I woke up this morning to hear on NPR Nancy Pelosi lauding the hard work that the House appropriation committee members have put in to developing the massive $850 stimulus bill. It is hard when you are trying to accommodate the dearest wishes of hundreds of Democratic congressmen and probably some Republican ones to boot. This bill is a melange of something for everyone, and awesome in its size and scope -- tax cuts for the select groups of individuals, tax credits, grants to local governments, spending aid .... Amanda Carpenter at TownHall has a shopping list of some of the items that have been tossed into this salad. The amounts of money tagged and the variety of topics is staggering.
The Wall Street Journal reports that the emphasis is on government spending as being "the best and fastest way to create jobs." Sorry, but that is just not credible. Congress wants to direct the spending because they can't be sure that the private sector or individuals will spend the money the "right" way - we might save it or use it to pay down debt, which don't create jobs, but might get us out of this economic slump a little faster. In addition, all economists know that government spending is one of the least efficient ways to pump money into the economy. For goodness sake, why can't they just figure out a dollar value of stimulus, and send us all checks?
Congress wants to direct the spending so it can play favorites, who will return the favor at election time. If, as some economists have suggested, the government placed a moratorium on collecting payroll taxes, that would immediately put more money in the hands of consumers. In addition, if employers aren't paying payroll taxes, they'll be in a better position to hire people instead of laying them off. How long would the tax holiday have to last to provide the same stimulus value as the most recent round of stimulus checks?
Posted by: Faithful reader | January 16, 2009 at 01:58 PM