Coming soon, more stimulus spending from Congress
MORE SPENDING=ECONOMIC STIMULUS=JOBS CREATION
I sometimes wonder if the equation above actually does what the big spenders want us to believe. Since sometime in 2008, we
have seen an unprecedented amount of money spent on stimulating our economy. It started under George W. Bush and it has only gotten bigger and more expensive since Barack Obama moved into the White House. While most of the nation’s attention was focused on the battle in the Senate over health care reform, the House of Representatives slipped another massive spending bill in under the radar, in it’s final vote of the year. Passing in a narrow vote of 217-212, the legislation is massive to the tune of $174 billion.
Jobs for Main Street Act
The Democrats are trying to brand this legislation as the bailout for Main Street, as compared to the bailout for Wall Street in 2008 and just for the record, I found the earlier bailout to be just as despicable. As with the earlier pieces of legislation, the Democrats are holding out high hopes for the Jobs for Main Street Act. From The Tulsa World, here is what they expect this bill to do.
Democrats tick off the job prospects from the House bill’s $75 billion in infrastructure and public sector spending: tens of thousands of new construction jobs, 5,500 more police officers, 25,000 additional AmeriCorps members, 250,000 summer jobs for disadvantaged youth, 14,000 part-time jobs for parks and forestry workers.
Does any of that sound familiar? It should, as they are some of the same items that were in the $700 billion economic stimulus package passed by Congress in 2009. The question of if that stimulus did what it was supposed to do is still up in the air and I see no reason to believe this will be any different. As a side note, I really have a problem with funding AmeriCorp in a economic stimulus package. I fail to see how that could be considered to be creating jobs.
As we move into the new year, I was hoping to see some resemblance of sanity from Congress. Sooner or later, do we not have to stop spending money we do not have? The Democrats have diverted $75 billion of unused Wall Street bailout money to cover part of the cost of this new stimulus and as good as that may sound, this move is deceiving. Any unused bailout money was supposed to go to reducing the deficit, but that seems less likely every day. To be fair, the Senate will likely be much less inclined to pass another stimulus or jobs creation package, so there is some hope the Jobs for Main Street Act will be changed or watered down before it clears Congress.
Instead of sanity, all I can see is more and more spending and less and less revenue. The current Congress acts as if there is no end to the amount of money they can spend. Something has to change and although I agree with Mike that we do need to increase revenues, the spending spree we are currently in simply has to stop. If it does not, we are going to spend ourselves right out of existence.
How would you propose to increase more revenues? By taking more from the private sector to increase revenue that leaves less for the private sector to grow on. But by allowing money to stay in the private sector this provides the necessary capital for expansion which increases the tax base and provides revenue to either pay down the debt or lead to more government spending. If todays politicans get more money they will not pay down the debt, but rather spend more—-just the way things are. We need more serious thinkers and fewer crazy spenders. Its quite simple but many will try and complicate the most obvious things. Use common sense and not mumbo jumbo double talk.
I am not advocating increasing revenue without stopping the spending first. I just do not see a way out of this mess we are in without doing both. I agree that it is a good thing to leave more money in the private sector, but the issue of our budget deficit still has to be addressed.
Funny that I should write nearly 700 words about how we needed to stop the spending and you pick up on the one sentence about increasing revenue. I do not think it is “mumbo jumbo double talk” to state what seems fairly obvious. With the hole our government has dug for itself, it’s going to take more than just cutting spending to make up the shortfall.
LD, it’s simple. Cut taxes, and revenue will grow. It’s happened every time it’s been tried. Combine that with drastic spending cuts, and we’ll start digging.
I suppose I find myself to be the odd duck out on this one. Make no mistake, I do not like the idea of giving the folks in Washington one red cent more than they already have. I too am afraid that they will just continue to spend and make no effort to cut back. However, I just fail to see how we can dig ourselves out of the deficit hole by cutting spending alone. Will cutting taxes grow revenue enough to bring us out of the deficit? I would like to think so, but I am not so sure.
The best way to increase revenue is to create jobs, real jobs. This in itself will create more tax revenue without raising everyones taxes. Raising taxes on the top tier wage earners isn’t the way to do it either. You do that and it just leaves them less to create jobs with. Ronald Reagan understood this but I swear, he is the only President we have had in the last 50 years that really got it.
Good post, Larry.
My biggest problem with stimulus = jobs programs is that it appears to create mainly temporary and seasonal jobs. Great for a quick “kick”, but I question the long term effectiveness and jobs recovery. Like you, I also question where the investments are placed. 300,000 + jobs seems like something to crow about, but how many of those jobs not only sustain a family wage but also lead to INDUSTRY stimulation? And the construction jobs? My region received a good chunk of this sort of stimulus money, but the jobs were gone with the projects. This isn’t industry stimulation, only a temporary subsidy that still results in unemployment when the projects are finished.
I would be more interested in stimulus investment that encouraged growth in growth industries, that leads to real jobs and lasting opportunities. The past investments (how fun not to have to get partisan on this one-both parties are guilty) appear to be mostly government investing in existing government infrastructure.
Am I completely off base?
No, I do not think you are off base, Laurie. Our country and it’s economy has been bleeding jobs for so long, it may be hard to stem the tide. The jobs that are being created are not “productive” jobs. Hence the side note about AmeriCorps in the article. I have no problem with people volunteering and doing community service, but we have too many people making a career out of that, instead of getting a job that will help and stimulate the economy. That used to be a specialty of America, but I think we are out of practice.
Here is what I cannot understand. The Democrats say that we cannot judge the stimulus package yet because most of the money has not been spent, yet they are preparing another stimulus bill before the first one is spent. If we cannot judge the first one until the money is spent, shouldn’t we hold off on another stimulus bill until the money is spent? If we spend the original stimulus money and the original stimulus works, there will be no need for a second one, and if we spend the rest of the original stimulus money and it fails wouldn’t that be a reason to not introduce a second stimulus that will also fail? They are trying to have it both ways.
And yes, President Bush deserves much of the blame for this, he started the bailout mindset and we all knew that Barack Obama would expand it.
Mr Pink Eyes´s last blog ..Democrats blame Rasmussen for their falling poll numbers instead of taking the blame themselves
Cut spending and you will have enough money on tap for businesses to create jobs. Government jobs are not the solution nor is throwing taxpayer money at projects efficient.
Businesses need to be confident that they can expand and create new jobs, otherwise they’ll continue their wait and see approach. With health care still an undecided factor and the “great unknown” for Americans, expect business confidence to remain depressed for the year ahead, perhaps well beyond.
Matt Keegan´s last blog ..PageRank and Other January Musings
Lots of good points made here. I think the criticism of job stimulus for ‘temporary’ construction jobs is fair though part of the point behind some of those jobs was equally to do with the demands for infrastructure management (repairs as well as new roads, etc) as it was for the jobs. It was also meant to be multiplicative meaning the jobs would lead to local spending and stimulate local economic growth so every dollar spent on the temp jobs would lead to multiples of consumer spending. That’s the kind of thing needed to improve consumer confidence and the important business confidence Matt pointed out.
I do not agree with Matt’s point about cutting taxes = increased revenue and economic growth and I certainly don’t think the Bush tax cuts bear out that theory. I DO agree it all begins with finding the political will to cut spending. But as I said before I just don’t see how we can get from here to a balanced budget trough spending cuts and economic growth — ain’t happening. A tax increase on the wealthy with all the residual dollars going toward one thing, deficit reduction, is going to have to happen and whether that is now (bad idea in current economic climate) or later (uh, yes) it’s got to happen.