Escape From D.C.

February 19, 2009

Escape From D.C.

By INVESTOR’S BUSINESS DAILY | Posted Tuesday, February 17, 2009 4:20 PM PT

Federal Spending: That President Obama waited until Tuesday to sign the $787 billion stimulus bill during a trip to Denver speaks volumes. He wanted to highlight the bill’s green provisions, not its “stimulus.”

Read More: Economy

It’s strange that so few mainstream media outlets have pointed out the obvious: The bill Congress hurried to pass late last week without anyone having read the entire 1,434 pages will in fact not stimulate much of anything.

It is a spending bill, pure and simple. Every dollar the government spends must either be borrowed, taken through taxation or printed. Any way you look at it, every dollar comes from the pockets of the people it will be spent on.

The bill adds $10,000 to each American’s debt. No matter how you view it, that’s a $10,000 hike in future taxes, not counting interest. We’ve been lectured often that Americans have become greedy and overly indebted. So how does adding still more debt help? Unless there’s an explosion of economic activity directly due to this bill, Americans’ standard of living will decline — count on it.

The very word “stimulus” hides a key fact: In essence, we’ve made a collective decision to let government spend our money for us. We’ll see soon whether the 535 wise men and women of Congress do a better job than the rest of us would.

We’re inclined, after looking at the earmarks, pork and outright waste in the bill, to come down on the side of skepticism.

Early on, we supported the idea of a stimulus package, thinking it might actually lift the economy. The bill we got won’t do that. What pains us now is that this has been portrayed as an ideological debate. But, as Obama earlier said, this is an issue of pragmatism — of what works, and what doesn’t.

So what works? History shows repeatedly that big-spending programs that enlarge the size of government do little if anything to boost the economy. But permanent tax cuts do work — spectacularly, at times. Sadly, this bill lacks permanent, stimulative tax cuts.

The nonpartisan Congressional Budget Office had this to say: “In the longer run, the legislation would result in a slight decrease in gross domestic product compared with CBO’s baseline economic forecast.” Get that? The economy, under this plan, will be smaller than it would have been, while adding $1.7 trillion to our deficits.

Obama said there was “no disagreement” over the need for stimulus. In response, more than 200 economists, including several Nobel Prize winners, took out a newspaper ad saying: “With all due respect, Mr. President . . . we the undersigned do not believe that more government spending is a way to improve economic performance.”

Just as with global warming, it’s a non-consensus consensus.

We’re not saying all this because we don’t want Obama to succeed. Quite the opposite, we say it because we do want him to succeed, as we would any president. But bad policies are bad policies.

And this bill has much that can be called bad — from $300 million for electric carts, a favor to North Dakota Democratic Sen. Byron Dorgan, in whose state the carts will be made, to $8 billion for high-speed rail, a tidbit that boosts Senate Majority Leader Harry Reid’s dream of a Las Vegas-Los Angeles rail link.

That explains why Obama traveled to Denver on Tuesday for what even the Associated Press called “an unusual ceremony” to sign the legislation into law: He wanted to escape the heated discussion about the bill’s bogus stimulus provisions, and focus instead on its more-popular but no-less-bogus green energy elements.

We can’t blame him. Voters are angry and feel they’ve been taken.

In the coming weeks, we hope to look at the some of the bill’s less-stimulating provisions, how much they cost and how they got put in. Who knows? It might come in handy during the 2010 elections.

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