When the Titanic went down there was a certain moment in time when the fate of the ship and the eventual outcome were a certainty.  Beyond that point any effort to try and prevent the inevitable was futile, and the best move was to put the passengers in life boats to save them.  Washington is still trying to save the Titanic.

The economy has dictated loud and clear that some corporations have been marked for extinction.  Washington would be wise to focus on providing financial lifeboats to the employees of those companies instead of trying to save the companies themselves.  If those companies lack the vision to save themselves, they are not worth taxpayer investment.  Listen to the economy it knows what it's talking about.

The New Deal or Bush-whacked all over again?

The stimulus in a nutshell.  The current $800 billion plan breaks down into a 35% tax break and a 65% government spending plan.  Think of it this way: you pay $1.00 to receive 35 cents.  The other 65 cents that taxpayers will be on the hook for will be spent by someone else. 

If that sounds like a good investment to you then this should sound great.  Send me $1.00 and I'll give you 50% instead of the measly 35% Washington is offering for your investment.  There is no limit to this offer, you can send me $1.00 as often as you would like and I guaratee I'll always send you 50 cents back.  Well it sounds like a great stimulus plan .... to me.

If you do the math you'll recognize Washington is still addicted to fiscal folly.  Washinton will use debt to finance their latest mistake.  Currently the cost of that debt is at an annual rate of around 3%.  For every dollar Washinton borrows today, you the taxpayer will have to pay roughly $1.27 dollars 8 year from now, just after the next president is inaugurated.

If you take the 35 cents you will receive this year and invest it in something that yields a 16.5% return on investment every year for the next eight years your return on investment and the initial 35 cents will cover the tax bill you'll receive to cover todays debt.  That is where the problem arises.

If you stash the money into an investment that pays 16.5% return then it doesn't really do much to stimulate consumption and therefore stimulate the economy.  Of course if there were an inestment that paid such consistent high rate of return, then there probably would not be an economic crisis to begin with.

Maybe after all the bad choices have been exhausted Washting will finally offer Americans a Real Deal instead of the Raw Deal.  Maybe Americans will be offered life boats instead of false hopes.