The Wall Street Journal has a good discussion of yet another stimulus – correctly identify it as Stimulus III (noting both the $787 billion stimulus from earlier this year, along with the $165 billion stimulus from 2008). This new proposed stimulus would be focused on “creating job”. No really, this time they mean it.
Relatedly, John Stossel explains why the CBO’s latest analysis of the 2009 stimulus’s effects are meaningless – they didn’t analyze any actual results, just plugged spending numbers into their same economic model (which many economists believe is highly flawed). For instance, the CBO model essentially assumes that all government spending is new spending, and would not require any change in behavior, or a reduction in spending or investment by the private sector.
Tom Coburn’s latest report on silly stimulus projects reveals why government-direct spending is not such a wise endeavor.
Ultimately, true economic recovery is only going to come from the private sector…It is only when the private sector starts to reinvest again; only when our businesses start hiring again and people start spending again and families start seeing improvement in their own lives again, that we’re going to have the kind of economy that we want.
Unfortunately, a jobs plan that first takes money out of the private sector, funnels them government agencies, and then gives them out to politically selected “private sector” projects completely undermines true economic recovery.