Economic Relief Package: Bandaid On A Cut That Needs Stitches

The President and Congress are working together to bring an economic stimulus package into being by releasing $145 billion to American taxpayers. This package would put an average of $600 into each taxpayers hand. Don't get me wrong, I like the idea of getting hard earned dollars out of government hands and back into the peoples hands by any means necessary. But I believe implementing this package is somewhat self deceptive.
When one go's to the Doctor for some ill that plagues him I would think that a cure of the root illness would be better than the treatment of just symptoms. This measure may be designed to stave off a recession but will not treat the underlying problem, which means that a recession will happen later rather than sooner. What is more preferable is long term economic growth. In his excellent book "Economics In One Lesson", Henry Hazlitt points out "The bad economist sees only what immediately strikes the eye. The good economist also looks beyond." How quickly we forget the formulas for what works.
The foundation for long term economic growth was poured by the Reagan administration (even our patriotic friends to the left of center can't deny this) with deep across the board tax cuts, a reduction of the federal marginal rate from 50% to 28%, a decrease in capital gains tax and reduction of the number of income tax brackets ( less progressive taxation ). I remember even though I was in a low income bracket my net take home pay was significantly higher. The greater effect however was the longest period of economic growth in our nations history all the way through the Clinton years.
Sending people to the store to buy more stuff may help, but long term growth originates when CAPITAL is removed from the public troughs and placed into the hands of investors in the private sector. Capital used to create new industry and streamline existing industry. Capital used to create new infrastructure, improve production and distribution methods. The idea here is as old as Adam Smith's wealth of nations. Supply creates demand not the other way around. The stimulus package seems to be trying to address the demand side. Are we drifting back into Keynesian thinking?
Again I would like to stress that I'm not against the tax rebate, every dollar taken out of federal hands and placed in citizens hands is a dollar used more efficiently. What I take issue with is calling it an actual economic stimulus. It really isn't and the term is deceptive. Listen to what Warren T. Brooks states in his book "The Economy In Mind" as he talked about the economy of the 70's "Unfortunately, for the past 10-15 years, U.S. economic policies have been dominated by the Keynesian notion that it is demand and government that run the economy,not supply and the market;and that government, through it's fiscal and regulatory policies,can manage the economy by raising or lowering the level of demand, at will.Reinforcing the policies has been the idea that the distribution of wealth is more important than the production of it, that the way to simulate economic growth is to tax money out of savings and investment and redistribute it into consumption and demand. Not surprisingly, such policies have resulted in a soaring of consumer demand(by inflating money income) and a drastic slowing down of supply (investment and productivity), with the inevitable consequence of raging inflation."
Be that as it may it looks like both the Democrats and Republicans are behind it hopefully it will help but ultimately one should not expect a real impact other than a temporary psychological effect.