by J Scott Christianson, Columbia Daily Tribune Columnist

Oh what a fun time!

Presidential primaries are in full swing, and the stock market is dropping nearly 300 points every day. It’s like watching a WWE cage match taking place on the deck of the Titanic. If anything, it lets us see how candidates react under pressure. Some, such as Rudy Giuliani, run back to their corner screaming, “Tax cuts, tax cuts,” while others such as Ron Paul and John Edwards come out swinging against the corporate takeover of the economy only to be thrown overboard by reporters.

But the presidential candidates shouldn’t really worry. Our current president has a plan and should have the economy “fixed” long before Inauguration Day 2009. Right now, President George W. Bush is considering handing out $800 tax rebates to American consumers. As a student of economics, you can clearly understand how this will help. What? You didn’t study economics? Or you only studied “old economics,” back when deficits mattered? Then let me explain.

Today’s economy is driven by the consumer. The consumer is constantly informed through advertising and entertainment programs about all the things he or she must have to be happy, regardless of whether he or she really needs them for survival or happiness. As such, today’s consumers will borrow large sums of money to get whatever it is they believe they need: big houses, new cars, new home entertainment systems, etc. U.S. consumer debt – debt excluding mortgages – has risen to $2.5 trillion in the past years. That’s about $8,300 of debt for every man, woman and child in the country.

Gone are the days in which a consumer would save up for a purchase. That is old-school thinking. Instant credit equals instant gratification. In today’s economy, living beyond one’s means is a fine way to live. In fact, living a modest lifestyle can be a sign that there is something seriously wrong with you.

So consumers toil at their jobs, paying an even larger portion of their incomes to interest and fees on their borrowed money. Which leads us to the real beneficiaries of our new economy, the debt investors. Debt investors make their money on extending debt to consumers, living entirely off the interest and fees that consumers pay on their debt. Debt investors are the owners of companies such as Merrill Lynch, Citibank and UBS and invest in types of securities that most of us have never heard of – such as collateralized debt obligations (CDOs) and collateralized mortgage obligations (CMOs) – to tap into the consumer’s interest payments.

This is not to say that these debt investors don’t work for their money. It took them nearly three decades to complete their purchase of Congress and the White House. And even though they now own buildings on Pennsylvania Avenue, they still have to work hard to ensure that their ability to make money from the consumer is unfettered by oversight and regulation.

So Bush hopes to get the overextended American consumer to start spending again by handing each an extra $800. With any luck, consumers will leverage this $800 to get more credit and make some big purchases, which will in turn help the investors “earn” more interest and fees. I think this is what they mean by “a rising tide lifts all boats”: Rising consumer debt equals rising income for the debt investor.

It seems like a fool-proof plan, with only one possible flaw: What if American consumers have started to wise up? What if they have started listening to Dave Ramsey and Suze Orman over the past weeks and months? What if they use that additional cash to pay down their debts or to save it for an early and well-deserved retirement? Ack! Disaster! If consumers turn into savers, it could spell ruin for the debt investor and the stock market.

It seems likely that this will happen some day. The overextended American consumer simply can’t spend or work forever. Any economy that is dependent on those who are already overextended becoming more overextended seems bound to come to a screeching halt at some time.

But don’t fear, Bush and several of the presidential hopefuls have a backup plan: more tax cuts. Or as Bush calls it: “A shot in the arm … to keep ours a fundamentally strong economy healthy.”

It has been more than seven years since the federal government has been in any danger of having a surplus of tax revenue. National debt is on track to top $10 trillion in the next year, our trade deficits have caused the dollar to be devalued and we have an expensive war dragging on. So you might think that the main problem with our economy is not that the federal government is taking in too much tax revenue. One might even think a spending cut or two would be in order. But that is just old-school thinking.