The $787 billion Recovery Act is not the cause of the economic improvements, according to a study by the National Association for Business Economics. CNNMoney reports that 73% of economists “felt the fiscal stimulus had no impact.” The respondents feel the same about the $17.7 billion jobs bill just passed. Note that the White House’s Council of Economic Advisers claims it is on track to create or save 3.5 million jobs by the end of the year.
The survey’s findings are not at all surprising yet very important.
Not at all surprising because history shows that government intervention via stimulus is always too little and too late. Economies are cyclical which means they recover on their own. Government interference hurts those recoveries and negatively impacts the future. Stated simply, economic stimulus programs, other than immediate cuts in tax collections, actually hurt. They do not help.
The findings are very important because; in addition to the Constitutional issues surrounding government interference in the private sector and government taking, plus the moral issue of thrusting our problems onto our children, we have the cruelty factor. This stimulus was sold to the American public, few of whom understand economics, as a plan to help. This cruel deception was done in an effort to gain and control political power. The stimulus was vote buying by borrowing against our children’s future, not a fix to the economic problem.
Real leaders would have either made the very unpopular but effective decision to cease collection of payroll taxes for a quarter to half of 2009, or they would have told Americans the truth about inability of government to spend our way out of a recession.
Unfortunately, we do not have real “Leaders.”
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There are economists on both sides, but it seems to me that, since economic cycles are based in large part on psychology, having the government do something credible helps restore confidence to get people who are afraid to spend to get on with it. Of course, the definition of credible can be debated. I think it’s helpful to prove to the markets that the US government isn’t so hopelessly gridlocked that it’s unable to do anything. In any case, asking politicians not to do band-aid solutions for political purposes won’t get you very far. It’s important, though, to make sure they also fight the big battles. We have to get real financial reform to prevent boom-and-bust cycles and restore trust in our finaincial systems, and especially tackle shortfalls in Medicare and Social Security, the two overwhelmingly largest factors in out growing national debt.
What a terrible interpretation of that CNN report. 73% of economists said they didn’t feel it had an impact at their company. The question was not about the economy as a whole.
I walk the walk with a plastic bag and pick searching for cigarette butts. There are others like myself that hate those nasty looking things. We have formed a team, hired a flatbed truck and visit new areas each day. People applaud us, and ask for assistance, they also hate those cigarette butts on their streets. Unfortunately we are not making much progress, as we pick up one butt, another replaces it.
Millions are unemployed, but there is new hope for them in the cigarette butt collection business. Trillions of butts can be put into plastic bags and dropped off at the garbage dump. The task is endless because there will always be smokers, and a permanent job. The bag and picks are available. It is now up to the EPA to do the hiring and put Americans back to work.