If the purpose of the stimulus bill is to, er, stimulate the economy, this proposed bill ain't going to do it. It's not just Republicans who say so. Now it's the
nonpartisan CBO who is throwing a whole lot of cold water on any claims that this $825 billion of spending will do anything for today's economic problems.
The government wouldn’t be able to spend at least one-fourth of a proposed $825 billion economic stimulus plan until after 2010, according to a new report that suggests it may take longer than expected to boost the economy.
A Congressional Budget Office analysis of President Barack Obama’s plan found that most of the approximately $355 billion in proposed discretionary spending on highways, renewable energy and other initiatives wouldn’t be spent before 2011. The government would spend about $26 billion of the money this year and $110 billion more next year, the report said.
If we're going to spend this money to get the economy on track, wouldn't it make sense to find a way to do it now instead of a year or two from now?
The CBO report analyzed only the discretionary section of the bill, omitting the $275 billion in proposed tax cuts and approximately $195 billion in mandatory spending increases.
The analysis suggests that much of the stimulus may not come until after the economy has begun to recover. The CBO has previously said it expected a “slow” recovery to begin later this year and that the economy will expand by a “modest” 1.5 percent in 2010.
Why would the Democrats craft a supposed stimulus bill that does so little to actually stimulate the economy? David Obey, Appropriations chair, reveals the real reason.
House Appropriations Committee Chairman David Obey, a Wisconsin Democrat, said last week that while lawmakers looked for programs that could be implemented quickly, they didn’t focus exclusively on “shovel-ready” projects because they also wanted the stimulus plan to address longer-term problems.
In other words, they're using the economic situation of today to pass their own favorite agenda items and little of that $355 billion in discretionary spending will do anything to realistically stimulate the economy any time soon.
6 comments:
This is in effect an admission that the economy will right itself in it's own time but the circumstances create an opportunity ripe for exploitation.
As Rahm Emanuel put it, "You never want a serious crisis to go to waste."
[http://online.wsj.com/article/SB122721278056345271.html?mod=googlenews_wsj ]
Food for thought ..
"Why the Great Depression lasted so long has always been a great mystery, and because we never really knew the reason, we have always worried whether we would have another 10- to 15-year economic slump," said Ohanian, vice chair of UCLA's Department of Economics. "We found that a relapse isn't likely unless lawmakers gum up a recovery with ill-conceived stimulus policies."
...
"The fact that the Depression dragged on for years convinced generations of economists and policy-makers that capitalism could not be trusted to recover from depressions and that significant government intervention was required to achieve good outcomes," Cole said. "Ironically, our work shows that the recovery would have been very rapid had the government not intervened."
That IS the current right wing talking point, that FDR's policies prolonged the Great Depression.
Unfortunately it is not borne out by the facts - like the fall in unemployment rate in the 1930s.
Since right wing policies have led us to the brink of the second great depression, those policies have become completely discredited. You are repeating talking points with no credibility, Mr Smith.
As Amity Shlaes pointed out in her book, European economies were in much the same condition as the American economy during the Great Depression, but they did not resort to FDR's New Deal socialistic solutions and recovered much faster than ours. (Given that FDR's advisors were enamored of European type socialism at the time, it's telling that he went so far overboard with the New Deal that he stalled the very recovery he hoped it would bring about.) Between 1933 and 1939, the unemployment rate in the U.S. dropped from 24.9% to 17.2%. The Left's usual explanation for FDR's failure to reduce the unemployment rate further and/or faster was either a) those nasty conservatives blocked him, b) he grew too conservative and quit spending money on his New Deal programs.
Re: Bill B's allegation that the current crises were all caused by conservative policies: there are still You Tube videos of Barney Frank, Chris Dodd and Maxine Waters pooh-poohing the need for reigning in Fannie Mae and Freddie Mac, and calling anyone who dared to suggest it was necessary, as Bush had suggested four years in a row, was a racist.
Conservatives were certainly complicit. Bush (who is no conservative and has been criticized plenty here) was complicit. But so were many liberals.
It's interesting that the clear topic of conversation - or is that mutual political rock throwing - is NOT about Iraq and national security. Who would have guessed during the height of the nomination process in July-August?
Anyway, the U.S., and thus the world, is faced with some pretty serious economic transformations. The adaptability of open market decision making, will be the most effective and efficient means to see the process through to completion. If the government wants to help, it should stay out of the way and provide safety nets for those caught on the disinvestment side of the process.
Unfortunately, as we can see from BB's comment, the real dead man walking is the magical thinking required to sustain the all purpose explanation for any societal problem, "the Republicans did it." Earth to Kool Aid consumers: that's really not going to help. If you firmly believe that growing government is the solution to the economic situation say it and explain how.
You might wish to take into account some interesting information first, however:
First, the ever growing total number of public sector employees just exceeded the combined total number of manufacturing and construction employees. That's good? Adding 600,000 MORE government employees will help?
Second, the latest data shows that the 3 counties with the highest median income in the U.S., as of 2007, are located in the Washington, D.C. metropolitan area. 'Nuff said.
Third, many local and state governments are heading for bankruptcies due to unsustainable commitments for salaries and pensions to unionized public sector employees. And guess what. The unions, as with the auto Big 3, are unbending in their opposition to reform. Public sector employees now earn, on average, higher wages and receive more generous benefits than their private sector counterparts. Sustainable?
Fourth, the looming abyss of total unfunded liabilities, from $56 trillion worth of promises to the Baby Boomers, will be felt within the next decade. Where does the good money come after the bad being wasted on rewards to the campaign contributors/Dem voter constituencies in this "stimulus" bill? In a study published before September, a major credit rating agency predicted Treasury bonds to reach junk bond status by 2016-17.
No, the end of the "Welfare State" model of government in the U.S. and Europe is clearly visible. Can it be avoided? If so, how? And, given the likely outcome, what government model comes after? Will it be a return to real Constitutional government (rediscovering the IXth and Xth Amendments) or something much worse? We live in interesting times.
Nice post, johnsal. Thanks.
I'm noticing a new biddle trend. Any argument put forth that he disagrees with is merely a "talking point" and therefore without merit.
Very lazy, Bill.
Post a Comment