081222 Stop the Stimulus Madness

(CD Examiner Editorial) - The DC Examiner had a great editorial that everyone needs to read:

Two months ago, House Speaker Nancy Pelosi proposed a $150 billion economic stimulus package. Congress balked in part because back in February it had approved the Bush administration's $152 billion stimulus package. Two weeks ago, Pelosi was back hawking a $600 billion stimulus package. Now, President-elect Barack Obama is reportedly preparing - in consultation with Pelosi and other congressional Democrats - a $1 trillion stimulus package. This epic federal spending explosion is on top of the $700 billion Wall Street bailout, and the trillions of dollars of new "liquidity" created throughout 2008 by the Federal Reserve. Meanwhile, unemployment rises (except in Washington, D.C., of course) as the recession deepens, even as Washington's stimulus madness spreads faster than the monster foiled by Steve McQueen in the classic 1950s B horror movie, "The Blob."

We should do the same thing to the Washington stimulus madness that McQueen did to the Blob - freeze it. Stop spending money the government doesn't have. Stop approving taxpayer-funded bailouts. Stop piling up ever-more-unconscionable debt that future generations will have to pay back. Stop panicking. Stop the political grand-standing. Stop making the government blob bigger, please, while there's still something approximating a free enterprise economy that can eventually be revived.

Here's how absurd the mania has become: Leftist New York Times columnist (and Nobel Prize-winning economist) Paul Krugman, who supports Obama's stimulus plan, admitted recently that "the actual constraint is going to be finding enough stuff to spend on.... How much can you actually get going in time to help this [coming] year? .... Even with the [governors'] full wish list, you have trouble getting up to $100 billion." Yet, Obama wants to spend $1 trillion.

In other words, Obama and Pelosi want to spend money the government simply doesn't have on projects nobody can identify to create benefits no one will ever see. Earlier this week, the Peter B. Peterson Foundation - headed by former U.S. Comptroller-General David Walker - announced that the nation's total current and mandated debt - $56.4 trillion - now exceeds the entire "collective net worth of its citizens." This is genuinely scary stuff because so much of that spending is for naught. As the Heritage Foundation's Brian Riedl explains, "every dollar Congress 'injects' into the economy must first be taxed or borrowed out of the economy." That's why "massive spending hikes in the 1930s, 1960s, and 1970s all failed to increase economic growth rates," he said. By contrast, the economy grew during the 1980s and 1990s when tax rates were cut and the federal government shrank by one-fifth as a percentage of the Gross Domestic Product. Tax rate cuts stimulate every sector of the economy, while government stimulus packages benefit congressmen, bureaucrats and politically connected special interests like construction trades unions and Beltway Bandits. Stop the madness.

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