George Bush is sending me a check for $1,200.

That 's what the letter from the IRS says–“Because George is so happy that you've been fruitful and multiplied, we're sending you $400 for each future taxpayer you've sired.”

Check it out, you non-breeders.

Not that this particular windfall makes a lot of sense to me; it's just money they're going to have to tax out of somebody later (and that somebody will probably be my progeny). So I guess the money should go toward the house-hunt, since my kids will undoubtedly be living at home longer as a result.

But I have a modest proposal to solve all that. It's the sort of thing that all those guys that Bush knew at Enron should have told him about. I call it Extreme Supply-Side Economics (or ESSE).

The problem with the US government's balance sheets is all this debt we've been racking up because of tax cuts, a slow economy, and the war. Well, what if there was a way to make the shortfall in taxes go away on paper?

The first step is to pardon Andrew Fastow and make him stealth Undersecretary of the Treasury for Revenue Enhancement. Have Fastow set up a number of Delaware corporations as Treasury “subsidiaries”, and put all Treasury employees on the books of these companies as employees. License these subsidiaries to outsource functions of the Treasury department (like the Mint) and charge a nominal fee.

Have these businesses make tons of money on paper, and incurr huge payroll and income tax bills–bills that exactly match the shortfall in taxes from other sources. Since the companies run the IRS, they can simply move their tax liabilities from the “expenses” ledger to the “assets” ledger. They then forward the revenue they've generated to the government.

Now, obviously, there's a problem here–there's not enough cash to cover all that revenue, since some of it is “pro forma”. This gap can be made up by the subsidiaries
by having the Mint print money to cover their taxes. That's the Supply Side in this plan-the money supply. They then charge back the government for printing the money

The budget is balanced. The economy, on paper, is given a shot in the arm by all this additional private sector employment and revenue. The corporations, privately held, aren't answerable to the SEC or to public scrutiny other than by the IRS–which they happen to operate. More money gets put into the economy from loosened government purse strings, stimulating real growth.

Now, you're probably saying, “Sean, what about inflation?” Inflation, inshmation. With government revenue uncoupled from the realities of the economy, we can finally have a real free market. Bush can have bigger government and smaller government at the same time, by effectively outsourcing a major role of the government to the private sector. Fastow and those he employs can put the skills they learned through financial fraud to use for the good of their country. And my kids will get to keep the $400 each that George sent me.