Why There Shouldn’t Be a Second Stimulus Package

There are two things in Robert Samuelson’s column in the Washington Post that I agree with completely. The first is this:

On humanitarian grounds, hardly anyone should object to parts of the stimulus package: longer and (slightly) higher unemployment benefits; subsidies for job losers to extend their health insurance; expanded food stamps. Obama was politically obligated to enact a campaign proposal providing tax cuts to most workers — up to $400 for individuals and $800 for married couples. But beyond these basics, the stimulus plan became an orgy of politically appealing spending increases and tax breaks.

I think that’s something that should be remembered. Those portions of the stimulus were politically necessary for President Obama, just as cutting taxes was politically necessary for President Bush. During an economic downturn, the president is expected to take action. The action will be along the lines of the rhetoric that he’s used in his campaign. We should neither be surprised nor outraged that’s the case.

I opposed the specific character of the Bush tax cuts but I recognized their political necessity and I further understand the political impossibility of the tax cuts I would have preferred: cuts targeted at incentivizing businesses to do more capital investing in the United States.

Similarly, we should be understanding of the analogous portions of President Obama’s stimulus package.

I agree with this, too:

There are growing demands for another Obama “stimulus” on the grounds that the first was too small. Wrong. The problem with the first stimulus was more its composition than its size. With budget deficits for 2009 and 2010 estimated by the CBO at $1.8 trillion and $1.4 trillion (respectively, 13 and 9.9 percent of gross domestic product), it’s hard to argue they’re too tiny. Obama and congressional Democrats sacrificed real economic stimulus to promote parochial political interests. Any new “stimulus” should be financed by culling some of the old.

Was it Albert Einstein who observed that the definition of insanity was doing the same thing and expecting different results? If President Obama demands another stimulus package and delegates its structure to Congress, we’ll get the same diffuse, ineffective, grab-bag mess we got the last time.

Expecting anything else is insanity.

1 comment… add one

Leave a Comment