Tax Quote of the Week
"Borrowing imposes a hidden burden upon taxpayers in the short run and an explicit burden in the long run, while taxes impose an explicit short-run burden and a more hidden burden in the long run."
- Richard K. Vedder and Lowell E. Gallaway
More Federal Stimulus Coming?
The House Ways and Means Committee has been directed by Speaker Nancy Pelosi (D-CA) to conduct hearings on economic stimulus proposals. A hearing will be held in Washington on October 29, 2008 to discuss options for further economic stimulus.
Speaker Pelosi indicated, "Our economy faces serious challenges and we must pass a new economic recovery plan." She notes that Federal Reserve Chairman Ben Bernanke, former Federal Reserve Chairman Paul Volcker and other Federal Reserve Bank Presidents have expressed continuing concerns about the economy.
As a result of the ongoing weakness in banking and employment, Speaker Pelosi believes that it is necessary to "schedule hearings in the coming weeks on the key provisions of a fiscally responsible recovery package."
Senate Majority Leader Harry Reid (D-NV) also is considering further economic stimulus. He suggests that when he reconvenes the Senate on November 17, 2008, it will be appropriate to consider additional stimulus plans. Sen. Reid has three specific goals for the plans for the stimulus package. He stated, "First, we want to create good paying jobs by rebuilding our roads and bridges." His second plan is to extend "tax-free unemployment benefits for those looking for work." And, "third, we would help Nevada homeowners." The assistance for homeowners could be accomplished through federal agencies encouraging lenders to be flexible in modifying mortgage terms.
Editor's Note: The first stimulus package passed in early 2008 involved distribution of rebate checks of $600 to over 130 million taxpayers. A second recovery bailout for banks and financial institutions involves spending up to $700 billion to acquire bad mortgage securities and invest in banks. This third potential stimulus package with major expenditures for roads, bridges and other infrastructure could total another $200 to $300 billion dollars - and increase the deficit again. Following the report by Treasury that the updated deficit number for fiscal year 2008 was $454.8 billion, the deficit for 2009 now will be in excess of $500 billion.
