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More stimulus? (08/15/2010)
By John Edstrom
President Obama and congressional Democrats, one-trick ponies every one, have rolled out yet another round of “stimulus,” $26 billion additional to aid the states, mainly to avoid layoffs of government workers, supposedly teachers, firefighters, and police officers. The rationale he gave for this bailout to the states and their workers employs the usual Obama double-talk. It’s good, he says for states to get their fiscal houses in order, just as families must. “That’s a welcome thing. But we can’t stand by and do nothing while pink slips are given to the men and women who educate our children or keep our communities safe.”

What? It’s good for states and communities to get their houses in order, but they can’t consider cutting payroll, their biggest expense? (And I won’t even bring up the local teachers’ union which hasn’t yet settled its contract, refusing a small raise and holding out for a big one.)

In fact, most states have let their payroll and pension obligations skyrocket out of control to unsustainable levels. California, where the Hollywood stars and starlets hold forth to the nation daily on the subject of proper governance, is looking at meeting its monthly expenses with IOU’s – again.

One state in the nation has addressed its governmental obesity seriously, New Jersey, where newly elected governor Chris Christy closed a nearly $11 billion budget deficit entirely by cutting expenses – no tax increases. It can be done.

This process must go forth everywhere, and the last thing needed is for the federal government to borrow or print money and distribute it to state and local governments to put off the grim day of reckoning. The president claims that this proposal is paid for “by closing tax loopholes,” another way of saying tax increases on the private sector which will deprive it of the capital needed to expand and hire.

Massive spending on various government projects and make-work, piling up endless debt which will have to be paid back eventually by private businesses and workers, (many on short hours or with no work at all), does not spur the economy or create real jobs. The original nearly trillion dollar package was touted as the means to hold unemployment, now at 9 1/2 %, under 8%. This exercise in Keynesian economics – government paying one worker to dig a hole and the other to fill it – has not worked by any measure, despite its proponents’ newly revised claims that without it the sky would have fallen.

In fact, it is easy to argue that the first stimulus, along with the Obamian explosion of government spending, activity, and co-opting of the private sector, has hurt our economy, delaying the recovery by making employers and consumers alike unsure of what the future will be. They are very uneasy about massive debt, what it will be soon be costing to hire, and of course the eventual inflation that is bound to result from printing money 24 hours a day.

At one point American liberals could point to our betters in Europe who were leading the way to social democracy. But those folks have learned better, and they asked, as one, when the Obama administration urged more stimulus and higher debt, “Are you nuts?” European governments are now frantically cutting expenses, hoping they have time to stave off the collapse of the euro and bankruptcy.

But Obama and his cadres don’t yet get it. It shows you what an Ivy League education and life experience as a community organizer are worth.

J.E.

 

 

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