Rigonomics:

You can always count on the political class in this country to solve any problem they perceive with a check. Now, of course, that is easier for them to do because it is not their money. In the case of the federal government, it’s not even our money. In fact, with the size of the growing national debt, it’s our children’s money. As I wrote in last week’s column, we are still paying back state bonds authorized in 1970.

The latest political boondoggles on Capitol Hill are the “Economic Stimulus Act of 2008” passed in January and Senate Bill 2636 “The Foreclosure Prevention Act of 2008” passed out of committee by the Senate Thursday. The economic stimulus package will cost our children $168 billion. The Foreclosure Prevention Act will cost another $15 billion.

Neither act will stimulate the economy nor prevent any foreclosures. But they are not really meant to do that. Their only purpose is to get incumbent legislators reelected.

All Congress seems to cares about, Democrats and Republicans alike, is demonstrating to the public how much they care. If the economy is in bad shape or foreclosures are growing, just do something about it. It is oh-so painful to watch an economically illiterate Congressman yap on some cable network that this legislation is needed to avoid a recession or to stop foreclosures.

The voting public needs to understand that very few Congressmen or women actually understand anything about economics or how the real economy works. The only requirement to be in Congress is to receive the most votes. How do you get the most votes? By letting the voters know how much you care. It’s a vicious cycle.

Now, I guess you could argue that if the money is spent on items that will help the economy, it could pay for itself. Don’t hold your breath. For the most part, the stimulus act, among other things, is just sending out checks to 119 million households in the hope that it might strengthen the economy. Though some of the tax incentives for business may be good, sending families checks for more than $100 billion is a very inefficient way to stimulate the economy. The whole stimulus package, according to Office of Management and Budget Director Jim Nussle, is supposed to create 500,000 new jobs. Let’s see, $168 billion divided by 500,000 jobs. That comes out to only $336,000 per job. I wonder where we can apply.