February 11, 2009
It ain't over 'til it's over: Two Wrongs Don't Make a Recovery
Fact Sheet #6
Economists Do Not All Agree
200 and Growing: The Obama Administration has claimed that virtually all economists support their approach to "stimulus" spending. Nobel Laureates Ed Prescott, James Buchanan, and Vernon Smith recently joined 200 other economists signing a letter opposing the legislation.
Even the CBO: When their own budget office says, "In the longer run, the legislation would result in a slight decrease in gross domestic product (GDP) compared with CBO's baseline economic forecast," Congress has a problem.
Even the President's Advisors: Council of Economic Advisors Chairwoman Christina Romer wrote, "Countercyclical fiscal policy is not achieving its intended purpose." Economic advisor Jason Furman said, "In the past, infrastructure projects that were initiated as the economy started to weaken did not involve substantial amounts of spending until after the economy had recovered."
Even Larry Summers:Last year, the National Economic Council Director wrote, "Poorly provided fiscal stimulus can have worse side effects than the disease that is to be cured.... Fiscal stimulus, to be maximally effective, must be clearly and credibly temporary--with no significant adverse impact on the deficit for more than a year or so after implementation. Otherwise it risks being counter-productive by raising the spectre of enlarged future deficits pushing up longer-term interest rates and undermining confidence and longer-term growth prospects."
Even Peter Orszag: The President's budget director oversaw a 2008 CBO report stating, "Large-scale construction projects of any type require years of planning and preparation. Even those that are 'on the shelf' generally cannot be undertaken quickly enough to provide timely stimulus to the economy."
Experts Do Not All Agree
Protecting Spending: The price of this spending bill, including interest, is currently $1.16 trillion. Under President Bush, America racked up $3.3 trillion dollars in deficits between 2002 and 2009, including the full cost of TARP and '09 spending. At his current pace, President Obama is projected to be responsible for $8.4 trillion in deficits if he has a two-term presidency.
Protecting Welfare: Aside from creating $787 billion in extra welfare costs, both versions of the "stimulus" bill would abolish the historic welfare reform of the mid-1990's that led to a dramatic reduction in welfare dependency and child poverty.
Not Protecting Jobs: The President has said, "I think my initial measure of success is creating or saving 4 million jobs." How do you measure a job saved?
Not Protecting Religion: Both versions of the "stimulus" bill deliberately censor religious speech and worship on school campuses by prohibiting use of any "stimulus" funds for facilities that are used for sectarian instruction, religious worship, or a school of divinity.
Americans Do Not All Agree
62% of Americans Want Less Spending: According to a Rasmussen Poll released on Monday, 62% of Americans want the plan to include more tax cuts and less government spending.
Twice the Jobs at Half the Price
Check out Heritage ideas for providing twice the jobs at half the price at: http://www.heritage.org/news/economic-stimulus.cfm.
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