Stealth Stimulus
With the prospects for their transformative health-care bill looking dimmer by the day, Democrats have retreated to familiar ground: Stimulus! The $787 billion stimulus passed last winter is working, Democrats contend, but not fast enough. We need another $100 billion or so to spend our way out of this recession. If this is the first you’re hearing of this new stimulus bill, don’t be alarmed. The word “stimulus” has disappeared from the Democrats’ vocabulary, perhaps because a large majority of Americans correctly believe most of the money in the first stimulus bill was wasted. They’re calling the new package a “jobs bill,” as if renaming the same policies will yield different results.
Our arguments against these policies have not changed. What has changed is the amount of empirical evidence that has accumulated in favor of our position. Both this stimulus bill and the last one can be divided into roughly four parts: unemployment relief, aid to state governments, public-works projects, and tax gimmicks. None of these has contributed significantly to the recovery, and the enormous deficits required to pay for them put future growth in jeopardy.
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