For all of this week's talk about President Obama's "second stimulus," why do so many Americans feel less stimulated than chafed? The parade of stimuli that President George W. Bush launched and the stimulator-in-chief has accelerated has left America impoverished, indebted and increasingly jobless. Now Mr. Obama wants more.
Mr. Obama unveiled an attractive item or two while attempting to defibrillate the dreary economy and Democrats' dismal electoral prospects. Supply-siders long have wanted to scrap the depreciation tables and let businesses immediately deduct capital purchases. Too bad Mr. Obama wants to permit this tax-and-simplification benefit only until the end of 2011.
Perhaps seeking the Nobel Prize in Alliteration, Mr. Obama on Tuesday proposed $50 billion for "roads, rails, and runways." This plan supposedly will help some of America's 14.9 million unemployed citizens.
However, that expenditure would span six years, despite the touted "shovel readiness" of public-works projects. Even if one applauds such spending, shouldn't it happen right now?
What about Mr. Obama's previous magnum opus? In February 2009, he signed a $787 billion stimulus, which has swelled to $814 billion. The Congressional Budget Office on Aug. 24 estimated that this measure "created or saved" between 1.4 million and 3.3 million jobs while spending, so far, about 70 percent of this money. Assuming the rosiest scenario, the $570 billion created 3.3 million jobs at a stunning $172,727 each.
Paradoxically, these supposed jobs have grown even as jobs have disappeared. Unemployment somehow has risen from 7.4 percent when Mr. Obama was sworn in to 9.6 percent today. Mr. Obama's rosy scenario seems choked with weeds.
Also aggravating, the Heritage Foundation examined data from the Labor Department, among other reliable sources. In January 2008, one month after the Great Recession officially began, President Bush and a Democratic Congress spent $168 billion to give every American a $600 tax rebate to go buy something pretty. July 2010 was the middle of President Obama's much heralded "Recovery Summer." Between those dates, Heritage calculates, private-sector employment plunged by 7.8 million jobs - a 6.8 percent slide. Meanwhile, federal government employment soared by 198,100 positions - a 10 percent increase. So, while Americans do less with more, the feds have spent 30 months stimulating themselves in a Jacuzzi of taxpayer dollars.
Mr. Obama's "Trains, Planes, and Automobiles" plan is not his "second stimulus," as claimed by journalists who barely can count to three. After Mr. Bush's first stimulus and the $700 billion TARP bailout, Mr. Obama followed his first stimulus with "cash for clunkers" ($2.85 billion), "cash for caulkers" ($5.7 billion), Home Buyer Tax Credits ($23.5 billion), mortgage assistance ($75 billion), up to 99 weeks of unemployment benefits ($34 billion), the Advanced Technology Vehicles Manufacturing program ($25 billion) and last month's sop to government schoolteachers and other public-sector-union members ($26 billion - "paid for" with phony offsets that "would be easiest for Congress to reverse later, such as food stamps," explains Heritage Foundation budget analyst Brian Riedl.)
Add Mr. Obama's so-called "second stimulus," and these nine stimuli total almost exactly $1 trillion. What has this bought us? Auto and home sales collapsed when these temporary rebates and credits expired. Meanwhile, gross domestic product growth has sputtered to 1.6 percent. This economy has walking pneumonia.
Mr. Obama still lusts for a $30 billion Small Business Lending Fund to pay banks to lend to small companies. When Mr. Bush tried this, they used that money to purchase low-risk Treasury bonds. Meanwhile, credit has evaporated as borrowing by nonfinancial corporations fell 62 percent - from $754.7 billion in 2007 to a seasonally adjusted $ 288.7 billion in 2010's first quarter. In terms of lending, Bloomberg News describes this as "the deepest contraction in more than 35 years."
Rather than continue Mr. Bush's folly, Mr. Obama should permanently slash or scrap income and corporate tax rates so entrepreneurs and companies can keep more of the money already in their pockets. Never mind the banks.
So, thank you, Mr. President, for offering to stimulate America yet again. But not now; we've got a headache.
Deroy Murdock is a columnist with Scripps Howard News Service and a media fellow with Stanford University's Hoover Institution. Manhattan financier Brett A. Shisler contributed research for this article.
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