Monday, February 16, 2009

The $787 billion economic stimulus package that Congress passed Friday, with the support of no House Republicans and only three GOP senators, is a hideous caricature of what its sponsors promised. It was originally advertised by President Barack Obama as something that would create or save 3.5 million jobs and would be timely, targeted, and temporary. The final package clearly flunked the latter two descriptions - it was 1,073 pages of scattergun spending, with much of it extending for a decade - and it offers a “cure” to the jobs hemorrhaging that may be far worse than the disease.

Before Mr. Obama has even submitted his first budget later this month, he and congressional Democrats have increased spending for multiple programs that will be in place for the next 10 years before expiring - a multiyear practice virtually unheard of in American politics that may cost $2 trillion more to fund. The nonpartisan Congressional Budget Office estimated that the full cost of this bill, including its $348 billion debt service and the out-year financing, will reach $3.2 trillion by 2019.

There are countless handouts that are nice (especially for the direct recipients) but questionable in the overall scheme of emergency stimulus planning - increases in spending for the arts, day care centers on military bases, space exploration, water clean-up, and on and on. In each case, one or more persons may get or retain a job, but it still is inefficient make-work like some of the New Deal programs of the ‘30s. Many economists are aghast at the hodgepodge spending and warn of dangers ranging from hyperinflation to stagflation (but it is true that with 100 economists in a room, you may get 200 opinions). The most insulting piece of it was a modest $30 million House Speaker Nancy Pelosi inserted to protect the salt marsh harvest mouse, a tiny rodent indigenous to the San Francisco coast - an obvious earmark in a bill that Mr. Obama said with a straight face would be “earmark free.”

Mr. Obama mocked Republicans for calling this a spending bill. Just as a dog is definitely an animal but an animal is not necessarily a dog, a stimulus is a spending bill but a spending bill is not necessarily a stimulus, and this dog don’t hunt. The longer the stimulus bill was looked at in Congress, the more liberal (in many ways) it became. For example, the original $1,000 rebate for taxpayer families was reduced to $800 - a $29 billion cost cut that went instead to other programmatic increases.

Any positive effect this stimulus will have on the economy at a given point is far outweighed by the clear abuse of the legislative budget process and the fact that its $3.2 trillion price will be a crushing burden on the nation that some experts warn will only cause more fiscal and unemployment problems. We hope they’re wrong and we’re wrong, but the package Mr. Obama will sign Monday is no thing of beauty to just about anyone, so far as we can determine.

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