Opinion

  Opinion  

DR. BILL ROY: STIMULUS CHECKS COME WITH IOU FOR OUR KIDS

Now or soon, a government "stimulus check" will be deposited in your bank account or placed in your mailbox. You may initially cheer, but sooner or later you will realize this is just one more step in the weakening of the American dollar and, in fact, represents more debt that must be repaid someday, probably by your children and grandchildren.

Presumably, your only responsibility is to rush out and spend the money, in order to stimulate a lagging economy. And, sure, $600 per adult will help pay the inflated prices you are encountering at the gas pump and grocery counter, but for only a very short time.

While the checks, which will total $130 billion, will be U.S. government checks, they should be signed by a member of the Saud family of Saudi Arabia, or by someone in China, because that's where the money is coming from, and whence it will return. The return mechanisms are simple, and explain in part the weakening of the American dollar.

The Wall Street Journal recently published a chart showing how much the price a barrel of oil has increased in euros and in dollars. For those of us without degrees in economics, the newspaper explained, "since 2003 the dollar price of oil has climbed far more rapidly than the euro price -- 273 percent in dollars, compared to 146 percent in euros," much of it in the second half of last year.

It further explained that "had the dollar merely retained the same purchasing price as the euro, today's price of oil would be below $70 a barrel." Devaluation of the dollar does have consequences.

Add the price pressure on oil by speculators who are betting the dollar will be further devaluated by Republican fiscal policies and the Federal Reserve's monetary policy, and you realize it isn't the sacred law of supply and demand that explains gasoline heading for $4 a gallon, but government economic malfeasance.

Much of the stimulus money that does not leave the country to pay for oil imports will leave the country (after a pause in Arkansas) to pay for "stuff," which we buy mostly from Asia. In turn, Asian governments will buy more U.S. government bonds and hold our progeny for more ransom.

If the stimulus package fiasco isn't enough foolishness, John McCain and Hillary Clinton think calling for a summertime moratorium on collecting the federal gas tax of 18.4 cents a gallon will buy them votes.

Is there any relief in sight?

Maybe. In eight months, George W. Bush no longer will be president and subject to Vice President Dick Cheney's miserable mantra, "Reagan proved deficits don't matter."

But to this point, no candidate has given a "blood, sweat and tears" economic message, and none will unless demanded by the voting public, which is unlikely. Maybe after inauguration.

Bill Roy is a retired physician and former member of Congress who represented northeast Kansas.