“This bill is not a stimulus, ladies and gentlemen; it is a mugging. It is a fraud.”
Those were the words of South Carolina Senator Jim DeMint as he described a bill he thought was “the worst piece of economic legislation Congress has considered in a hundred years.”
“Not since the passage in 1909 of the 16th Amendment – which cleared the way for a federal income tax – has the United States seriously entertained a policy so comprehensively hostile to economic freedom, nor so arrogantly indifferent to economic reality,” DeMint.
Unfortunately, for the rest of us, that’s also a sentiment partly shared by the Congressional Budget Office (CBO).
As it turns out, the bipartisan group has its own reservations about the giant-sized spending package.
From the Washington Times by Stephen Dinan entitled: CBO: Obama stimulus harmful over long haul
“President Obama’s economic recovery package will actually hurt the economy more in the long run than if he were to do nothing, the nonpartisan Congressional Budget Office said Wednesday
CBO estimates that by 2019 the Senate legislation would reduce GDP by 0.1 percent to 0.3 percent on net. [The House bill] would have similar long-run effects, CBO said in a letter to Sen. Judd Gregg, New Hampshire Republican, who was tapped by Mr. Obama on Tuesday to be Commerce Secretary.
CBO, the official scorekeepers for legislation, said the House and Senate bills will help in the short term but result in so much government debt that within a few years they would crowd out private investment, actually leading to a lower Gross Domestic Product over the next 10 years than if the government had done nothing.
President Obama’s economic recovery package will actually hurt the economy more in the long run than if he were to do nothing, the nonpartisan Congressional Budget Office said Wednesday. (emphasis mine)
CBO estimates that by 2019 the Senate legislation would reduce GDP by 0.1 percent to 0.3 percent on net. [The House bill] would have similar long-run effects, CBO said in a letter to Sen. Judd Gregg, New Hampshire Republican, who was tapped by Mr. Obama on Tuesday to be Commerce Secretary.
The budget office had previously estimated service the debt due to the new spending could add hundreds of millions of dollars to the cost of the bill — forcing the crowd-out.
CBOs basic assumption is that, in the long run, each dollar of additional debt crowds out about a third of a dollars worth of private domestic capital, CBO said in its letter.
CBO said there is no crowding out in the short term, so the plan would succeed in boosting growth in 2009 and 2010.
The agency projected the Senate bill would produce between 1.4 percent and 4.1 percent higher growth in 2009 than if there was no action. For 2010, the plan would boost growth by 1.2 percent to 3.6 percent.
CBO did project the bill would create jobs, though by 2011 the effects would be minuscule.”
By the way…. here’s the link to the CBO’s nine page opinion on the stimulus package sent to Senator Judd Gregg’s office on February 4th.
It makes for some interesting reading.
Also, here is a list of some of the items in the bill, proving once again the sight of government in action is not for the squeamish.
Keep in mind, of course, the goal of the bill is to essentially create jobs. How all of these fit in is something of a mystery to me.
They are:
- $400 million for global-warming research
- $6.2 billion for the Weatherization Assistance Program
- $3.5 billion for energy-efficiency and conservation block grants
- $3.4 billion for the State Energy Program
- $300 million for energy-efficient-appliance rebate programs
- $400 million for hybrid cars for state and local governments
- $2.4 billion for carbon-capture demonstration projects
- $50 million for the National Endowment for the Arts
- $380 million in the Senate bill for the Women, Infants and Children program
- $300 million for grants to combat violence against women
- $2 billion for federal child-care block grants
- $6 billion for university building projects
- $15 billion for boosting Pell Grant college scholarships
- $4 billion for job-training programs, including $1.2 billion for “youths” up to the age of 24
- $1 billion for community-development block grants
- $4.2 billion for “neighborhood stabilization activities”
- $650 million for digital-TV coupons
- $90 million to educate “vulnerable populations”.
- $150 million for the Smithsonian
- $34 million to renovate the Department of Commerce headquarters
- $500 million for improvement projects for National Institutes of Health facilities
- $44 million for repairs to Department of Agriculture headquarters
- $350 million for Agriculture Department computers
- $88 million to help move the Public Health Service into a new building
$448 million for constructing a new Homeland Security Department headquarters- $600 million to convert the federal auto fleet to hybrids
- $450 million for NASA (carve-out for “climate-research missions”)
- $600 million for NOAA (carve-out for “climate modeling”)
- $1 billion for the Census Bureau
- $4.5 billion for U.S. Army Corps of Engineers
- $850 million for Amtrak
- $87 million for a polar icebreaking ship
- $1.7 billion for the National Park System
- $55 million for Historic Preservation Fund
- $7.6 billion for “rural community advancement programs”
- $150 million for agricultural-commodity purchases
- $150 million for “producers of livestock, honeybees, and farm-raised fish”
- $79 billion for State Fiscal Stabilization Fund
Oink…Oink….Oink.
Now is this really the best we can do? In my mind, it is just another argument for term limits.
However, I won’t hold my breath on that one either.
