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LETTER: Stimulus bill won't solve economic woes

Wednesday, February 11, 2009 | 12:19 p.m. CST; updated 12:46 p.m. CST, Wednesday, February 11, 2009

The government should learn to work and live with a realistic budget just like the average American family does. They are out of touch with reality and forcing further debt on hardworking taxpayers is harmful to those families and to America as a whole.

History is set to repeat itself again. The American Recovery and Reinvestment Bill of 2009 that is being debated in Washington has all the hallmarks of a classic deja vu. Last year, the federal government sent out rebate checks in an attempt to stimulate the economy. They also dumped huge sums of money into failing Wall Street banks and insurance firms.

Both had no effect. It's long past time that central planners learned that throwing good money after bad will not stimulate the economy. We must instead cut taxes, reform burdensome regulation and eliminate government waste. It is not until we pay attention to our past history of stimulus failures that we can begin to move toward the future.

 

 

 


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Comments

Christopher Foote February 11, 2009 | 1:13 p.m.

Inanity thy name is Sash.
The OMB (Office of Management and Budget for those who get their news from the radio) has an in depth analysis of both the House and the Senate versions of the stimulus bill. Contrary to what the Sash's found, the OMB concluded that the stimulus bill will in fact have a significant impact on the US economy, both in the near term and in the long term. The impact will be a sizable decrease in further job losses as well as a short term increase in GDP. They did conclude that the negative consequences of "crowding out" private investment by injecting $840 billion into the economy would result in a .1-.3 reduction in GDP in 2019.
Perhaps the Sash's could share their methodology for determining that the stimulus would have no effect on the economy. In addition, I'd be interested in seeing some actual data demonstrating that a continuation of the previous 8 years policy of tax cuts and lax regulation will stimulate the economy. The crisis at hand appears to be a rather striking example of the opposite.

(Report Comment)
John Schultz February 11, 2009 | 1:22 p.m.

The Congressional Budget Office has also done a study that says the recession will reverse course by the middle of 2009, well before most of the "stimulus" money is even spent. Who to believe?

(Report Comment)
Christopher Foote February 11, 2009 | 2:18 p.m.

The OMB is using the data from the CBO report on the senate stimulus bill (the CBO actually did the analysis).
Here's the CBO analysis:
http://www.cbo.gov/ftpdocs/96xx/doc9619/...
I am not familiar with the CBO report you cite. However, even if the recession ends in mid-2009, a major goal of the stimulus bill is to prevent job losses, which the CBO predicts will be significant in the next couple of years.
Peter Orszag, the head of the OMB, says that 75% of the money will be spent in 18 months: http://beta.sling.com/video/show/114526/...

(Report Comment)
Ayn Rand February 11, 2009 | 2:47 p.m.

John might be referring to the CBO report that was removed from the Appropriations Committee Web site. (You can speculate about why.) Some highlights:

- Only about 9 percent of the infrastructure stimulus will be spent by Sept. 30, the end of fiscal 2009.

-Less than half of the highway-construction money will be circulated over the next four years.

- Only about $4 billion in highway-construction funds will get into the economy by September 2010.

Obama's own economic adviser, Jason Furman, said in 2007 that infrastructure spending is one of the "less-effective options" for increasing jobs and economic growth. He wrote that any infrastructure spending would not generate significant short-term stimulus because the money wouldn't be spent "until after the economy has recovered."

(Report Comment)
Ayn Rand February 11, 2009 | 3:03 p.m.

Typo. I meant "said in 2008."

(Report Comment)
John Schultz February 11, 2009 | 3:08 p.m.

Yes, Ayn is talking about the same CBO report I read about a couple days ago. Maybe that is why the PDF link that I was sent, and posted to the Trib board, was not working.

(Report Comment)
Christopher Foote February 11, 2009 | 3:51 p.m.

Here's your CBO report referencing the recession ending in 2009: http://www.cbo.gov/ftpdocs/99xx/doc9958/...
Perhaps you won't be trumpeting it though as they also support an effective stimulus package. They forecast a rather bleak economy in the absence of a stimulus bill. Notably "the economy will produce about $1 trillion less output per year in 2009 and 2010 and significantly less than its potential in 2011 and 2012." Those trillion dollar gaps = a high unemployment rate. So the question is do you want to save $838 billion and see millions of jobs vanish and perhaps the situation gets a whole lot worse, or do you want to try to do something about it, and add roughly 5.8 % of GDP to our debt? (Our debt currently stands at roughly 70 % GDP -thanks Bush ($5.7 trillion in 2000 to $10 Trillion on Sept. 30 2008))

(Report Comment)
Ayn Rand February 11, 2009 | 4:05 p.m.

Between the “Making Work Pay” credit, the EITC increase and the refundable tax credit of $1,000 per child, people who do as little as possible, are irresponsible or both can take their sponging to new heights.

(Report Comment)
Lela Harding April 7, 2010 | 10:18 p.m.

I took my first <a href="http://lowest-rate-loans.com/topics/mortgage-loans">mortgage loans</a> when I was 32 and that aided my business a lot. But, I require the term loan again.

(Report Comment)

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