Will Democrats Get Away With the Stimulus Bill?
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by Rachel Alexander | February 13th, 2009

 Over the next few years, Republicans must collect a list of all the people and worthy causes that will suffer because of this bill. If the Democrats dishonestly take credit when the economy inevitably rebounds, it will mean four more years of Obama and a Democrat-controlled Congress.

Facing a wave of public protest, Democrats in the Senate reluctantly took out a small part of the pork and payoffs in the so-called economic "stimulus bill," mockingly referred to as the "spendulus bill." It is a spending bill, not a stimulus bill. Every single Republican in the House voted against the original House version. Democrats in the Senate needed at least two liberal Republicans to support the bill in the Senate in order to shut down debate, and they got three by making some small cuts. Even so, working it out further with the House, the $789 billion they agreed upon spending is not much less than the House's original bloated $819 billion bill.

The Democrats control both Houses and currently have a powerful mandate due to the election of Democrat President Obama. They will be able to push through considerable legislation early on in his term regardless of what name it is given. Due to the current recession and accompanying high unemployment, a stimulus bill presented the perfect opportunity. Democrats know it is virtually impossible for Republicans to explain to the average American the complexities of a macroeconomic stimulus and why it won't work. They will claim in a few years when the economy naturally rebounds that it was due to their stimulus bill.

Congressional Democrats are banking on the fact that the American people have a short-term memory and do not understand economic swings. The economy rises and falls in cycles; in modern years controlled by the Federal Reserve's tinkering with interest rates. The Democrats know that it will be difficult to explain to the public that the stimulus bill failed to help the economy, because unless something drastic happens like the nationalization of all our major industries, the economy will rebound on its own.

This recession occurred due to a combination of several things happening. The Federal Reserve let interest rates dip very low for a long period of time. Banks made loans they knew were risky, and buyers bought property and investments they knew they could not afford should anything go wrong. Both lending institutions and buyers were at fault. If the Federal Reserve had not manipulated interest rates, the market would have sorted it out on its own and the economy would not have been susceptible to deep swings like this recession.

As long as the Federal Reserve determines when to print more money, injecting more money into the economy and permitting more risky loans, the government will be blamed when the number of risky loans increase, and a clamor will arise for government to fix the situation. Unless Republicans decide to eliminate the Federal Reserve, they are fighting a losing battle trying to defend the complexities of its economic manipulations to the public. Republicans are unlikely to eliminate the Federal Reserve, because many of them believe without its subtle manipulations, society is susceptible to another Great Depression.

There is solid research showing that economic stimuli do not work. Harvard economist Robert Barro found that the biggest government stimulus plan ever, the World War II stimulus package, siphoned off resources from other economic uses, reducing the overall economic benefit rather than increasing it. A Heritage Foundation study found that the Hoover administration increased federal spending by 47% during the first three years of the Great Depression to no avail; unemployment was still at 14.6% 10 years into the Depression. Heritage Foundation reports that spending on infrastructure generally has little effect, in part due to state and local governments' simply moving federal money over to projects they were already going to fund. Only 3.6% of the bill is even directed at infrastructure spending.

House Speaker Nancy Pelosi warned that cutting out parts of the House bill would be "very damaging." But directing money to controversial left wing causes like a transgender beauty pageant in Pelosi's state of California and a sexual education class teaching participants how to flirt is not meant to create jobs. STD prevention organizations will benefit from that money, and perhaps a couple new jobs will be created, but essentially the money is wasteful spending on causes that further the left's agenda and oppose conservative principles. Taking advantage of the public's lack of knowledge regarding economic downturns, Democrats packed the initial House stimulus bill full of pork and special interest payoffs that have nothing to do with improving the economy. The original House bill included $246 million for Hollywood, $50 million for the National Endowment for the Arts, and $75 million for smoking cessation. Spending on federal education would double, $10 million was directed to bike and walking trails, and $4.7 billion for environmentalist projects.

The current version of the bill still contains $30 million in pork to protect the habitat of field mice in Pelosi's San Francisco Bay area district, and a wide-open $4.19 billion for ACORN. Another $2.7 billion is slotted for NIH grants, including research on embryonic stem cells. $1 billion in funding is for a new "Wellness and Prevention" program." $53.6 billion is going to governors and mayors to spend on discretionary items they have requested such as landscaping, stadiums, corporate hangars, and golf courses.

Awarding money to causes like a transgender beauty contest doesn't serve the average American, it serves the radical extremists on the left. Our children will be saddled with debt that will raise their taxes to unheard of levels, because of government spending in nonessential areas when our country is already buried in $10 trillion dollars of debt. The deficit continues to increase each year, reaching $455 billion last year. When interest is included, the stimulus bill will cost almost one trillion dollars.

The biggest problem caused by the current recession is unemployment. If the bill was really meant to stimulate the economy, it would be directed at job creation – preferably capital gains cuts and other tax cuts to stimulate business so jobs will be created. The bill will create 600,000 new jobs, but they are all government jobs, which will require ongoing government money to fund them. The revisions made to the bill in the Senate do little to fix this. The current version includes many of the wrong kinds of tax cuts. Almost $8 million in tax credits is slated for first-time home buyers. This encourages the very type of activity that got us into this recession in the first place, enabling consumers to buy homes beyond their means.

This bill is a disaster and the Democrats should not be allowed to get away with it. In order to prevent the Democrats from taking credit when the economy inevitably rebounds, Republicans should start now using one of the Democrats' most successful tactics against them – emotionally impacting arguments. Republicans should highlight the Americans who will suffer because of the wasteful spending. Spotlight the laid-off dad who can't find a job, because of the bill's payoffs to the unions which only protect their own. Emphasize the things Americans will no longer be able to afford in place of the Democrats' agenda: contributions to church and charities that serve the elderly and underprivileged, signing the kids up for soccer, and family trips to Disneyland. Over the next few years, Republicans must collect a list of all the people and worthy causes that will suffer because of this bill. If the Democrats dishonestly take credit when the economy inevitably rebounds, it will mean four more years of Obama and a Democrat-controlled Congress.

Labels: Business and Finance, Congress & the Legislatures, Econ. & Public Policy, Science, Technology, Energy, The Left Wing

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Responses to "Will Democrats Get Away With the Stimulus Bill?"

  1. One way to deflect this possibility: Government intervention is now going to be so pervasive that it will be possible to identify two classes of companies within American capitalism: "private" and "socialized." We should closely track the difference in performance between these two classes over the coming years.

    One answer to have ready at hand when the Democrats claim to have ended the recession is a forecast of the (greater) growth that would have occurred during the same period, had the entire economy "remained" private. This might not, in say 2011, win us the battle over 2009-2010; but it might convince the public that ours is the better economic ideology for 2012-2016.

    Comment by Todd | February 13, 2009

  2. We have to drop the notion that government deficits can be "paid by our children." Every dollar that government spends will be immediately paid by us. The only question is whether we pay directly in higher taxes or indirectly through loss of jobs or devalued money.

    This was pointed out by Frederic Bastiat, a French politician of the early 19th century, when he described what happens when a vandal breaks a shopkeeper’s window. The seen effect is that repairing the glass creates economic value in the payment to the glazier, who then has money to buy a new suit or hire a part-time employee. What is unseen is that the shopkeeper has to pay the glazier with money that he would otherwise have used to buy a suit or add an employee.

    The futility of the “stimulus” package lies in the nature of the transaction. A transaction in the private sector will not take place unless both parties benefit, thus increasing the total wealth. The coercive nature of taxation, on the other hand, reduces wealth. The magnitude of this effect has been estimated to be $1 of private spending to be the equivalent of $7 in government spending.

    Comment by jonkon | February 14, 2009

  3. I see Hugo Chavez is going to try for a run in 2012, beyond Venezualan term limits. Here in Las Vegas, Mayor Oscar Goodman is attempting the same thing.

    I mention this because it isn't just 2010 and 2012 that are at stake. If Obama gets a certain degree of momentum, you can be sure the Democrats will conspire to keep him around beyond 2016.

    Comment by Todd | February 15, 2009

  4. In answer to the article’s title question – Yes, they will. They will because even if forced to back down in some degree, they will manage to get an emergency measured passed that Republican Congressmen and Senators will agree to; one that is still the largest legislation of its type ever passed, does not do what it proposes (jump start the economy), results in massive welfare increases, guarantees a long Democrat stay in power through selective use of the dole (both personal and corporate) with which to control critical election wards, and control the future terms of debate.

    Mainly this will happen because ordinary conservatives and libertarians are not radicals. Radicals would instantly take to the streets in protest. We conservatives, on the other hand, are … well … ‘conservative’. We are the ones who generally avoid and belittle that kind of behavior; and the power-drunk liberals know it. Oh sure, we’ll cuss and spit and bewail the monumental stupidity, but as long as we still have jobs and a roof over our heads we won’t show up on the Capital steps carrying placards, guns, hemp, and/or hurling rocks through windows. Most of the really bad stuff will happen to those who look to government to bail them out, though a few of those will make out. So, we in the middle will tighten our belts, find or create opportunities in chaos, and weather the artificial storm same as we weather real storms. Most of us belong to the older crowd for whom the days of juvenile tantrums are long in the past. So we’ll agree among ourselves what this country needs is a good enema (revolution, purge, shakeup, petition, recall, whatever) to put it right. Then, we will sit back and wait for the next election cycle convinced the Democrats will make such a mess of things people will be desperate for a change of idiots-in-charge; especially with us reminding them every other day.

    They will also get away with it because the whole thing has an eerie self-reinforcing quality to it. A recession gets started and the Chicken Little Democrats whip up voter fear of catastrophe only they can contain (not fix, mind you – just contain; fixing it is going to take at least a decade of careful tinkering only Democrats are qualified to perform). In a panic, the voters vote into power whoever promises most convincingly they can stop the unstoppable; then keep them there because of the false assurance nanny-states provide in hard times even as the boat continues to sink. For a time, they will even appear to be succeeding from the endless money streaming out of Washington. Unnoticed will be this money purchases less and less the more it is pumped. Thus, government spending will pile ever higher until inflation and debt wipes out benefits and the whole thing crashes. But, even that will not be the end. Sometime in year three, Lord Obama will have an election to win and narrative to spin. Come round-two, the problem will not be a failed policy, but a failure to have sufficiently taken over the reins of production. Regulations, councils, cartels, monopolies, and new bureaucracies will sprout like weeds across the land mercilessly dedicated to making enterprise efficient (run by a pack of failed intellectuals who never ran anything but mouths). When this fails to work and shortages abound, rationing will be imposed to frustrate gouging (every price-increase is just gouging, right?) and black-marketeering. This, in turn, dictates government set prices and fix demand; creating further disincentives to produce and a vicious cycle of fixing / gouging / rationing / black-markets. But, that’s okay because the narrative will be intact, the people will still need saving, and the messiah, glorious messiah, will have a new plan (suspiciously like the old plan but with new labels attached) with which to sell us on giving him yet another chance. And just to cinch the deal, well-timed, freshly printed government money will flow to the right pockets. Then, sometime in year 8 or 12, the voters finally realize there’s no magic rabbit in that Democrat hat, that they are being bought and sold with our own money, deals are struck letting liberals off the hook and out the door, and people are put in charge who actually studied Econ-101 rather than Eco-Econ-000 and FDR-con, who know how to whittle government down to size, cut taxes, re-deregulate, and have the guts and patience it takes to let the economy work its own magic. Finally, around year 10-14 (depending on the learning curve) things get back on track with GDP rising to where we start paying down debt, put a bit in savings, and breath a collective sigh … while preserving the myth and forgetting the lesson.

    They will get away with it because people don’t bother to learn their history or from it, and our government prefers we don’t.

    Comment by Bob Stapler | February 17, 2009

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