Not another futile federal stimulus bill
About six months ago, President Obama and the top Democrats in Congress warned Republicans that if they were successful in stopping the $787 billion economic stimulus bill, the nation’s unemployment rate would rise to 9 percent by 2010.
The Republicans took their chances and voted “no.” They couldn’t stop the massive “porkulus” measure, but evidently it didn’t matter: unemployment kept rising anyway. The jobless rate hit 9.5 percent in June, a half-point higher and six months ahead of the Democrats’ predictions for an unstimulated economy.
In arguing for the stimulus bill, which was passed back in February, the president’s economic advisers said all that federal money flowing into the economy would keep unemployment below 8 percent. It didn’t happen: The money didn’t flow and people continued to lose their jobs.
Unemployment now stands at its highest point since the deep recession of 1982.
So what are Democrats planning to do now? Some are thinking about passing another stimulus bill. Recently, Laura D’Andrea Tyson, one of the president’s economic advisers, said the country could benefit from a second stimulus bill, this one focused on infrastructure.
Actually, it would be the third stimulus package since January 2008. President Bush signed a stimulus measure that featured tax rebates. The Obama stimulus bill contained tax rebates, but the bulk of the stimulus took the form of federal spending for all sorts of stuff — energy, educa tion, the environment, so-called “shovel ready” projects.
Apparently, the projects and the shovels weren’t ready. So far, the stimulus program has allocated about $56 billion — a mere drop on a shovel in a $13 trillion economy. And most of that money is sitting in state government accounts. It will take more time to divvy it up and get it into the economy.
Democrats never seem to notice that efficiency is not the federal government’s strong suit. Government bureaucracies diligently check forms and stack paper, but asking them to move quickly to ignite an economic recovery is an exercise in futility. A Congressional Budget Office report issued earlier this year should have driven that point home to supporters of the stimulus package. The report said most of the stimulus money wouldn’t be spent until well into the 2010 fiscal year. But Democrats insisted that the stimulus would give the economy a shot in the arm.
What it did was drive the federal deficit to new heights — or depths. A Heritage Foundation official observed that if the government borrowed the money for the stimulus from the taxpayers, the average family would pay more than $10,000 this year.
Surely Congress won’t strike out three times in a row. A third stimulus package would do absolutely nothing to help the recovery, which depends largely on the shaky but improving health of the financial system. Stimulus Part III would only stimulate the federal Goliath, making him even bigger, more wasteful and more intrusive.