We all know how we got into this economic mess. We spent too much, borrowed with abandon, and acted like the bills would never come due. So what's the prescription for getting out? Spending more, borrowing more, and acting like the bills will never come due.CNNMoney.com:
When asked at a press briefing about the interest cost affecting the overall cost of stimulus package, White House press secretary Robert Gibbs on Tuesday said, "The real price tag is how much the plan costs now, $825 billion." He likened it to being asked how much a house costs. Typically the price given is the sales price, not the 30-year cost with interest, he said.Jacob Sullum:
Even as President Obama promises that the federal government will spend the $1 trillion or so contemplated in the stimulus legislation in a utterly open, totally transparent, and absolutely accountable way, he demands that members of Congress vote for the 647-page monstrosity before they can possibly have time to read and digest it. "We don't have a moment to spare," he says, eliciting praise from Honeywell CEO David Cote, who raves, "Thank God you are not a timid man."Glenn Reynolds:
“Not a moment to spare.” Because given enough time, people might wise up . . . .?Hale Stewart:
The country is in the middle of one of the worst recessions in over 70 years. Consumer spending is falling off a cliff, industrial production is collapsing, capacity utilization is down, housing is in the tank, unemployment is rising, more and more companies are announcing big lay-offs, investment spending is falling .... you get the idea. The government is the only player who can do anything right now because every other economic player is out of the game. Yet -- according to Republican economic philosophy -- this is the time to become fiscal conservatives.
$20 million “for the removal of small- to medium-sized fish passage barriers.”Speaker of the House Nancy Pelosi:
Yes, we wrote the bill. Yes, we won the election.Republican.Senate.Gov:
$25 million to rehabilitate off-roading (ATV) trails.Bob Cesca:
Republicans on the Hill, on the radio and on cable news seemed to have forgotten how ridiculous George W. Bush looked when he performed his pee-pants-dance in public; acting like a petulant, entitled twerp who could, at any moment, very nearly regress into an actual terrible-twos tantrum, only to pull himself back at the last second and find some restraint just before reflexively dropping to the ground in a raging tempest of elbows, fists and teeth. The Republicans seemed to have forgotten about the inefficacy of this routine because it's precisely the behavior they're exhibiting this week. They're acting like Bush Republicans.Republican.Senate.Gov:
$70 million to “Support Supercomputing Activities” for climate research.Bob Cesca:
Their political audacity, while never surprising, always seems to confound expectations and defy logic. Having relegated themselves to the status of a regional, minor party due to their unserious, fear-mongering wedge politics and well-documented record of disastrous policy-making, they remain so hubristic as to crap their cages and demand a seat at the Big Boy Table, as if they're the majority party in Congress -- as if they somehow earned an equal voice in this thing by way of their awesome record on the economy.Republican.Senate.Gov:
$150 million for honey bee insurance.Megan McArdle:
Though you wouldn't think it from the really quite shocking incivility emanating from the pro-stimulus side, the empirical evidence that this works in a large industrial economy like ours is basically nonexistent. The problem is, we have very, very few examples to test on: America during the Great Depression, and Japan in the 1990s. And neither America nor Japan managed to stimulate their way out of their troubles. You can argue--and many do--that this is because we, and they, didn't stimulate enough. That may be true. But unless you can forward test your theory, it's a just so story . . . as we just painfully found out about the "It was all the Fed's fault" narrative of the 1930s banking collapse. There is no excuse for calling people who question your highly theoretical model fools and charlatans.
What we've got, since Japan really never did emerge from its lost decade, is basically one fact: America entered World War II in a depression, and emerged from World War II without one.
Resorting to overturned Keynesian nostrums in the middle of a recession is as backwards as physicians today treating a deadly infection by bloodletting. Think about it: if more government spending truly stimulated the economy, then why is the economy in such a shambles after eight years of the Bush administration and Congress growing federal spending from $1.86 trillion in 2001 to $2.98 trillion in 2008?The Wall Street Journal:
Another "stimulus" secret is that some $252 billion is for income-transfer payments -- that is, not investments that arguably help everyone, but cash or benefits to individuals for doing nothing at all. There's $81 billion for Medicaid, $36 billion for expanded unemployment benefits, $20 billion for food stamps, and $83 billion for the earned income credit for people who don't pay income tax. While some of that may be justified to help poorer Americans ride out the recession, they aren't job creators.Lawrence B. Lindsey:
For a similar amount of money, the government could essentially cut the payroll tax in half, taking three points off the rate for both the employer and the employee. This would put $1,500 into the pocket of a typical worker making $50,000, with a similar amount going to his or her employer. It would provide a powerful stimulus to the spending stream, as well as a significant, six percentage point reduction in the tax burden of employment for people making less than $100,000. The effects would be immediate.The Note:
Controversy over the contraception provision was sparked over the weekend when George Stephanopoulos asked House Speaker Nancy Pelosi about it on ABC's "This Week."ABC News:
"Hundreds of millions of dollars to expand family planning services. How is that stimulus?" asked Stephanopoulos.
"Well, the family planning services reduce cost," said Pelosi. "They reduce cost. The states are in terrible fiscal budget crises now and part of what we do for children's health, education and some of those elements are to help the states meet their financial needs. One of those -- one of the initiatives you mentioned, the contraception, will reduce costs to the states and to the federal government."
"So no apologies for that?" asked Stephanopoulos.
"No apologies," said Pelosi.
The contraceptive provision was dropped after President Barack Obama placed a call to Rep. Henry Waxman, D-Calif., on Monday. Waxman is the chairman of the committee that inserted the contraception provision into the stimulus package last week.Art Brodsky:
Kicking out family planning angered a lot of women, a key constituency for the Democratic party. Putting in more non-productive tax cuts angered a lot of progressives.Brutally Honest:
The stimulus package passed by a vote of 244-188. Eleven Democrats voted against the measure, while no Republicans supported it.Speaker of the House Nancy Pelosi:
"Well, we are definitely stepping up to the plate to say we'll be accountable," she said in an interview broadcast Thursday. "Republicans have had their chance. They decided to oppose — that's their choice."MarketWatch:
The House decisively rejected a Republican-sponsored alternative to the Democrats' $825 billion economic stimulus bill. On a largely party-line vote, the House voted against a plan that emphasized tax cuts over than government spending to stimulate economic growth.The Hill:
Despite what some described as “significant” Democratic trepidation, a number of Democrats said that many in the caucus were very hesitant to deliver any kind of blow to their president during his second week in office.Bob Krumm:
For the 11 Democrats, though – mainly a mix of fiscally conservative Blue Dog Democrats and newly elected Freshmen – it was just as important to send a message to their leaders that they have more work to do.
Even more depressing is learning who will pay what to afford the “stimulus” bill. It averages to only $6,700 per household. But wait, not all households pay taxes. Broken down by income levels the result is pretty depressing. The good news, however, is that we will probably never have to pay the nearly trillion dollar bill back. Not directly. Instead it will be taken from all of us–even the non taxpayers–in the form of inflation.Ben Stein:
For the amount spent we could have given every unemployed person in the United States roughly $75,000.Rush Limbaugh:
There's a serious debate in this country as to how best to end the recession. The average recession will last five to 11 months; the average recovery will last six years. Recessions will end on their own if they're left alone. What can make the recession worse is the wrong kind of government intervention.President Barack Obama:
You can't just listen to Rush Limbaugh and get things done.Stephen Dinan:
The two sides of Capitol Hill appear to be engaging in a bidding war to see who can put more money toward the prevention of sexually transmitted diseases in its version of the economic stimulus bill.Allahpundit:
The House included $335 million in its package. But the Senate, not to be outdone, provided $400 million in STD spending in its bill.
[A]nother magical stimulus moment for Madam Speaker. It couldn’t be clearer: If we reduce the number of STDs, we reduce our aggregate health care expenses, which in turn stimulates the economy by … ensuring there aren’t so many people laid up at home with gonorrhea that they can’t go to the mall to shop, I guess.Mary Katherine Ham:
Republican Strategy: Just have Nancy Pelosi continue to explain the stimulus.Robert Elisberg:
It's all those crafty Republican economic plans that got us in this national economic disaster in the first place.Rep. Maxine Waters (D.-CA):
Mr. Chairman, we do not have a crisis at Freddie Mac, and in particular at Fannie Mae, under the outstanding leadership of Mr. Frank Raines. Everything in the 1992 act has worked just fine.Rep. Barney Frank (D.-MA), George Gould, and Franklin Raines:
Rep. Frank: Let me ask [George] Gould and [Franklin] Raines on behalf of Freddie Mac and Fannie Mae, do you feel that over the past years you have been substantially under-regulated? Mr. Raines?ABC News:
Mr. Raines: No, sir.
Mr. Frank: Mr. Gould?
Mr. Gould: No, sir. . . .
Mr. Frank: OK. Then I am not entirely sure why we are here. . . . I believe there has been more alarm raised about potential unsafety and unsoundness than, in fact, exists.
The federal takeover of mortgage giants Fannie Mae and Freddie Mac will likely lower the cost of a mortgage for buyers with good credit, but it will also likely stick U.S. taxpayers with a bill in the tens of billions of dollars, analysts have concluded.Hugh Hewitt:
The mountain of losses by the two huge quasi-governmental agencies threatened the entire mortgage and credit industry since Fannie and Freddie, as they are popularly known on Wall Street, back up nearly half of the country's mortgages.
Both companies were placed on Sunday into a government conservatorship that will be run by the Federal Housing Finance Agency, the new agency created by Congress this summer to regulate Fannie and Freddie.
Americans wanted a stimulus bill that would produce rapid expansion in jobs and economic activity. They are instead being offered a federal fire hose of payoffs and pork, the only utility of which is to underscore that a long eight years out of the White House didn’t change basic Democratic impulses. This is a teaching moment with few equals, and the GOP needs to pound it home again and again: Giving the Democrats all of the power meant giving them all of the money, and they intend to spend it.White House Press Secretary Robert Gibbs:
I think the spending in this bill will create jobs. It will put people back to work. It will get this economy moving again. Some people might not want to do that.Ben Stein:
The new kind of politics of hope. Eight hours of debate in the HR to pass a bill spending $820 billion, or roughly $102 billion per hour of debate.