The stimulus is madness

While advocates of Keynesian-style stimulus are correct that this economy is terrible enough to warrant dramatic action, it is hard to understand how such a fiscal path might help. So what if second-quarter gross domestic product blips up a little bit? What business is going to expand its operations with the mother of all tax hikes peeking over the horizon? If government spending provided such a wonderful boost to the economy, we would be in Nirvana already.

If we want to create optimism about our future, we need to provide a reason. Putting a ring road around every city in the U.S. will not accomplish that. The only sensible path is for the U.S. to put its long-term fiscal house in order. Without that, this year’s stimulus will likely be a historic flop.