President Bush is expected to share his economic plan today. The main speculation is that this plan will involve some sort of a tax rebate. CNN Money reports on what one cabinet member — Secretary of the Treasury Henry Paulson — has to say about the expected Bush economic plan:

“What he believes is that we’ve got to do something that is robust. It’s going to be temporary and get money into the economy quickly,” Treasury Secretary Henry Paulson said Friday on CBS’s “The Early Show.” “It’s going to be focused on consumers, individuals, families — putting money in their pocket. And it’s going to be focused on giving businesses the incentive to hire people, to create jobs.”

This is, of course, one of my biggest gripes with the economy and attempts to fix it: That it is too focused on consumers. The idea is not to actually “put money in their pocket,” but rather give consumers money that the government hopes they’ll spend.

An economic stimulus package will be focused on trying to get people to stop saving money against a recession and to start spending it. Instead of focusing on redefining goals for a robust long-term economy, any economic stimulus package will focus on the short-term, and boosting “confidence” in customers so that they will spend more money. Experience says that when someone gets $500 “free money” to spend, they will spend much more than that.

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