Fiscal Stimulus

Joel Stein discusses getting a check in the mail from the Feds:

But the government doesn't want us to bank that money or use it to pay off debts. It believes we will go out and spend the money, and that will make our houses worth a lot again. The idea is this: Say, for instance, I got $600, and I spent it on strippers. Those strippers would then buy clothes at Bebe, and the person who owns Bebe would buy the crappy house I overpaid for and get me out of the financial predicament caused by unscrupulous mortgage lenders and not by my addiction to strip joints.

...Unless we find a new bubble to invest in -- and may I boldly suggest reams and reams of freshly printed newspaper -- we're not going to spend our way out of this recession. We got here for the same reason people always get in trouble, from prom night to the blackjack table to Iraq: We got over-excited. We ignored centuries of data saying real estate is a worse investment than stocks, and instead based our investment strategy on the fact that our neighbor totally just sold his house for a serious ton of money, for real. If only someone had invented an easy way to access investment history charts from our computers, this might never have happened.

So as fun as that stripper check sounds, we'd be smart not to take it, and to tell Bernanke that he's good-looking and funny and we'll love him no matter what he does or doesn't do with short-term interest rates. We need to prevent our government from going deeper into debt, thus further devaluing our currency and risking the foreign investments that help support us. So homeowners need to accept that they're not moving into a bigger house in three years, stock owners have to learn that their portfolios are going down for a while, and large tech companies have to stop paying hundreds of millions for social networking sites that kids get sick of after a while.

An empire that believes spending is a patriotic act is perilously close to its end. But at least we will have left future civilizations the invention of the 10-year interest-only adjustable-rate sub-prime mortgage.