So, if this is a “normal” length recession, the spending bill will have the
classic problem that fiscal stimulus does—namely, it comes too
late to do much good, but right on time to help stoke inflation and
mis-allocation of resources that are suddenly in high demand as the
economy enters a recovery. And if this is a
very long-lasting recession, more like a U.S. 1930s Depression or Japan
1990s “lost decade”, then the problem is so long-lasting
that we’re not really debating a stimulus bill, we’re
debating a near-permanent shift of control of resources to the
government, which doesn’t exactly have a sterling track record of
[The plan’s few tax cuts] are mostly a combination of
disguised redistribution, social welfare and environmental spending
disguised as tax credits, and the kind of rigged changes to investment
expensing that have made the U.S. corporate tax the shining model of
effectiveness and fairness that it is today. And for whatever it’s worth, academic economists seem to agree with the everyday observation that the 2008 tax rebates didn’t seem to head off many problems at the pass.
This post, along with this one at RedState, also provides some handy bullet points about where this firehose of money might be pointed, including:
- $27.1 billion for increase unemployment benefits
- $13.3 billion to increase health insurance for unemployed workers
- $11.1 billion for “Other Unemployment Compensation”
That’s about $50 billion (BILLION!!) in incentives for unemployed people to remain unemployed. What part of the economy is that going to stimulate? Are we expecting the spike in viewership for daytime game shows to carry us through? But wait, there’s more!:
- $600 million for new cars for the federal government.
- $50 million in funding for the National Endowment of the Arts. [What’s a stupid government pork bill without a few mil for the NEA, I say.]
- $200 million for the National Mall, including $21 million for sod.
But the most important factoid is this, which really explains what this bill is for:
- The plan establishes at least 32 new government programs at a cost of
over $136 billion. That means more than a third of this plan’s spending
provisions are dedicated to creating new government programs.
Those programs aren’t going to cost $136 billion; they’re going to START at $136 billion (BILLION!!) and just get bigger after that, because government programs never get smaller, and they never go away.
This bill establishes a new baseline for how big government is, and a jumping off point for how big it will become. Just like that other New Deal, it’s a great loss for any fan of limited government, and it will be with us just as long. Which is to say, forever.