Posted by: Debby Durkee | September 7, 2010

More stimulus? Really?

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More stimulus? Really?

On Labor Day, the president touted a new “stimulus” plan. Smaller but wiser? Smaller, yes, but exactly what will this stimulus stimulate? He says “jobs.” We say “his voters,” just like his first one. He’s the president of the few not the many, and this stimulus will stick it to the many (and those not yet born) to pay off more of his union voters. This column is from Dr. Zero over at

President Obama “unveiled” his new “stimulus” plan in Wisconsin (yesterday).  It was a lot like watching an alcoholic unveil his new plan to get sober by switching to lite beer:

We’re going to “fire up sluggish economic growth” by plowing another fifty billion deficit dollars into roads, rail, and airports?  It’s hard to believe even the American media would be lazy enough to write such a headline with a straight face.  Snip –

In the fading days of the Democrats’ disastrous reign, we’ve come to a moment when they’re begging us to let them “create economic activity” by hiring one more team of union excavators to dig some random holes, and one more team of union construction workers to fill them right back in.

State governments are still sitting on hundreds of billions in unspent money from the first massive “stimulus” plan.  Why can’t they cut a few bucks out of their slush funds to build these desperately needed roads and airports?  If nearly $800 billion in madcap government spending produced nothing but massive unemployment, plus a bumper crop of road signs touting the glory of the stimulus plan, what good is another $50 billion going to do?

The Administration assures us its little espresso shot of new stimulus spending will be revenue neutral, paid for by “ending tax breaks for oil and gas companies.”  Oh, that’s just wonderful. Those tax hikes on oil and gas will be passed directly along to the consumer, in addition to hindering investment in the development of new energy resources.  The last thing a fragile, recessionary economy needs is an increase in energy costs.  I’m all in favor of tax simplification, but it has to be across the board

They’re insane if they think an electorate prepared to sweep the President’s party out of office would be excited by the thought of purchasing another fifty billion dollars’ worth of failure.

Americans as a whole are shaking their heads in disbelief and growing more and more determined to stop the arrogance of an administration that thinks we’re stupid enough to keep buying what he’s selling while he’s selling us down the river. Read it all here:

Related: Obamanomics – more stimulus?

The Wall Street Journal isn’t buying what the president is selling either. They review how well Stimulus I (under George W. Bush) worked, Stimulus II under our current president worked, and why we shouldn’t pass another one. They also say the blaming of Republicans is bizarre when it’s the Democrats and the administration’s own pushy policies that are continuing the unraveling of the economy. This is an unsigned editorial.

…In February 2008, (President Bush) and House Speaker Nancy Pelosi agreed on a $168 billion combination of federal spending and temporary tax rebates that were supposed to maintain growth through the housing market decline that election year.

Larry Summers, who would later become Mr. Obama’s chief economic adviser, made the case for such a stimulus to boost domestic “demand” in late 2007…

Then CBO Director Peter Orzag agreed, so that’s how we got the first stimulus package.  Then, we know how we got Obama’s stimulus…

…the $814 billion plan that was also supposed to make up for lost private demand. It too was a combination of one-time tax rebates and spending, mostly on social programs like Medicaid rather than on “shovel-read projects.” Mr. Summers promised this would have a 1.5 “multiplier” effect on GDP growth…

All during this time, the Federal Reserve was also feeding the economy with unprecedented monetary stimulus…

Congress passed other industry-specific stimulus bills—cash-for-clunkers, the $8,000 home-buyer’s tax credit, mortgage payment relief, and jobless pay up to 99 weeks. Yet all of this has merely stolen auto and home purchases from the future, with sales falling once the tax benefits expired….  Snip –

In sum, never before has government spent so much and intervened so directly in credit allocation to spur growth, yet the results have been mediocre at best. In return for adding nearly $3 trillion in federal debt in two years, we still have 14.9 million unemployed. What happened?

We have liberals saying the stimulus was too small to do much good. Still Obama says it’s the fault of Republicans for blocking all of his amazing programs. Then there’s the argument that this recession is bigger and badder than others. Time to debunk these:

Given that the stimulus program was so poorly structured and so overtly politicized, how do we know that, say, $500 billion more would have made a difference even on Keynesian terms? The money for government spending has to come from somewhere, which means from the private economy. Our guess is that by ensuring even higher debt and implying higher taxes, a bigger spending stimulus would have done even more harm.

The column goes on to say that making the claim that the stimulus “saved” millions of jobs “is a the result of ‘plug-and-play’ economic models that multiply the amount of dollars spent by the assumed impact on jobs based on previous studies, and, voila, the jobless rate would have been higher without such spending. In the real world, the economy lost 2.51 million jobs.” So, why is this recession so difficult to tame?

Democrats embarked on the most sweeping expansion of government since the 1960s, imposing national health care, rewriting financial laws from top to bottom, attempting to re-regulate the telecom industry, and imposing vast new costs on energy, among many other proposals. Not to stop there, in January it plans to impose a huge new tax increase on “the wealthy,” which in practice means on the most profitable small businesses.

Central to Mr. Obama’s political strategy for passing these priorities has been trashing business and bankers as greedy profiteers. His Administration has denounced or held up as political or legal targets the Chrysler bond holders, Wall Street bonuses, Goldman Sachs, health-insurer profits, carbon energy investors, and anyone else who has dared to oppose any of its plans to “transform” U.S. society.

Only yesterday at a Labor Day event in Milwaukee, Mr. Obama was at it again, declaring that “anyone who thinks we can move this economy forward with a few doing well at the top, hoping it’ll trickle down to working folks running faster and faster just to keep up—they just haven’t studied our history. We didn’t become the most prosperous country in the world by rewarding greed and recklessness.”

Whatever else one can say about such rhetoric, it is not the way to restore business confidence or turn a fragile recovery into a durable expansion. It has only spread fear and even greater uncertainty.

Blaming Republicans is ridiculous. They only had 40 (now 41) senators and are a minority in the House as well.

No Administration since LBJ’s in 1965 has passed so much of its agenda in one Congress—which is precisely the problem.

Mr. Obama’s economic problems are intellectual and political… Democrats purposely used the recession as a political opening to redistribute income, reverse the free-market reforms of the Reagan era, and put government at the commanding heights of economic decision-making.

The only path back to robust growth and prosperity is to stop this agenda dead in its tracks, and then by stages to reverse it. These are the economic stakes in November.

When the history of this self-absorbed, narcissistic and abusive administration is written, historians will point to the ever-increasing and pushy spending policies of Obama and his Democrats as a dark cloud in the history of the republic. The silver lining is the resurgence of the American spirit along with the determination to defeat an internal enemy of the people. A president who tried to defeat the spirit of American independence with continuous blows to its pride, honor and liberties while attempting to use the hard-earned wealth of his own people to tear America down. Repulsive.   Read it all here:


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