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?