How does that old saying go? Those who refuse to learn from history are bound to . . . um, run for Congress?
Democrats have decided that since the first economic stimulus provided virtually no economic stimulus, it’s time to double down and do it again!
Having touched the hot stove and gotten burned, they’ve decided the lesson is to hold their hand on the stove even longer.
The New York Times says that many economists agree with the Democrats’ assessment. The story quotes former Clinton Treasury Secretary Larry Summers, who attended a meeting of Democratic congressional leaders to devise a plan. Summers is quoted as saying, “This is a serious situation. We are in much more danger of responding inefficiently than in responding excessively.”
There goes any respect we might have had for Larry Summers.
The story says that Speaker of the House Nancy Pelosi (D-CA) and other Dems want the package to “include spending for roads, bridges, schools and other public facilities, as well as aid for states confronting smaller tax revenues in the face of the housing downturn.”
Here’s a clue: if the projects included in a “stimulus package” take years to complete—such as “roads, bridges and schools”—it’s not a stimulus package. It’s a pork-filled effort to increase the number of Democrats in Congress.
In the last stimulus package, which passed in February, Congress handed out $100 million to the public. The money provided only a blip in sales. And it will have zero long term effect.
Think of it like this: A person has several dollars stuck in various pockets in his pants. Taking money out of one pocket and putting it in another may make that pocket richer, but it doesn’t make him richer. The only way to make him richer is to make more money.
The last economic stimulus put money in the hands of millions of Americans, but the government will only have to take that money away eventually in the form of taxes—or inflation if it chooses to print more money. Money has changed pockets, but the total wealth remains the same.
The only kind of stimulus package that really works is one that encourages people to work more or harder or smarter. That usually means cutting certain taxes—taxes that Obama has indicated that we will actually raise.
A pro-growth approach would actually stimulate the economy, rather than just going through the motions.