Comments on: The Stimulus Package (and now for something completely different) http://paulcourant.net/2009/02/07/the-stimulus-package-and-now-for-something-completely-different/ Paul Courant's blog about libraries, economics, public policy, and other stuff Thu, 19 Apr 2012 19:09:12 +0000 http://wordpress.org/?v=2.9.2 hourly 1 By: Mike Perry http://paulcourant.net/2009/02/07/the-stimulus-package-and-now-for-something-completely-different/comment-page-1/#comment-602 Mike Perry Thu, 30 Apr 2009 00:41:25 +0000 http://paulcourant.net/?p=43#comment-602 Simply calling increased federal spending a "stimulus" doesn't mean that it's going to stimulate the economy. Federal spending requires federal borrowing (or printing money wholesale), and that money has to come from sources where it might be more useful. To use your analogy, it just might like taking water away from firefighters and using it to fill swimming pools for the politically well-connected. Some say that's precisely what Congress is doing, that there's more pork than stimulus in this bill. Where the money comes from also matters. If that money comes from the U.S., that's less money to be used in other and perhaps more productive ways. If it increases our foreign debt, particularly with China, then we're mortgaging our future. And China, to their credit, seems increasing leery about loaning us money. They have more sense than our current leaders. To me, what you suggest is particularly absurd in this case. We've had an orgy of consumer debt, of buying homes we can't afford, of running up debts that are beyond our means and what does the Obama administration want? He wants the government to engage in the same practice. The housing bubble has popped, but we like bubbles, so let's create a federal one. Exactly how does extreme deficit spending by the government cure extreme deficit spending by consumers? It's a bit like tossing gasoline on a fire or curing obesity by gluttony. At any rate, I think the economic and policy experts have spoken. 100 days in, the Obama administration has yet to fill many high-level positions, establishing a record unequaled in the history of the US presidency. They sense this administration will fail worse than that of Carter and they want no taint of it on their resume. Simply calling increased federal spending a “stimulus” doesn’t mean that it’s going to stimulate the economy. Federal spending requires federal borrowing (or printing money wholesale), and that money has to come from sources where it might be more useful. To use your analogy, it just might like taking water away from firefighters and using it to fill swimming pools for the politically well-connected. Some say that’s precisely what Congress is doing, that there’s more pork than stimulus in this bill.

Where the money comes from also matters. If that money comes from the U.S., that’s less money to be used in other and perhaps more productive ways. If it increases our foreign debt, particularly with China, then we’re mortgaging our future. And China, to their credit, seems increasing leery about loaning us money. They have more sense than our current leaders.

To me, what you suggest is particularly absurd in this case. We’ve had an orgy of consumer debt, of buying homes we can’t afford, of running up debts that are beyond our means and what does the Obama administration want? He wants the government to engage in the same practice. The housing bubble has popped, but we like bubbles, so let’s create a federal one. Exactly how does extreme deficit spending by the government cure extreme deficit spending by consumers? It’s a bit like tossing gasoline on a fire or curing obesity by gluttony.

At any rate, I think the economic and policy experts have spoken. 100 days in, the Obama administration has yet to fill many high-level positions, establishing a record unequaled in the history of the US presidency. They sense this administration will fail worse than that of Carter and they want no taint of it on their resume.

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