Economists against a “stimulus”
Even though the Obama administration claims all economists recognize the inherent brilliance of a proposed economic stimulus (which includes a bailout of the states, “infrastructure” spend, and “rebate” checks for taxpayers), I’ve come across a few economist critical of the plan – even making fun of it.
Don Boudreaux writes
Government throwing oodles of other people’s money at problems — how’s that for change we can believe in?! Uncle Sam hasn’t tried such a creative approach since the presidency of George W. Bush.
But isn’t spending tons of money exactly what government at all levels has been doing in recent years? According to U.S. Bureau of Economic Analysis numbers, combined federal, state, and local expenditures in 2000 were an already unhealthy 30% of GDP. Eight years and two recessions later, government spending now sucks up 35% of the nation’s economy and is trending higher. …
With all the money federal, state, and local governments have been spending shouldn’t we be experiencing a boom?
Jim Harper comments on the sales pitch Obama and Congressional leaders will use – touting the tax “rebates” of up to $1,000 per family, but glossing over the cost of $8,000 per family in new debt for taxpayers.
Russ Roberts poses his comments in the form of a question – namely, if a “stimulus” would be more helpful if it all went to tax “rebates” to “infastructure” spending, or just hiring people to dig a ditch, and then fill it back in again.
And Thomas Sowell takes on the oft-championed idea of spending on “infrastructure”, noting the political reality of how policy decisions are made:
Does spending on infrastructure mean that the money is going to be spent filling potholes and repairing bridges? Or will it be spent creating new things?
One of the key reasons why infrastructure gets neglected, in the first place, is that there is very little political pay-off to filling potholes and repairing bridges, compared to spending that same money creating community centers, bike paths and other things.
These new things create opportunities for ribbon-cutting ceremonies that give politicians favorable free publicity in the media. But nobody holds ribbon-cutting ceremonies for filling in potholes or repairing bridges.