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The Obama Administration is proposing (and going to get) an $825 billion “stimulus package.” The worst kept secret in town by now is the orgy of rent seeking and hypocrisy this bill represents. Hundreds of millions for contraception? Hundreds of millions for trophies? $90 billion in spending on “infrastructure” (less than 15% of the total plan, which we were sold on as being an opportunity to invest in much needed infrastructure – sounds like an Iraq War bait and switch … nice change …. All of the tax rebates being done in lump sum (so no change in the incentives to work and invest), promised to be paid for by tax rate increases on “the rich” later on, and a big f-u to all of the folks that work hard, pay their bills and try to save a few pennies.

Anyway, why are we doing the stimulus? While the focus should be on permanently expanding output, the Administration is clearly focused on the depth and duration of the unemployment problem, and the political problem they face as millions of workers in apple pie industries are out of work (and in sectors that may permanently be shrinking). Christina Romer, the chair of the Council of Economic Advisors, is using a worst case estimate (i.e. if we “do nothing”) of a total of 4.2 million net job losses through 2010.

Well, if we are worried about those 4.2 million people adjusting to the changes, and if we are worried that a small reduction in tax rates will do little to stimulate spending by consumers, and not address the structural adjustment problem that has to happen, why not then simply give a huge pile of money to each and every one of the workers that are permanently unemployed?

Really, I find that to be less reprehensible than greasing the wheels of the teachers unions, the state and local government lobbyists who can’t make a budget balance if their lives depended on it, the environmental and financial special interests, and the rest of the looters that are on the fast train to DC for their cut of the loot. And, if the $825 billion is divided equally across all of the permanently unemployed, that would amount to about $200,000 PER PERSON. Tell me that is not enough support to encourage relocation to more prosperous areas of the country? Tell me that is not enough support to encourage job retraining and college attendance (and enough to pay off existing debts and living expenses while in school) … what, are you worried about fairness? Incentives? Since when.

If stimulus is what you want, and if you really claim to “feel the pain” of the people, towns and cities that have been devastated, AND if you are on a spending jihad wedded to doing something at any cost, find me a better plan.

Amidst all of the jubilation of the recent crowning, is there anything coming after the response of “yes we can?” We can what? Alleviate fear and uncertainty? How, by proving to people we can throw lots of their hard earned dollars into useless projects (again, we are not in theory world, but in the public choice real world), or by throwing tax rebates at them today and telling them we will increase their future taxes to pay for them? By doing nothing to stimulate investment and productivity growth? Yes, we can.

Happy days!

One Response to “Who Are We Stimulating?”

  1. Michael says:

    Here’s another stimulus to our economy:
    Obama just signed the equal pay bill, so an employee can sue the employer if he/she is not making the same pay as another worker with the same job.

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