Returning our cash

There is a growing consensus that the $150 billion stimulus plan -- remember the checks sent out by the IRS earlier this year? -- did not do what it was intended to do: resuscitate a stagnating U.S. economy. But that was before we learned all the details of the widening credit crisis created by bad mortgages and trillions of dollars tied up in congressionally authorized gambling on the economy's future. Nor did we know that the crisis wasn't contained in the U.S. but was, in fact, a world crunch of unprecedented proportions.

While the economic tailspin has clouded the results of the stimulus plan, some economists -- and politicians who voted in favor of mailing out checks -- wonder what the effect of not having such a plan might have been.

The stimulus plan was followed, after financial markets started reeling from the credit crisis, by a $700 billion bailout plan, called a "recovery plan" by many White House advisers and many in Congress who are trying to explain to voters why they supported the massive infusion of government funding into the private sector.

Again, some economists and politicians are wondering now what the effect would have been without the bailout.

A third round of throwing cash at the crisis may be in the works. Some Democrats in Congress want another stimulus package that would mean mailing more checks to taxpayers from the IRS. The first checks didn't have much effect, they say, but another infusion of cash might do the trick.

Or not.

One way of looking at the stimulus checks is to regard the federal cash outlay as government's way of fiddling with the economy. If it works, backers gain political justification. If it fails, it was because opponents wouldn't go along with everything the supporters wanted to give away.

Another way of looking at the stimulus checks, however, is to regard them not as government giving something to taxpayers, but rather returning to taxpayers what is rightfully theirs: hard-earned wages. In effect, the stimulus checks represent temporary tax cuts that, over time, have proven to be effective in bolstering the economy.

The question is: Will such a plan work in light of the worldwide economic meltdown?