THERE'S BEEN A

groundswell of cross-party teamwork supporting the $168 billion stimulus package, with an unusually cooperative President Bush eager to work with Congress to quickly iron out a plan. The president called it "an example of bipartisan cooperation at a time when the American people most expect it."

Of course, bipartisanship unto itself is not an inherent good. Bad legislation doesn't get any better simply because it's supported by both political parties. The accomplishment now claimed by both Democrats and Republicans is that of two thieves congratulating their own cleverness as they clean out your safe deposit box.

Indeed, the much-heralded stimulus plan is a charade, designed not to boost the economy but the dismal favorability ratings of both the president and Congress. Based on bad economics and immoral philosophy, it will inevitably prolong the economic malaise its backers hope to avert.

At its heart, the stimulus package is a redistribution of wealth, taking money from those who've earned it and giving it to those who haven't on a massive scale that would make Robin Hood blush. Starting this spring, just a few months before November's presidential election, more than 130 million households will start receiving checks. The rebates of up to $600 for individual taxpayers ($1,200 for couples) would phase out for those with incomes above $75,000 ($150,000 for couples), meaning that those who pay the most taxes get the smallest rebates and the wealthiest taxpayers receive nothing at all.

Bizarrely, the bill gives tax rebates to millions of people who don't pay income tax, a group including low-income seniors living on Social Security and military veterans on disability. Most people will also receive a $300 check for each dependent child.

"We believe the stimulus, the way it is targeted, will put money into the hands of those who will spend it immediately, injecting demand into the economy and therefore creating jobs," said House Speaker Nancy Pelosi (D., Calif.).

Pelosi's estimate and her economics, however, are deeply flawed. First off, an Associated Press-Ipsos poll found that only 19% of those surveyed said they planned to spend their rebate checks. Rather, the majority planned to pay off bills, meaning that the tremendous demand expected to be created by encouraging citizens to spend money they haven't earned won't likely materialize at all.

Moreover, Pelosi fails to acknowledge that wealth isn't built by stimulating consumption, but by incentivizing production. After all, it's the producers, not the consumers, who power the economy. Wealth isn't created by those who consume, but those who produce, a process that requires long-range planning and a profit motive, neither of which the stimulus does anything to address.

If giving a $600 check stimulates the economy, why not give a $1,000 check? Or $2,000? And if such a plan would truly benefit the economy, then why make the stimulus temporary? The answer is because, when pressed, even those politicians who advocated for the bill would probably admit that reallocating wealth doesn't create much at all, except good favor with constituents who distrust politicians and are soon to go to the polls.

Consider that America has become the wealthiest country in the history of mankind not because we've cut checks to folks who couldn't pay their MasterCard bills, but because we've been a culture focused on producing. All the stimulus package does is reinforce an entitlement mentality that dictates that it's needing things, not earning them, that entitles you to them.

This is why measures such as enlarging the food-stamp program, increasing home-energy subsidies for low-income families and extending unemployment benefits were all attempted to be included in the bill. From buying your groceries to heating your home, our government increasingly says that you're entitled to have your needs met and so it takes other people's hard-earned money and gives it to you. You are entitled to the money not because you did anything to deserve it, but simply because you need it. Those who actually earn their money, and whose productive effort powers the economy forward, have little say in the matter at all.

A truly effective stimulus package would involve a permanent reduction in taxes across the board, especially on the high-income individuals whose productive efforts create the wealth Bush and Pelosi are so eager to give away. Also vital would be a massive reduction in the regulatory burden that has turned the U.S. into an increasingly unfriendly place to do business. The incentives would ensure that the world's next Apple or Amazon.com was created here in the U.S. not in India, Russia or Taiwan.

Speaking at a joint news conference with Treasury Secretary Henry M. Paulson, Pelosi commented how the bill "is a gift to the middle class and those who aspire to it in our country."

It is a gift, although one unwillingly given by those of us not on the public payroll who actually work for a living. A truly fair stimulus package would see those upper-income individuals who already pay the most in taxes receiving the majority of the rebates. But in both Democrats' and Republicans' minds, the fact that you earn your money doesn't entitle you to it. Yet the fact that a struggling family can't pay the heating bill does entitle them to it.

Before wealth can be consumed, it has to be created. And a single tax rebate, of which a large chunk is going to those people who don't even pay taxes, isn't sound stimulus but a shell game. Politicians from both parties are essentially cutting checks with one hand and picking our pockets with the other, hoping that the sleight of hand lasts just long enough for Democrats' liberal guilt to be assuaged, Bush's sagging popularity numbers to rise and presidential ballots to be cast.

Jonathan Hoenig is managing member at Capitalistpig Hedge Fund LLC.