Bush's Stimulus Package

So, the venerable G W Bush has decided to launch a stimulus package to fix the U.S. economy. Anything to take the focus off of the debacle that is Iraq, I suppose. But seriously, the fact that the stimulus package is news (as opposed to the fact that Bush thinks it will work) is really an indictment of just how little the public understands of economics. First things first, the notion of economic stimulus through Keynesian mechanisms is asinine. Here's an analogy. You owe your bookie $1,000, payable today. You have that $1,000 in your pocket. Your bookie calls you and says he won't come pick that money up today, but instead will pick it up in a week. Do you spend that $1,000 now and work your butt off over the next week to get another $1,000 to pay him off, or just hold onto the original $1,000 until the bookie comes to pick it up? Bush thinks you'll choose door number 1. Most economists think you'll take door number 2. They may call it "Ricardian equivalence" or the "permanent income hypothesis," but really it simply boils down to the fact that normal people aren't going to go nuts and drop twenty large on random goods when you push the collection date of their (tax) debt into the future.

However, let's put all the foregoing to the side for a moment. Let's say you do think this sort of economic stimulus will work. You really should be irate at Bush for waiting until now to do it! If Bush just has to wave his magic wand to make the economy perform better, why is he waiting until now? Why not do it when the economy is going along just fine, so that it will perform even better? Surely if you can turn a (say) 0.5% growth rate into a 1.5% growth rate, the same economic policy will turn a 2% growth rate into a 3% growth rate. In other words, if the government can do better than markets when markets are down, why can't they do it when markets are up? Also, in a completely unrelated question, why is government size generally inversely correlated with government growth?

Oh, hey, I do know the answer to this. Markets rarely perform poorly. And when they do, we really shouldn't call the government to fix it, because the poor performance is likely attributable to the government messing something up.