What Real Economic Stimulus Would Look Like

Well it seems that very few politicians from either of the two major parties can pass up an opportunity to buy votes from the public:

The Senate, voting 81 to 16, slightly expanded the House plan to include payments for some 20 million Social Security recipients and 250,000 disabled veterans who would not have qualified because they do not earn income. The final measure also specifies that illegal immigrant workers not receive payments.

I especially like the gratuitous dig at illegal immigrant workers. It's gratuitous because there really isn't a way illegals could get the rebate anyway, unless the government were to send vans full of government checks out to the Home Depot parking lots and lettuce fields of the nation.

Wait! Here comes Santa Claus! Here comes Santa Claus!

Speaker Nancy Pelosi, at a rare joint news conference featuring all four Congressional leaders and Treasury Secretary Henry M. Paulson Jr., declared: “We are making history. What has passed the Congress in record time is a gift to the middle class and those who aspire to it in our country.”

Got it? A gift. A gift of our own money, returned to us. Way to let us eat cake, Nancy. But I digress. The real joke is here:

“This plan is robust, broad based, timely, and it will be effective,”

That's our President George W. Bush talking. He's telling us that a one-time tax rebate equating to about 1% of GDP is going to forestall a recession, in spite of the fact that there's no 168 billion dollar spending cut to offset it. So not only will we receive a gift of our own money, we'll have to pay it back in the future—with interest of course. But to be fair to our economically illiterate leaders, the timing of the payout—May or June—couldn't be more fortunate. Why? Because that's when Spring Spike will be in full force, and if this year's predictions of four dollars a gallon come true, we're all going to need that money to fill up our cars and buy groceries. By the way, have you ever heard of alkylate? Don't worry, you will.

But all of this gives me an idea, or a pipe dream, take your pick. If the government really wanted to give the economy a break without lighting a fire under the deficit, they could suspend summer blend gasoline requirements for this year. Doing so could have multiple benefits, the first being little or no spike in the fuel prices which have been driving inflation and eating away at our wages for the last two years. Second, suspending summer blend requirements wouldn't fuel the deficit. A third benefit, and perhaps the biggest, would be a chance to collect pollution data that would allow us to factually determine if these fuel blend requirements are having any real positive effect on air quality for the billions of dollars it costs us every year.

Back when these regulations were adopted by Congress, most vehicles on the road had carburetors and mechanical ignition timing. Summer blend requirements were aimed principally at two sources of pollution: the higher quantity of unburned fuel emitted from tailpipes in warmer weather and the ozone producing organic compounds created when summer heat causes a higher rate of gasoline evaporation. But these days things are different. Most of the vehicles on the road use fuel injection, making their fuel systems completely closed, and computers which optimally determine most fuel and ignition parameters in real time, greatly reducing emissions. The predominance of closed fuel systems and computerized engine management may have therefore mooted the original intended environmental benefits of these gasoline regulations. Presuming it's politically possible to roll back a monstrously expensive environmental regulation that does nothing for the environment, this type of liberal capitalist stimulus could be a real economic "gift" to the country, and one that keeps on giving.