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Wednesday, January 28, 2009

Indeed. Heh. Other Such Bloggy Touchstones.

Shawn Macomber, who is now writing for and the reason I’ll be subscribing to Decibel, forwarded a little something from CATO--which, in sharply rebuking the President for the stimulus bill being debated right now, kindly reminds me that there are a few sane folks left in the country.

it is a triumph of hope over experience to believe that more government spending will help the U.S. today. To improve the economy, policy makers should focus on reforms that remove impediments to work, saving, investment and production.

The new stimulus bill has me terrified. Not just that it will buy us more debt than I ever imagined our country could possibly see within my lifetime (actually, we passed that particular milestone when the first half of the last bailout bill went out the door), but my fear is that all of the non-freakin’-stimulus spending in the package will set a new baseline for government expenditures in the future. Not only will we have bloated budgets to deal with, but the billions in new money sent to welfare and social programs by this particular stimulus package will be seen as part of what is expected in future budgets.

Any attempt to return to previous spending levels will be met with cries of outrage as the evil conservatives try to slash important programs.

It’s amazing how the idea of spending cuts has grown from, well, actual spending cuts to cuts in the proposed increases in spending.

Colorado has been blessed with TABOR, which has forced our state government to make hefty cuts in services when downturns come along instead of raising taxes or going deeper in debt. If California had seen a similar law on its books over the last few decades, I wonder how much better their financial situation would be now?

Some of those cuts are to popular programs and some of them are pretty painful to watch. But no government has unlimited resources at its disposal. No government can continue to spend in the red forever. Colorado ensures that its government can’t spend itself to death; our Federal government seems to have no such limitation.

So, this stimulus bill, which wouldn’t do much in the way of actually stimulating the economy (especially in the short term), would succeed in making our government even bigger. It would succeed in growing social and welfare programs. It would succeed in saddling future generations with even more boomer debt.

But don’t expect it to stimulate the economy, create many new jobs, or make our nation any safer or better. From the Wall Street Journal:

In selling the plan, President Obama has said this bill will make “dramatic investments to revive our flagging economy.” Well, you be the judge. Some $30 billion, or less than 5% of the spending in the bill, is for fixing bridges or other highway projects. There’s another $40 billion for broadband and electric grid development, airports and clean water projects that are arguably worthwhile priorities.

Add the roughly $20 billion for business tax cuts, and by our estimate only $90 billion out of $825 billion, or about 12 cents of every $1, is for something that can plausibly be considered a growth stimulus. And even many of these projects aren’t likely to help the economy immediately. As Peter Orszag, the President’s new budget director, told Congress a year ago, “even those [public works] that are ‘on the shelf’ generally cannot be undertaken quickly enough to provide timely stimulus to the economy.”

And do read the rest. It’s almost painful, but important, to helping understand what the end effect of this stimulus bill might be.

What do you expect for more than a trillion dollars? Miracles?

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I know you won’t believe me, but I totally agree with you.  Every word.

on Jan 28 2009 @ 04:12 PM

At the risk of sounding like Dan Aykroyd in Twilight Zone: The Movie, if you want to read something REALLY scary along these same lines, check out Mark Steyn’s bit in the latest National Review. He really puts it in perspective, and it ain’t pretty. Did you know for instance that when Britain had the IMF bail them out in ‘76, the emergency request to save the nation’s economy was for a mere $4 billion? Lawd how times have changed! And he also points out that if spending a trillion dollars is what it takes now for politicians to be considered really concerned and engaged, we’re going to see a whole lot more trillion dollar bills.

Oh and thanks for checking out Decibel. I think you’ll like it, but don’t go subscribing just for lil ol me if not!

on Jan 28 2009 @ 09:41 PM

A national TABOR amendment is needed. The next amendment to the constitution...?

on Jan 28 2009 @ 10:47 PM

I used to be opposed to that idea; I’ve since changed my mind.

Shawn, you just sank me deep into a deep depression. I don’t blame you, though, since this problem has been growing for a mighty long time.

on Jan 28 2009 @ 10:53 PM

I wish I could find the link again, but I ran across a document a few years ago comparing the economies of Colorado and Tennessee ten years after TABOR passed. It noted that the two economies were roughly equal prior to Colorado passing TABOR, which was why they were chosen, and noted how and why they differed at the end of the period.

The gist of the report was that Colorado’s economy had grown significantly, while Tennessee’s had gotten into significant trouble.

Naturally, such things can’t be allowed to influence politicians, because that would indicate that stimulus packages, increased taxes, and increased government spending might not be the best ideas.

on Jan 29 2009 @ 03:32 PM
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