Economy, Obama, Stimulus – oh my!!

January 31, 2009 at 2:18 am Leave a comment

Our new president hasn’t wasted any time working on his promises to stimulate the economy and bailout industries.  A new stimulous bill has worked its way through the House of Representatives (although every single Republican voted against it), and is now up for alterations and debate in the Senate. President Obama has made a few claims about this bill – it will make “dramatice investments to revive our flagging economy”, it will help all the unemployed and those fearing unemployment, and it will create jobs.

Sounds great, right?  Let’s take a look at what is actually in this nearly $900 billion dollar bill – a bill that, incidentally, is about the size of Congress’s entire delecation of funds for a year, and costs more than the entire Iraq War.  Propititious beginning, wouldn’t you say?  Oh, and did I mention this bill will create thirty-two new government programs?

This bill includes $400 million for global warming research; $1 billion for Amtrak, that railroad company who hasn’t earned a profit in four decades; $650 million (extra) to help consumers convert their cable TV from analog and digital; $600 million to buy new cars for federal employees and government agencies; $50 million for the National Endowment of the Arts; $44 million to renovate the headquarters building of the Agriculture Department, and many more equally amazing job-creating opportunities.  (You can read the whole list here).  I mean, seriously? 

The Wall Street Journal estimates that only about $90 billion – less than 5%, and only about twelve cents to a dollar – is really going to be used for things that could plausibly create jobs, like the public works-building infrastructure they’ve been touting.  (Most of the money for those projects will not be spent until after 2010, by the way). 

What this bill is really doing is “extend[ing] the reach of the federal government across the U.S. economy by reshaping policy on energy, education, health care and social programs.”  This bill will “temporarily” allow all unemployed people to join Medicaid, which will expand this nationalized health care by millions.  And did I mention the stimulous is weak on the job-creating front?  Rather than trying to take care of everyone’s needs, the government could simply try to create conditions for a thriving economy, which would create it’s own jobs and take care of the public’s needs much more smoothly and efficiently than the government.  They could, for instance, give tax cuts to more people besides the very lowest brackets.  That may be a nice gesture, but practically speaking, they hardly pay any taxes. 

 

And check out this quote from a WSJ opinion:

As for the promise of accountability, some $54 billion will go to federal programs that the Office of Management and Budget or the Government Accountability Office have already criticized as “ineffective” or unable to pass basic financial audits. These include the Economic Development Administration, the Small Business Administration, the 10 federal job training programs, and many more.

Does this new package really fulfill all those lofty promises and goals?

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Entry filed under: Economics.

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