Here is one of the latest revelations: $4 Billion for "Neighborhood Stabilization" What is my neighborhood unstable? Do we need hurricane ties or concrete anchors? What will it slide down the street? No -- this is money for ACORN, the low-income advocacy group under investigation for voter registration fraud.
Did you ever notice BO gives no estimate on how much economic growth the stimulus will foster, or when growth is expected? That is because it is not an economic stimulus package, it is just liberal movements towards socialism.
However, listen to what House Appropriations Chairman Dave Obey, D-Wis., has to say (last paragraph): said the goal is to act now and address problems later. During the Depression, he said, President Franklin Roosevelt "tried lots of things. We'll do the same thing." Did he say we are going to experiment? Good grief! Economic stimulus is common sense. We don't have to "try lots of things." Moreover, Roosevelt's actions were neither constitutional, nor did they dig us out of depression. It took WW2 to end the depression. Hello!?!!
James Pethokoukis over at USNWR does a righteous survey of economists views of the 'stimulus package'; here are a few selections from his analysis (emphasis mine)
Andrew Mountford and Harald Uhlig "analyzed three types of policy shocks: a deficit-financed spending increase, a balanced budget spending increase (financed with higher taxes) and a deficit-financed tax cut, in which revenues increase but government spending stays unchanged. We found that a deficit-spending shock stimulates the economy for the first 4 quarters but only weakly compared to that for a deficit-financed tax cut." In other words, FDR vs. Clinton vs. Reagan, Reagan wins.
Economists Susan Woodward and Robert Hall find that the multiplier effect from infrastructure spending maybe just 1-for-1, less than that 3-to-1 ratio for tax cuts that Romer found: "We believe that the one-for-one rule derived from
wartime increases in military spending would also apply to increases in
infrastructure spending in a stimulus package. We should not count on any
inducement of higher consumption from the infrastructure stimulus."
Massive stimulus didn't work in the Great Depression. As this Heritage Foundation study notes: "After the stock market collapse in 1929, the Hoover Administration increased federal spending by 47 percent over the following three years. As a result, federal spending increased from 3.4 percent of GDP in 1930 to 6.9 percent in 1932 and reached 9.8 percent by 1940. That same year-- 10 years into the Great Depression--America's unemployment rate stood at 14.6 percent." Same goes for Japan and its Great Stagnation of the 1990s.His bottom-line: "...when you look at the economic evidence, it sure seems like an economic recovery package that's heavy on government spending and light on tax cuts is just the opposite of what we should be doing right now." Pethokoukis also has a great list of sources.
BO has failed his history lesson and is going to stick to pushing through the biggest spending bill of all time -- even adjusting for inflation -- in the name of 'economic stimulus'. It is just socialism wrapped in the flag. I conclude we are in serious trouble from a leadership perspective. There is no 'spend wisely' in this bill, it is wholesale income transfer.
Prediction: The end of the recession is a long long way off.
Conclusion: Sell your stocks, if you have any left, put the money under a mattress.
3 comments:
The impulse is to be seen doing something, useful or not.
Yes -- And the press is filling out their dance card...
AVI's right. Still, I would have thought maintaining liquidity--which is what we didn't do during the depression--was sufficient. In the guise of "doing something," we may adopt every liberal government program that's been stalled in the Brookings Institute queue since the Reagan Administration.
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