in a mood to buy.

The emergency package agreed to by the White House and bipartisan House leaders would provide tax rebate checks of up to $1,200 to 117 million families and give businesses $50 billion in incentives to invest in new plants and equipment.

That may not be a perfect plan, but it deserves quick action. The quicker the better, so that checks can get in the mail and business owners can start making investment plans.