An overoptimistic stimulus plan

Boston Globe ^ | 1/28/09 | Jeff Jacoby

[MartinaMisc]

RONALD REAGAN loved to tell the story of the unfailingly cheerful little boy who wakes up on Christmas morning to find, instead of presents, an immense pile of manure. Undaunted, he grabs a shovel and starts digging. "With all this manure," he says excitedly, "there must be a pony in here someplace!"

Is there a pony somewhere in the $825 billion "stimulus" plan that Democrats in the House of Representatives plan to bring to a vote this week? The Congressional Budget Office started digging into this immense pile of, uh, deficit spending, and what it found would discourage even a Reagan-caliber optimist.

According to the CBO, less than half of the $355 billion the bill allocates to infrastructure and other "discretionary" projects would actually be spent by the end of 2010; of that, a mere $26 billion would be spent in the current fiscal year. "The rest would come in future years," the Washington Post reported, "long after the CBO and other economists predict the recession will have ended."

Wasn't the whole point of turbocharging this stimulus bill - recall that President Obama had originally hoped it would be ready for his signature on Inauguration Day - that there is no time to waste in pumping these funds into the economy? "If we do not act boldly and swiftly," the president warned in his weekly address on Saturday, "a bad situation could become dramatically worse."

[Erik Latranyi]

If everyone remembers, Clinton had his $30 billion stimulus plan that provided paybacks to inner city mayors.

Obama’s stimulus is nothing but a larger payback.

[ClearCase_guy]

Arthur Laffer argued that lower tax rates can result in higher revenues, and Ronald Reagan proved him right.

Budget analyst Brian Riedl of the Heritage Foundation points out that "mountains of academic studies show how government expansions reduce economic growth."

And that's the next advance in understanding. I think our current economic troubles will persist for years until someone comes along and demonstrates that lower government spending results in higher economic growth.

[mike-zed]

My stomach turns every time this abortion is called an “economic” stimulus plan.

It is a government stimulus plan. It does nothing but shackle the productive economy.