A Stimulus Bill or President Obama's New Clothes?

President Obama’s Stimulus Bill (the "Bill") should make any thoughtful person quake in his/her boots. Its current $787 billion price tag grows to more than one trillion dollars with interest over the next ten years or about $3,200 for each man, woman and child in America. It also represents more money borrowed in a lump sum than our Government has collectively borrowed here and there over most of its 233-year history.

The Bill was initially conceived as emergency legislation designed to soften the landing of an economy headed toward its worst recession since the 1970s. It has strayed considerably from that original intent. A recent commentary by Charles Krauthammer described it as an "abomination," which may be an inadvertent pun on Jerome Corsi’s book: The Obama Nation. Liberal Democrats, whose social policy agenda has been thwarted since the 1960s, loaded the Bill with new policy directives and spending programs inconsistent with and in some ways detrimental to its immediate need and purpose. The President admits the Bill’s emphasis is on spending, although he would also have us believe spending and stimulus are synonymous. As it stands, the Bill adds a measly 2-3 million jobs to the economy over the next couple of years, which translates into an outrageous price tag of $350,000-500,000 per job!

Acknowledging the inherent shortcomings of his Bill and to justify abandoning his commitment to post-partisanship, the President’s major endorsement of his Bill is that "it’s better than doing nothing," implying that Republicans are predisposed to inaction. The Republican response has been to first direct capital to address the housing/mortgage/banking problem at the root of our financial/economic crisis and then to emphasize proven tax-cutting measures to stimulate private spending by consumers instead of the Government. History and most economists side with the Republican strategy. The President’s other major endorsement is that "we need to act now." Temporarily eliminating payroll taxes for everyone could have been done overnight. Some Republicans claim they had a plan to create twice as many jobs at half the cost of the President’s Bill. Don’t we owe it to ourselves to hear them out? If our Government is going to blow a trillion dollars, prudence dictates it should make every attempt to get it right!

Even more disturbing than the President’s abandonment of his campaign pledge to work across the aisle with Republicans (only 3 in the entire Congress approved the Bill), is his apparent disregard for the advice of his own hand-picked economic experts. Key economic advisor and former Treasury Secretary Larry Summers stated clearly and early on that an appropriate and effective stimulus should be timely, temporary and targeted. The stimulus should create new jobs as quickly as possible, disappear when the economy recovers, and emphasize economic sectors likely to offer the biggest bang per stimulus buck. This Bill will likely fall short on those criteria. Furthermore, university economics professor and Obama advisor Christina Romer researched the issue and concluded that fiscal policy, whether it be in the form of government spending or tax cuts, does not provide an effective stimulus for economies in recession. Ms Romer also determined that apart from recession and in general a 1% tax cut produces a 3% increase in GDP, which most economists agree is far more effective than government spending in stimulating the economy. In light of all that, why does the President's stimulus strategy focus on fiscal policy and why does it emphasize government spending over tax cuts by a margin of 2 to 1?

The President claims to recognize the importance of our economic crisis and knows it will probably define his Presidency, yet curiously relinquished control of the stimulus legislation and delegated it to House Democrats who (he had to know) would seize the opportunity to draft a wish list of politically charged pork projects and social programs. After many iterations in the House and Senate, the result is a nearly 1,100 page document thrown together in a couple of weeks and revised copiously mere hours before its ultimate passage by the Senate. What happened to the President’s promise of transparency in the legislative process? Shouldn’t the President want to hear from a decidedly disapproving American public, if not congressional dissenters, before finalizing such a significant and transformational piece of legislation?

The President’s inspirational oratory about the need for and quality of his Bill rings hollow knowing that his White House played a minor role in its conception and no one, including members of Congress, read the complete document before voting to approve it. As responsible citizens and especially as lawmakers, they should know better and be ashamed of themselves. It would appear Democrats and the President have aggressively and hastily convinced themselves this Bill makes good sense and have done their best to bring Americans on board too. One has to wonder if this legislation in hindsight will be remembered as a Stimulus Bill or President Obama’s new clothes.