In the Matter of Public v. Stimulus Bill
February 13, 2009
One has to go back to Ronald Reagan’s victory in ’80 to find an
occurrence in American politics as beneficial to the nation’s health as
the fact that public support for the Pelosi/Reid stimulus bill is
falling faster than the stock of the administration’s most recent "tax
What, then, do so many Americans know that Democrats and three
Republicans named Collins, Snowe, and Specter don’t?
Well, they know a lot of things, of which a number follow — with notice
given here that the most fundamental piece of knowledge is saved for
Let’s begin with the fact that despite government "stimulus” during the
thirties, the nation’s GDP didn’t regain its 1929 level until 1937, a
year in which a recession knocked it down again.
So much, then, for the notion that the positive effect of a Keynesian
stimulus is supported by the example of the New Deal.
Next, we move on to the assessment of the current stimulus plan by the
"gold standard,” nonpartisan Congressional Budget Office, as reported by
Stephen Dinan in the Washington Times.
Having determined that every three dollars of stimulus spending will
crowd out one dollar of private sector capital, the CBO reports this ill
tiding: Over the next decade, the bill will have the net effect of
reducing GDP growth by .1 to .3 percent below the growth that will occur
with no stimulus whatsoever.
One needs to ponder the bill’s perverse return on investment only for a
nanosecond (or less) to grasp why ordinary folks are responding "no
thanks” to the invitation by Washington’s "experienced” elite to burden
contemporary citizens, their children, and their children’s children
with a near-trillion dollar incubus.
Jobs? While the CBO projects that the Obama, Pelosi, Reid spending spree
will create some jobs in ’09 and ’10, it concludes that by ’11, its
effect on job creation will be "minuscule.”
The cost of these temporary jobs? Well, regarding a question we lesser
folks ask before making every purchase, Democratic politicians and their
three Republican friends suddenly find themselves arithmetic challenged.
Of course, no one is surprised that an exercise in simple division
morphs into a calculus problem for anyone faced with the task of
informing the American people that government jobs don’t grow on trees
but come at a cost of $200,000 each (the 200 grand increased, of course,
by every job that falls short of the president’s 4 million job promise).
From our visit at the CBO, we now move on to two men who know a thing or
two thousand about business and finance, former GE CEO Jack Welch and
financial analyst Peter Schiff.
Speaking on CNN, Welch labeled the stimulus package as nothing more than
"politics” before he pointed out that restoring the nation’s banking
system to health (without taking banks off the hook for their greed and
stupidity) is "a thousand times more important.”
Having distinguished himself by warning the nation of an impending
financial debacle, the insightful, common sense thinking Schiff is
currently sounding the fire bell (inaudible to the aforementioned
politicians) about the colossal danger — not just to the nation’s
economy but to its social stability — created by an Everest of federal
borrowing that exclusively (and, thus, insanely) depends upon foreign
nations to continue purchasing American debt.
Next to last, there is this fact arising from the eternal truth that the
piper never forgoes his pay: The nation cannot bear the burden of the
permanent costs much of the "temporary” stimulus will add to the
Therefore, at some future point, deficit spending caused by (1) the
current "built in” $500 billion deficit (2) losses incurred in various
federal bailouts and guarantees (3) permanent stimulus costs and (4)
costs associated with Medicare, Medicaid, and the administration’s
promised health care reform will indeed require a return to Obama’s
"responsible behavior,” a euphemism that with respect to government
means "draconian cuts in the federal budget” (fat chance) or
"astonishingly huge tax increases.”
And now we come to the most important fact that has caused the American
people to perceive the stimulus bill as a madly irresponsible roll of
It is a fact surrounded by a double irony in that (1) it needs no
explanation by economic experts because it has been perceived and
understood by the most ordinary of human beings since the first king
wallowed in wealth wrung from the sweat of "his” people’s faces and (2)
it was beautifully stated in America by a man who knew little or nothing
about formal economics and lived as much as he could as an economy unto
...this government never of itself furthered any enterprise, but by
the alacrity with which it got out of its way. It does not keep
the country free. It does not settle the West. It does not
educate. The character inherent in the American people has done all that
has been accomplished; and it would have done somewhat more, if the
government had not sometimes got in its way.
No, Henry David Thoreau doesn’t argue for the beauty of anarchy in that
passage. What he is doing, however, is reminding us that government,
which has historically endangered people’s lives and retarded their
pursuit of liberty and happiness, cannot produce a single cent of
Government cannot produce a single cent of wealth but is unrivaled in
its ability to make a piker of the Prodigal Son.
the fundamental truth understood by Americans who are right not just to
be wary but absolutely fearful of a bill conceived by politicians whose
reason for being is to cement themselves in power — the agonizing cost
to the people and their culture be damned.