Tuesday, January 20, 2009

Stimulate now, not in 2011

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.