Read Sen. Talent’s article in the The Daily Caller today on how Congress and the Administration missed the mark again.
Today marks the one year anniversary of the$787 billion “stimulus” bill. The English language — as rich as it is — is not adequate to describe the stupidity of the whole exercise. But the American Spectator makes a noble try.
Using the Administration’s own numbers, the stimulus bill “funded” (not “created”) between 800,000 and 2 million jobs, which means our government spent about $400,000 for each admittedly temporary job it “funded”.
This week marks the anniversary of the $800 Billion stimulus bill. It was supposed to reduce unemployment to 8%. It didn’t work. This new stimulus won’t work either.Economies grow when people use capital or labor in ways that produce more goods and services at lesser costs. Example: If Emerson Electric changes its production process to a motor at $100 instead of $110 dollars, they have just added value to the economy as a whole, because now the economy has the same motors but more money to spend on other things. The technical term for this process is: “free enterprise”. Permanent tax cuts help free enterprise because they increase the returns people get and lead to more work and investment.By proposing various temporary, narrow tax cuts, the Administration is conceding all this in principle. So here’s my question. If tax cuts don’t drive economic growth, why is the Administration proposing these little bits of tax relief? And if they do drive economic growth, why is Washington planning to raise taxes later this year?
The federal government is considering another “stimulus” plan, by which they mean that they will try to get the economy moving through more government spending. I want to ask a good faith question. What would have to happen for the advocates of such a policy to conclude that it doesn’t work?
The government has passed two stimulus plans already. Yet the recession lasted twice as long as the average postwar recession, and – what is worse – the recovery looks and feels an awful lot like the recession. (If this is what prosperity is like, what will the unemployment rate be if we have another downturn?). Let’s suppose that they pass more government spending, and unemployment stays the same. Will they then concede that government spending doesn’t generate economic growth? What if unemployment actually goes up?
One other point. Will this new “stimulus” plan have any money for defense modernization? The last one didn’t. Consider this. If there is an historical example of government spending stimulating the economy, it’s when the government, after TEN YEARS of the Depression, geared up for World War II beginning in 1940. Yet the last “stimulus” package of $800 billion didn’t spend a dime on defense modernization or the defense industrial base.
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“Maybe the “stimulus” isn’t working so well after all. This editorial in the Detroit News points out the barriers to job creation that the Congress and administration have raised.
