Video: Stimulating government, not the economy
posted at 9:24 am on January 27, 2009 by Ed Morrissey
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Dan Mitchell has another excellent video from the Center for Freedom and Prosperity explaining the folly of Barack Obama’s stimulus plan. He notes that the idea of increasing government spending is nothing new. In fact, the Bush administration expanded government spending at a rate unmatched over the last decade. If that stimulated the economy, why are we in the mess we’re in now?
If government spending stimulated national economies, as Obama proposes, then “North Korea would be Nirvana,” Mitchell exclaims. In fact, we don’t have to go to those extremes to see the end result of massive government spending and jacked-up taxation. All we need to do is study Western Europe, which has stagnated for years on those policies, and Eastern Europe, which has thrived on low tax rates and better fiscal discipline.
Nor is the stimulus particularly well-planned. The CBO’s new numbers show most of the spending will occur more than a year from now, and half of it more than two years away (via QandO):
Assuming enactment in mid-February, CBO estimates that the bill would increase outlays by $92 billion during the remaining several months of fiscal year 2009, by $225 billion in fiscal year 2010 (which begins on October 1), by $159 billion in 2011, and by a total of $604 billion over the 2009-2019 period. That spending includes outlays from discretionary appropriations in Division A of the bill and direct spending resulting from Division B.
In addition, CBO and the Joint Committee on Taxation (JCT) estimate that enacting the provisions in Division B would reduce revenues by $76 billion in fiscal year 2009, by $131 billion in fiscal year 2010, and by a net of $212 billion over the 2009-2019 period.
Ten years? This looks less and less like a short-term stimulus and more like a long-term change in the way government interacts with the economy — in the failed European model.
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Eh, I’ve been wanting to visit europe again, now I can do so just by walking out the front door.
Sadly, my knowledge of French is limited; President Ogabe will be ashamed of me.
Bishop on January 27, 2009 at 9:28 AM
The only way govt spending could stimulate the economy, would be if the govt spent the money more wisely than the men and women who had earned it in the first place.
MarkTheGreat on January 27, 2009 at 9:30 AM
Of course, after living under communism, Eastern Europe learned the folly of government control.
Johan Klaus on January 27, 2009 at 9:30 AM
The problem with assuming that govt spending will stimulate the economy, is that before the govt can spend the money, it must first get the money. And all methods by which govt gets money depress the economy.
MarkTheGreat on January 27, 2009 at 9:31 AM
“I am from the government and I am here to help you”.
Johan Klaus on January 27, 2009 at 9:31 AM
First of all, spending bills come from Congress, not the president.
Second of all, until TARP, I don’t recall Bush ever selling the spending bils he signed as economic stimulus.
BigD on January 27, 2009 at 9:32 AM
Who’s kidding who here?
Look at the track record of our government for the last 50 years. Have they spent our money wisely or wasted it on pork and a multitude of other social engineering programs destined for failure from the start?
I’ve seen this show before and it has a bad ending. Considering the outlay of a couple trillion bucks, we can expect a catastrophic ending this time around. And the banking CEOs can watch it unfold, as they laugh from 35,000 feet in their 50 million dollar private jets we paid for.
fogw on January 27, 2009 at 9:35 AM
Please, facts and history only confuses our leaders…if they understood history, they would be lowering taxes, and making gov. smaller.
And they never account for the “skimming” off the top for gov. programs.
I should have written it down, but someone showed something like a stimulus program that only cost a few hundred million…it is now a multi-billion dollar program, a staggering number for a “temporary” fix.
It is not only “turning on the spigot” but there is no trigger that “turns off the spigot”.
right2bright on January 27, 2009 at 9:36 AM
Exactly what Rush Limbaugh has been exposing for the past few weeks. I’m very pleased to see others giving attention to this development, as my boys and their children will suffer the consequences of what is taking place right now.
Good post Ed! Thanks for paying attention…
Keemo on January 27, 2009 at 9:36 AM
The Center for Freedom and Prosperity has many good vids over at YouTube.
toliver on January 27, 2009 at 9:38 AM
Yes…. Obama, citizen of the World!
I truly believe that he does not want America to be the Exception to the Rule… that Shining Beacon on the Hill…
He thinks that is we are just like everyone else, and play nice, then everyone will like us, and leave us alone…
Problem is, that a fundamental change on what America is…
And when you force everyone to be equal, no one is exceptional, and human advancment stops.
Romeo13 on January 27, 2009 at 9:41 AM
Correct, TARP was never billed as a stimulus.
Because the (R)’s had a hard time saying NO to Bush and the (D)’s enabled every dollar spent by Bush. When Bush did raise some concern about Fannie Mae & Freddie Mac – the powerful lobby’s from these GSE’s paid off Republicans to go along.
izoneguy on January 27, 2009 at 9:43 AM
This video explains why Republicans lost the last two election by a big margin. They were democrats. Thanks Bush for being a democrat on spending and costing Republicans to lose control of the house and senate.
BroncosRock on January 27, 2009 at 9:44 AM
Leftards are typically confused on this point. The think the government is the economy, and the economy is the government. Their inability to distinguish is what leads the well-meaning among them to favor bigger government, and the dyed-in-the-wool communists, who may, in fact, know better, to leverage general ignorance to their advantage.
mr.blacksheep on January 27, 2009 at 9:51 AM
And the Bush stimulus package last year? The one he proposed and got through Congress?
Romeo13 on January 27, 2009 at 9:52 AM
Good video, good post. I still can’t believe how much the DC politicians are getting away with. I have a hard time believing that a king would be worse for our economy. How the leaders are chosen is much less important than what the leaders do after they are chosen.
We need another Boston Tea Party. We need to do something to get the attention of DC. I’d recommend not paying taxes, but we all know they’d just throw us in jail.
ThackerAgency on January 27, 2009 at 9:56 AM
We the “people” are being screwed big time. These wormy politicians are like rabid jackals ripping at dead flesh. This once great Republic is nothing more than a feeding trough for crooks, liars, and charlatans. Bend over and grab your ankles everyone . . . they’re not yet finished with you.
rplat on January 27, 2009 at 9:57 AM
I grant you that, as I believe I said in my first post, although I think I lumped it in with TARP.
My point is that the premise of this post is a bit bogus. While spending indeed increased under Bush 43, the policy aims behind it — looking at the first seven years — were never (or almost never) intended or packaged as designed for “economic stimulus.” So to use Bush’s spending practice as a starting point for the discussion of whether Obama’s policy will work has no logic behind it.
I also don’t see any mention of Bush’s tax cuts, which did indeed have a stimulating effect on the economy. But there’s alot of selective attention/retention going on these days.
BigD on January 27, 2009 at 10:07 AM
Did nada to stimulate anything. We got our check and then the IRS made mistakes on our qtr filing and said we owed more money than we paid. It was their screw-up and they continue to screw-up every 6 months. And now we will have a tax-cheat telling me to pay more? What the hell…that is where this country is going. Where can I apply for one of them gobermint jobs???
izoneguy on January 27, 2009 at 10:07 AM
Hah!! – I am self-employed – I just quit paying myself. I might fire myself and collect unemployment.
izoneguy on January 27, 2009 at 10:09 AM
It really does not matter what they said the “aim” was… their point is that Governement spending does not really help the GDP.
Does not matter how they rationalize the spending… whether they call it a stimulus, or No Child Left Behind, or an Energy Bill (which produces no energy)…
You must admit that Bush could have used his veto pen… and many of the “projects” he oversaw under his “Compasionate Conservative” agenda were big government solutions.
Lots and lots of blame to go around… but Bush did NOT fight against Government growth, and in fact, reccomended some of it himself.
Romeo13 on January 27, 2009 at 10:13 AM
Fine, Romeo. I’m not defending Bush. I’m saying that the comparison presented here is faulty.
BigD on January 27, 2009 at 10:16 AM
Great points …
tarpon on January 27, 2009 at 10:17 AM
The sad part is it will likely take eight years of this crap before people get fed up.
Mr. Joe on January 27, 2009 at 10:24 AM
They can’t throw us ALL in jail. Problem is, how do you get your employer to not take taxes out of your check?
AZ_Mike on January 27, 2009 at 10:40 AM
I’ve said it. I know it’s heretical to some, but I hope it fails — I hope Obama fails. This can not possibly end well.
gryphon202 on January 27, 2009 at 10:43 AM
“This looks less and less like a short-term stimulus and more like a long-term change in the way government interacts with the economy.”
Both The Chosen One and his sidekick Rahm have said that this is an opportunity that can’t be passed up. Which explains why the rush rush rush to get it done. Don’t ask questions, just get it done, the sky is falling, people are dying, women are screaming, children are crying, etc etc etc.
GarandFan on January 27, 2009 at 10:43 AM
One day we will hear the majority of people saying, you know, Bush was not that bad.
That is when we will know we have hit rock bottom.
Mr. Joe on January 27, 2009 at 10:44 AM
Article in today’s WaPo tells the tale, unashamedly:
“Stimulus Bill Sends Thrill Through Region
Local Officials Drawing Up Wish Lists”
http://www.washingtonpost.com/wp-dyn/content/story/2009/01/27/ST2009012701053.html
dtestard on January 27, 2009 at 10:54 AM
Amen. But is anyone listening out there (except conservatives)?
PattyJ on January 27, 2009 at 10:55 AM
Not quite–the money itself is unimportant. It is the resources that are purchased with that money, and how they are used that is important. Government mandated utilization of resources sucks, hard, and strongly reduces the motivation that is vital in human resources. The specifics of what money is used is only a secondary effect, working through inflationary mechanisms, that can distort long term planning–it can be important, but is negligible next to the wast inherent in spending.
Count to 10 on January 27, 2009 at 11:04 AM
The Founding Fathers would likely pick up their musket and go absolutely nuts if they saw what we have allowed this nation to become and to have strayed so far away from what they gave us.
Yakko77 on January 27, 2009 at 11:34 AM
Yakko77 on January 27, 2009
Imagining our founding father’s reaction to what we’ve become saddens me. Imagining the yoke of socialist tyrrany we are hanging around the necks of our children infuriates me. Once we know with certainty the path we are on, do we stay on that path and “hope” it works out OK or do we stop and stand fast against it? At what cost?
SKYFOX on January 27, 2009 at 11:49 AM
Ever hear of deficit spending? If the Govt must first get the money before spending it, how is the national debt explained?
BobMbx on January 27, 2009 at 11:49 AM
Let’s not forget the mechanics of that stimulus deal. The cash used was not new or borrowed cash. It was an early refund of overpaid 2008 taxes. Whatever your tax refund is, you have to subtract that stimulus amount directly from your refund.
These new “stimulus” bills are pure debt (excepting the $250b or so in tax cuts). It comes with a payment coupon book that transfers from generation to generation.
Secondly, the Bush stimulus sent the dough directly to the people. These new bills don’t send a dime to the people. Corporations and traditionally democrat-supportive blocs will be beneficiaries. The reason the spending is spread out over several years is to the cash flowing to the democrat party campaign donors.
In other words, the bills are simply a way of government financing of Democrat campaigns. Feingold should be proud.
BobMbx on January 27, 2009 at 11:58 AM
Amen! And that is how Obama got elected!
Christian Conservative on January 27, 2009 at 12:16 PM
If deficit spending stimulates the economy, why stop at 3 trillion?
Buy Danish on January 27, 2009 at 12:16 PM
if you want a serious economic conservative analysis of our macroeconomic mess and available solutions, you should read cochrane.
maybe a little post would not hurt (sorry hot air for suggesting posts but i think this really deserves greater attention)
http://faculty.chicagogsb.edu/john.cochrane/research/Papers/fiscal2.htm
aso on January 27, 2009 at 12:29 PM
You gotta love these libertarian think tanks!
paulsur on January 27, 2009 at 1:01 PM
Logic doesnt work with politicians..
this is why most politiicans in washington are all corrupt
this is why they just confirmed a tax cheat to run the irs.
this is why democrats turned against our own soldiers..
Some day all of these democrats and corrupt poiticians
are going to be paid in full for their treason..
With interest..
jcila on January 27, 2009 at 1:10 PM
They can’t throw us ALL in jail. Problem is, how do you get your employer to not take taxes out of your check?
AZ_Mike on January 27, 2009 at 10:40 AM
Now, I’m not suggesting anything….but….
What if we all just made an innocent mistake on our returns? I mean, if we all had our employers take out the minumum required, by changing our W-4 forms accordingly, the govt would get less up front.
Then, if we all happened, when filing, to “miss” a digit, or transpose it incorrectly (say that 80,000 suddenly becomes 20,000, or that 120,000 becomes 20,000), not only would we get back most of the taxes paid in, but we’d get EITC on top of it. After all, it was just an honest mistake. Right?
Oh, sure, some of us would certainly get caught, maybe even all of us, but there is no way they could prosecute all of us, and we’d be able to pay the back taxes anyway. After all, it was all just an innocent mistake.
My experience with the IRS, under both democrats and republicans, is they just want the money. They’re not even really that concerned about the interest and penalties. You’d be amazed how many “amnesty” programs there are out there for tax cheats. But the point is, if enough people did this, in a single year, what kind of message would be sent? What if half of Americans did this? What if they did it year after year?
It’s just an honest mistake, there is no way they’d be able to keep up with it. No way in hell.
Not that I’m suggesting anything here……..
runawayyyy on January 27, 2009 at 5:27 PM
Very well said. Click on the video to be redirected to YouTube and give it a good rating.
Tzetzes on January 27, 2009 at 9:37 PM
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