Feb06
Stop Scary Barry: top ten reasons to oppose the spendulus
There has been a swift and wonderful Republican uprising against the monstrosity that is currently making its way through the senate. President Obama and the Democrats are calling it a stimulus package, but it’s any thing but a stimulus. As was reported in the Washington Times yesterday, the CBO came out with its report and said that this “stimulus” will cause our economy more harm in the long term than if we did nothing at all.
President Obama’s economic recovery package will actually hurt the economy more in the long run than if he were to do nothing, the nonpartisan Congressional Budget Office said Wednesday.
CBO, the official scorekeepers for legislation, said the House and Senate bills will help in the short term but result in so much government debt that within a few years they would crowd out private investment, actually leading to a lower Gross Domestic Product over the next 10 years than if the government had done nothing.
CBO estimates that by 2019 the Senate legislation would reduce GDP by 0.1 percent to 0.3 percent on net. [The House bill] would have similar long-run effects, CBO said in a letter to Sen. Judd Gregg, New Hampshire Republican, who was tapped by Mr. Obama on Tuesday to be Commerce Secretary.
This is dire information that President Obama and his Dems in the senate are ignoring. The reality is this bill will only stimulate the government, not our private sector economy and that is bad news for everyone. There are other reasons to oppose the spendulus. Freedom Works outlines ten of them:
Top 10 Reasons to Oppose the Stimulus
As with medicine, the first rule of law making should be first, do no harm. The “stimulus” bill fails this test spectacularly. Among so many other reasons to tell your U.S. Representative and Senators in Washington to oppose the stimulus, the Top 10 are:
1. The Stimulus Will Not Work
Our history is replete with examples of “stimulus” spending failing to move our economy toward prosperity–Bush just tried it, Ford tried it. Even Christina Romer, Obama’s Chair of the Council of Economic Advisers agrees. Romer wrote in a study, “Our estimates suggest that fiscal actions contributed only moderately to recoveries.” The New Deal didn’t end the Great Depression and Obama’s stimulus package won’t end this recession. In fact, two UCLA economists published a study in 2004 finding FDR’s similar New Deal policies prolonged the Great Depression by seven years.
It fails because you don’t increase economic output by taking a dollar from one person and giving to another. The idea of “stimulus” spending falls for the ” broken window fallacy”–the allure of what is seen versus what is not seen. We will see the jobs created by the government spending. What we won’t see are the jobs lost because consumers have less money to spend because the government got the money its spending from us–the only place it can get money.
2. The Stimulus follows the same plan that ruined Japan’s economy
Japan, after a dramatic market crash and a drop in real estate prices responded with government spending not unlike what the US Congress is considering today. In fact, they had 10 stimulus bills between 1992 and 2000, spending billions on infrastructure construction, building bridges, roads, and airports as well as pouring money into biotech and telecommunications. While many countries enjoyed booming economies and falling unemployment during this time, Japan had a lost decade, seeing its unemployment more than double. They spent double the US level of GDP on infrastructure, and now have a lousy economy and have one of the highest national debts in the world.
After 10 stimulus packages, Japan has gone from having the second biggest economy in the world by a long shot, to being well behind the new number two, China, and is close to falling behind India. We do not want to follow their lead.
3. The Stimulus is full of Wasteful Projects
While we were told the stimulus bill would focus on rebuilding America’s infrastructure–mainly the roads and bridges–only 5% of the current bill goes to such projects. The rest of the bill goes to pet projects like:
* $400,000,000.00 for researching sexually transmitted diseases
* $200,000,000.00 to force the military to buy environmentally-friendly electric cars
* $34,000,000.00 to renovate the Department of Commerce headquarters
* $75,000,000.00 for a program to end smoking which, if successful will bankrupt the State Children’s Health Program Democrats are about to pass (SCHIP) that is paid for by cigarette taxes
* $650,000,000.00 for digital TV coupons
* $50,000,000.00 for the National Endowment for the ArtsThese programs are just the 2008 version of the ” midnight basketball” program that derailed Bill Clinton’s attempt to ram through a “stimulus” bill in 1992. Despite that bill failing, the economy quickly recovered and the economic boom of the 1990s began.
4. The Government Can’t Afford the Stimulus
President Bush pushed the government deep into a $1.2 trillion deficit this year, the third time he has set a record for biggest deficit ever, and President Obama’s stimulus bill follows his lead, piling on more debt. The deficit in 2008 amounted to about 8 percent of GDP. The entire debt is about 35 percent of GDP.
Even for those who do still believe in Keynesianism, it is important to remember his theory didn’t start with the government already over a trillion dollars in the hole, he was generally operating from balanced budgets.
5. We Can’t afford the Stimulus
How much is $825 billion? The Heritage Foundation has calculated that that comes to over $10,000 per American family. To further put that in context, on average, families annually spend:
* $2,230 on apparel and services
* $3,595 on health care
* $4,322 on food at home
* $11,657 on shelter6. The Stimulus is Bigger Than the Economic Output of Most Countries
If this bill were a country, it’d be the 15th largest country in world, ranking between Australia and Mexico. It is bigger than the economies of Saudi Arabia and Iran combined. In fact, the $875 billion it calls for is more than all the cash in the United States.
7. Central Planning like the Stimulus Doesn’t Work, Ask the USSR
If centrally planned government spending on a grand scale produced economic growth, the Soviet Union would have won the Cold War. If government spending on a grand scale produced economic growth we would be in the middle of the Bush Boom right now. It doesn’t. Working, saving, and investing leads to economic output and increases in productivity lead to growth.
As economics professor Steven Horwitz said, “The stimulus plans assume consumption is the source of growth. It is not. It is the consequence of said growth.”
8. Remember the $750 Billion Bailout from this Fall?
It was just a couple months ago when we were told if we would just quickly hand over $750 billion to the Treasury Secretary to bailout his friends on Wall Street, he would make the economy all better. That didn’t work, and neither will an additional $825 billion.
9. This Money Doesn’t Grow on Trees
And this has nothing to do with paper money being made of cotton and linen. The only way the government gets money is through taxing, borrowing, or printing–that is, it has to take it out of the economy in order to put it back into the economy. If government borrows the money for the stimulus, then it will either have to print money later or raise taxes to pay it back. If it raises taxes to pay for the stimulus, it will, in effect, be robbing Peter to pay Paul – probably with interest. If it prints the money, inflation decreases the value of the dollar for every American – robbing Paul to pay Paul.
10. Economists do NOT Agree this is a Good Idea
No matter how many times supporters of the bill say it, economists do not all agree this bill is a good idea. In fact, hundreds of economists have come out against it, including Noble Laureates, who signed a letter the Cato Institute ran as a full page ad in several major newspapers opposing the stimulus. Still more economists submitted statements to the US House of Representatives opposing the stimulus proposal.
And this only scratches the surface, there are so many more reasons to oppose the stimulus.
I really hate to keep pointing out the obvious, but the party of small govt. and responsible spending did anything but for the past 8 years. How is it the party that laid waste to the country’s economy has suddenly found religion? It just reeks of hypocrisy.
No it doesn’t reek of hypocrisy. You assume that because I supported some of Bush’s policies that I supported all of them. I did not. I and many other conservatives fought hard against Bush’s social spending just as we’re fighting hard against this bill.
I concede that it’s different if you opposed social spending during the last administration as well. Unfortunately, it just seems like blind obstructionism by the house and senate Republicans because they’re the same guys who rubber stamped Bush’s spending.
Not all rubber stamped Bush. There were some who were disgusted at his spending and called him on it. Your point is taken, though, because many did rubber stamp. Nonetheless, you have to admit that any social spending Bush did is dwarfed by this bill. And just because Bush supported social spending doesn’t give the Democrats the ticket to spend more than we’ve ever seen before. Geez, this thing costs more than the wars in Iraq and Afghanistan combined, and they were necessary to our national security. What’s this bill going to get us? Nothing but a massive debt and that’s it because our economy will come out of a recession on its own anyway whether we do anything or not. Yes, it will be hard if we do nothing, but it’s better than strapping a massive debt that will take decades to pay off and will slow down growth of our GDP in the future. This is what the CBO said.
What we should be doing is allowing the economy to do what it needs to do and if banks and other companies fail, so be it. As the economy works its way back, we should slash taxes, business and personal, and if there is any spending, make it on things we actually need. Yes, roads, dams, and bridges need to be fixed, so do that; however, you must remember that those projects may take at least a year to get up and running, so they’re not the most stimulative thing in the world. But as the economy makes its way back, we should make sure those who are in the most dire straights have what they need to make it through with temporary programs. But this bill is spending on every single program the Democrats have wanted for 40 years, most of it not happening until 2010-2012. How is that a stimulus? Honestly. And you better believe these programs won’t go away after the economy comes back; rather, they’ll be included in the budget’s baseline from here on out. You don’t take advantage of an emergency to tack on every program possible to the government’s budget.
Even the wars in Iraq and Afghanistan that you hated will come to an end, so that the spending comes to an end, too. I don’t see this spending ever coming to an end.