[StBernard] MyHeritage.org: What's hidden in the 'stimulus'?

[Westley Annis]

February 10, 2009 | By Nathaniel Ward


What's hidden in the 'stimulus'?


On a largely party-line vote, the Senate passed the massive $838 billion
"stimulus" bill
<http://members.myheritage.org/site/R?i=yrXgYRqlH3bLnlm7rrVzsA..>  this
afternoon. This Trillion Dollar Debt Plan now heads for a House-Senate
conference to reconcile the different versions before a final draft is voted
on and sent to the White House. Liberals intend to load up the bill with
still more spending during this process.

Hidden in this legislation are a number of troubling measures:

*	Ending Welfare Reform. The bill would use budgetary gimmicks to
effectively end the successful 1996 welfare reforms. Taxpayers will face the
largest one-year increase in welfare spending ever and be on the hook for
$787 billion in new welfare costs
<http://members.myheritage.org/site/R?i=Sj-6h1xBJ2TaEOO8rG0mWw..>  over ten
years if the bill becomes law, Heritage's Robert Rector reports.

*	Advancing Government Control of Health Care. Nina Owcharenko
explains that health care provisions in the "stimulus" bill would advance
the cause of big-government health care
<http://members.myheritage.org/site/R?i=wkGvYIAKhs5mW6xFvUaPgQ..> . "These
provisions would fuel fiscal irresponsibility in state Medicaid programs,
expand dependence on the already-unsound Medicaid entitlement program,
distort health care choices for unemployed workers, and set up a federal
infrastructure that could be used as a tool for government rationing of
medical treatments, procedures, and services."

*	Giving Jobs to Illegal Immigrants. Up to 300,000 illegal immigrants
could get construction jobs
<http://members.myheritage.org/site/R?i=7P8TmQ6ngqUwC_oUdncvHg..>  funded by
taxpayers through the "stimulus" legislation, Rector reports in another
analysis. Absent reforms to the language of the bill, "the inevitable result
would be billions in federal funds spent to employ illegal immigrants."

The bill's passage was assured when three Republican Senators agreed to
support a compromise version of the bill (which was basically the same as
the original version
<http://members.myheritage.org/site/R?i=Gbx_U_-LOn9PkBGGxl7yBw..> ). But
they might not support the legislation if liberals carry out their plans to
add more spending, Heritage's Rory Cooper reports
<http://members.myheritage.org/site/R?i=Li0Ux2BZPNUSZZzjxYMLlg..> : "Senator
Arlen Specter (R-PA), one of the Senators responsible for the compromise, is
on record as saying he would only support the final bill if it came back
with no changes, or 'virtually intact.'"

Including both the House and the Senate, 216 out of 219 Congressional
Republicans voted against the plan.


Why the 'stimulus' won't work


In televised remarks last night
<http://members.myheritage.org/site/R?i=0ZJnTwtBVlRbzkHZdvfjng..> ,
President Barack Obama urged Congress to move quickly on finalizing the
legislation, saying that failure to act would mean still further economic
decline.

This just isn't true. In fact, Heritage economist J.D. Foster told a
conference on economic recovery
<http://members.myheritage.org/site/R?i=LUcbZQINvRJy2Gg8qO9lLg..>  today
that the Trillion Dollar Debt Plan will only deepen the recession. The
non-partisan Congressional Budget Office agrees, arguing that it will
depress economic activity
<http://members.myheritage.org/site/R?i=-YZ9UNAvjdQeXXtsDBMtfA..> .

Worse, Foster argued that the massive spending could drive up interest rates
to crippling levels, while the tax increases scheduled for next year will
not advance the recovery one bit.

On Heritage's Foundry blog, Conn Carroll looks at other "stimulus" myths
repeated during the press conference
<http://members.myheritage.org/site/R?i=sxSg231bwE92aVg13RciCA..> .


There's no 'stimulus' consensus


In his remarks yesterday, the President said that most economists from
across the political spectrum support this sort of massive government
spending to "stimulate" the economy. 

Writing on National Review Online, Heritage budget expert Brian Riedl
debunks the myth
<http://members.myheritage.org/site/R?i=MuHUfy1dpxL6gyvcRF-ygQ..>  of
"bipartisan consensus" on this legislation.

Nobel Laureates Ed Prescott, James Buchanan, and Vernon Smith recently
joined 200 other economists signing a letter
<http://members.myheritage.org/site/R?i=8YTzrzpaE4FB42eg4ePhdg..>  opposing
the legislation. Other notable economists critical of the stimulus package
include Nobel Laureate Gary Becker
<http://members.myheritage.org/site/R?i=evqf-1tae2nrpKfzblWKRQ..> , as well
as Robert Barro
<http://members.myheritage.org/site/R?i=ZUTeeTbyrSyp5HkdnhblFQ..> , Greg
Mankiw <http://members.myheritage.org/site/R?i=3tmBxt2QsWP_ogcYWmXO9w..> ,
Arthur Laffer
<http://members.myheritage.org/site/R?i=5ol4AzyakMexZF45b21c3Q..> , and
Larry Lindsey
<http://members.myheritage.org/site/R?i=Y1aRUquNFxVgSEpWfuB70A..> .  Martin
Feldstein, who had been the only notable conservative economist loudly
supporting the stimulus, has since changed his mind
<http://members.myheritage.org/site/R?i=ZuBECkXBED9flMUt1Cn6PA..> .

More liberal economists such as Alice Rivlin
<http://members.myheritage.org/site/R?i=UNpvnoojz6AzblRZeOk00g..>  and Alan
Blinder <http://members.myheritage.org/site/R?i=iMV5iUwa3w9am4GG3npNUQ..>
have also strongly criticized certain aspects of the spending bill. 

Even President Obama's own economic advisers-who are leading the fight for
the "stimulus" bill-previously criticized the bill's economic underpinnings.

"If deficit spending were truly stimulative," Riedl writes in a separate
article <http://members.myheritage.org/site/R?i=AYmbZutbVkLtg1CPo_aoMg..> ,
"then the current $1.2 trillion budget deficit would already be overheating
the economy. It clearly is not. Thus, Senators should reject a "stimulus"
bill that is based on 1933 economics and ignores 75 years of research and
evidence about how growth is created."