Keep your $800 billion, Uncle Sam

Normally I’m not one to turn down free money, but just this once I’d like to tell Uncle Sam to keep his greenbacks.

The $800 billion economic stimulus package currently facing Congress is a recipe for disaster. The new plan would give most working Americans $500 over two years. Free money like that can be hard to resist, but here’s why we should.

Last year an stimulus plan gave $300 or more to most Americans filing a tax return. This plan was supposed to boost our struggling economy. But the economy crashed anyway. The stimulus package didn’t cause the crash, but it sure didn’t prevent it.

Lump sum handouts are a bad idea. Poor economic climates tend to spook Americans into holding onto their money, which leads to fewer major purchases (home repairs, cars, ridiculously large flat screen TVs), fewer dinners out and fewer vacations. When friends and neighbors start losing their jobs or homes, we all tend to spend less money…because we could be next. We frantically try to save our pennies for the rainy day that could strike at any moment.

While it’s easy to think that handing each of us a wad of cash and telling us to go shopping will remedy these fears, it’s not that simple. For starters, the amount would need to be much larger to really encourage us to spent it, say $5,000 instead of $500. A measly $500 is hardly enough for a down payment on a car, never mind a down payment on a new house; and you can barely buy a new refrigerator, forget about a new roof.

Anyone who’s even a little finance-savvy knows the best way to handle a windfall is to put half the money directly into savings and use the rest to splurge on a big purchase. So at best we’ll see 50 percent of the stimulus package flowing back into the market; Americans will hoard the other half. The money won’t be spent in a way that encourages growth either. We’ll stock up on groceries at Cosco or Wal-Mart rather than supporting local restaurants.

The government should keep the cash and instead offer incentives (see: tax deductions) on certain purchases, such as cars or home improvements.

We could take it even further. Allow anyone who buys a new car this year to deduct 50 percent of the cost on their tax returns. Make it 100 percent of the cost for hybrid or other “green” vehicles. Encourage energy efficient home improvements with similar incentives (like deducting the cost of making a heating system more “green” or even the cost of installing solar panels or whatever the latest energy-saving trend is these days). Congress can promote economic growth while reducing America’s carbon footprint, and democrats will be too busy loving the energy savings to realize that they voted for a tax cut.

In addition to the individual rebates, the stimulus plan offers what are sure to be equally ineffective rebates to businesses and hands over scores of cash to state governments in a “Medicare matching rate” plan. The faults in these are easier to see so I won’t go into detail here.

Handing taxpayers checks with a note saying “please spend this on xyz” never pans out. This case is no different. The number of taxpayers who will actually use the funds in a way the government would like pales in comparison to the number who will stuff it under their mattresses.

Oscar Predictions

With the presidential election well in the past and our economy still in the pits, I’ve lately been feeling politically uninspired.

Since this blog was originally intended to be as much about Hollywood gossip as politics, I present my completely non-expert predictions for the 2008 Academy Awards. Some may say I’m unqualified to forecast Oscar wins, having no professional experience in the film business or even in writing about film, but I do watch a lot of movies and I’m good at guessing. I’m also good at being right.

Click here for a full list of nominees.

Best Picture: "Milk"
You may think "Slumdog Millionaire" has this one in the bag after its Golden Globe victory, but the Academy might surprise you. In the past, the Golden Globes were often a good predictor for Oscar wins (think "The English Patient", "Titanic"), but over the past several years that trend has faded. When "The Aviator" won the Golden Globe, "Million Dollar Baby" won the Oscar; when the Golden Globes honored "Brokeback Mountain", the Academy chose "Crash"; last year "Atonement" grabbed the Golden Globe but "No Country for Old Men" reigned victorious at the Oscars.

Best Actress: Kate Winslet for "The Reader"
This was a powerhouse year for actresses and the caliber of nominees is impressive, but the buzz surrounding Winslet’s haunting performance seals her win in this category.

Best Actor: Sean Penn for "Milk"
It could be argued that the honor really should go to Mickey Rourke for “The Wrestler”, but the Academy loves Penn and his performance as Harvey Milk is subtly brilliant.

Best Supporting Actress: Penelope Cruz for "Vicky Christina Barcelona"
Woody Allen movies have a history of winning awards for supporting roles.

Best Supporting Actor: Heath Ledger for "The Dark Knight"
No one else has a chance, or deserves it more. Ledger's performance is thrilling.

Best Director: Danny Boyle for "Slumdog Millionaire"

Best Original Screenplay: Dustin Lance Black for "Milk"

Best Adapted Screenplay: Simon Beaufoy for "Slumdog Millionaire"
If you read how bad the original book is, you'd appreciate the genius it took to masterfully recreate this story for film.

Best Foreign Language Film: "Waltz With Bashir"
To be honest, I haven’t seen any of the films nominated in this category. I usually wait until after the Oscars and see the one that wins (reading all those subtitles can be exhausting). But I’m still comfortable predicting this animated gem will win, not just because it won at the Globes. The film is about the 1982 Lebanon War and Hollywood loves foreign movies with messages they can distort and relate indirectly to American politics.

Best Animated Film: "WALL-E"
Almost unfair to anyone else who made an animated feature last year.

Best Art Direction: “The Curious Case of Benjamin Button”
The production design team on this film must have had their hands full but the result is striking.

Best Cinematography: Claudio Miranda for “The Curious Case of Benjamin Button”

Best Film Editing: I would love to see this award to go Daniel P. Hanley and Mike Hill for “Frost/Nixon” but Chris Dickens is more likely to win for “Slumdog Millionaire”.

Best Costume Design: Albert Wolsky for “Revolutionary Road”

Best Original Song: Peter Gabriel’s “Down to Earth” actually has the upper hand here because the two “Slumdog Millionaire” songs may cannibalize each others' votes.

Best Original Score: Thomas Newman for "WALL-E"
Newman's "Finding Nemo" score was true genius and I'm unfairly biased toward his work. But I still think "WALL-E" is the most likely bet here.

Best Makeup: “The Curious Case of Benjamin Button”

Best Sound Editing: "WALL-E"
Most of what you hear in the film is sound effects, and Ben Burtt created each squeak and whistle with poetic artistry. The academy usually gives sound awards to action films, but "WALL-E" earned its stripes on this one.

Best Sound Mixing: "WALL-E" again.
It's possible for films to win for both sound mixing and editing ("The Bourne Ultimatum" won both last year, as did "King Kong" in 2006). If "WALL-E" takes home only one of the two it will be for sound editing, and "The Dark Knight" will win in this category.

Best Visual Effects: “Iron Man”

I was going to select my predictions in the short film categories by throwing into a hat strips of paper with the film titles, but I’ll spare you the process. Don’t forget to make your own predictions and find out who wins on Feb. 22.