Once again we can count on Senate Republicans to turn a plum piece of legislation into a prune.
Almost every credible economist acknowledges that we're in dire need of an economic stimulus package that focuses on creating jobs, the more the merrier. With 600,000 jobs lost in January alone, following two previous months of 500,000 job losses, consumer demand is plummeting, mortgage foreclosures rising, defaults on consumer and corporate debt escalating, state and local governments scrambling to control deficits, and the downward spiral accelerating at a frightening pace.
It's very much like a plane that has lost power in all of its engines and is plunging toward a catastrophic collision with the ground. Unless at least one of its engines can be ignited, there's no hope.
The purpose of the stimulus plan is to ignite multiple sectors of the economy, utilizing a variety of techniques, all designed to spur economic activity which in turn will restore both the consumers' capacity and confidence to spend.
Republicans, however, see the stimulus package as an opportunity to extend their failed policies that have led us to this dangerous precipice. Their focus is on expanding tax cuts, bailing out businesses, and providing financial incentives targeted largely to the most affluent members of our society.
A good example of their remedy for the current predicament is their support of a $15,000 tax credit to be extended to anyone purchasing a home as a primary residence. Not only will this help to extend the housing bubble, it will cost the treasury an estimated $35 billion.
Calculated Risk, a premier economic blog, offers a lucid assessment of the proposal in an entry titled simply "The Homebuyer Tax Credit". I highly recommend reading it.