February 6, 2009
Arguments Over the History of Government Stimulus Packages
We all know the familiar quote: "Those who do not know history are doomed to repeat it." But there is another: "Those who know history are doomed to spin it." The history of the government works packages in Japan in the 90s and in the United States in the 30s is the subject of competition theories. All who study both periods agree that neither worked well. There was tremendous waste and the programs did not solve either economic crisis, other conditions did (the War in the United States and growth of demand for exports from Japan). There is stops. Big spenders argue 1) waste can be avoided and 2) the programs were not big enough. The United States, for example, hesitated in 1936 -- the debt was unnerving--and lost momentum. If we want to "go big", bigger than their Japan or the United States in the 30s, we will need to at least double the current spending bill -- we need to spend at least $2 Trillion. I am on the other side. The history shows the reverse: government spending bills do not work and they are inherently wasteful. Japan's history shows in detail that a spending bill written by a democratically elected legislature will necessarily include pork for everyone and will necessarily be wasteful (and backward looking). Our current bill is more evidence of the same. We are shocked, shocked, that the government has mispriced $78 b in TARP securities, has failed to follow the effects of $350 billion in TARP payments, and is currently fighting over obscure cash grants for golf courses. I am not; I expect it. The President's arrogant attempt at mocking critics "Of course, it's a spending bill...that's the point." is hilarious. We fools thought it was a "jobs bill" or a "GDP increase bill."
Keep in mind that on top of this $800 to $900 b "spending bill," we will spend another $350 b in TARP and another $600 b in the Fed rediscount purchases and may have another round of $1 T bank bailout packages in the works. We should ask our representatives in Congress first how we will pay it back, before we spend it. The payback debate should accompany the debate over whether we could use the babbles. Have you heard any serious discussion by Pelosi or Reid on how we pay it back??? The debates should not be over whether we need new schools and road, of course we do (Obama's arguments on the merits of the spending programs was disingenuous--of course, given no cost, we'd rather have the stuff), the debates should be over whether we can afford new schools
February 6, 2009 | Permalink
TrackBack URL for this entry:
Listed below are links to weblogs that reference Arguments Over the History of Government Stimulus Packages: