Jim Manzi of National Review Online questions the impact of the stimulus plan when substantially more of the outlays occur in 2012 or later than in 2009. “If this is a ‘normal’ length recession, the spending bill will have the classic problem that fiscal stimulus does – namely, it comes too late to do much good, but right on time to help stoke inflation and misallocation of resources that are suddenly in high demand as the economy enters a recovery. And if this is a very long-lasting recession, more like a U.S. 1930s Depression or Japan 1990s ‘lost decade,’ then the problem is so long-lasting that we’re not really debating a stimulus bill, we’re debating a near-permanent shift of control of resources to the government, which doesn’t exactly have a sterling track record of success. Only if this is a ‘Goldilocks-length’ recession of more than one to two years but less than a decade (which is a pretty hard beast to find in modern American history) would this temporal spending pattern turn out to be wise.”
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15 Comments
I think what is needed immediately is some sort of increased ‘revenue sharing’ to help states and cities get through this. That is where you have all the ’shovel-ready’ projects lined up.
“we’re debating a near-permanent shift of control of resources to the government, which doesn’t exactly have a sterling track record of success.”
That is, of course, exactly what this is about. A gov’t which gains control of resources will NEVER give up that control; that’s not the nature of government. Gov’t always trends toward more control and tyrrany.
The founders understood that; that is why the Constitution is properly read and understood as a limitation upon government. Unforunately, the commerce clause has been read in such an expansive way that any effective limitation on the authority of the federal government in economic matters has long since been passed. We thus enjoy our economic freedom, the only freedom that matters to most people on a day to day basis, solely at the pleasure of those we elect, or perhaps more accurately, the whims of the permanent bureaucracy. The more control government, has the more that will be so.
And the more control government has, the more corrupt it will be. Those with money and connections have always lobbied and influenced government; that will never change (and the little guy the democrats claim to represent will always get screwed). The more control government has to divy out economic benefits, the more benefit-seeking behavior business and those who’s interests are effected will engage in. Heavy lobbying, and the attendant corruption and influence peddling, are the inevitable result, as sure as the sun rises.
Welcome to Hope and Change.
I like the traffic cones photo.
It’s a perfect metaphor for controlling an area under construction whether it be finance or roads.
Of course, both road and finance need repair – but the underlying side effects of controlling speed in construction areas might be analogous to controlling rate of growth (and who controls it) in the finance section.
rural philosophy 101 – ‘keep the shiny side down and no one will steal your stuff’
’shovel-ready’
AKA: pure pork.
Many of those “shovel-ready” projects are poorly thought out, unneeded, and designed to reward political allies.
But never mind that. There will be a rush to the trogh, by state and local governments, to dip into the federal cash while the cash is flowing. What matters is not whether the project is really needed, what matters is that each locality get it’s “share” of the largess while the getting is good.
It’s feeding time.
trogh = trough.
Editing is good.
“That is, of course, exactly what this is about. A gov’t which gains control of resources will NEVER give up that control; that’s not the nature of government.”
Perhaps bushco should have thought of this before implementing the policies that bankrupted not only the government, but the taxpayers as well?
Had bushco been able to think beyond the next news cycle or seen beyond the end of their noses, they would have seen this coming?
“no one could have anticipated”…
A goddam thing, apparently. Not 9/11, not the outcome of the “war on terra”, and certainly not the logical conclusion of reaganomics.
Voters? Take note.
“We thus enjoy our economic freedom, the only freedom that matters to most people on a day to day basis”
Are you kidding?
Seventy percent of them in kansas worried MORE about being free from gay marriage!
Reggie,
“I like the traffic cones photo.”
Yeah, you would. Personally, I think traffic cones should be outlawed, and traffic around road construction sites should be directed by politicians in orange jumpsuits.
Farm Gal,
“Seventy percent of them in kansas worried MORE about being free from gay marriage!”
For what it’s worth, I don’t mind a bit being in that particular 30%; it’s on the upside of history. Been there before, and we 30%ers eventually prevailed and will again! Keep the faith, baby!
“no one could have anticipated”…
Uh huh.
From the Seattle Post.
“FBI saw mortgage fraud early
The FBI was aware for years of “pervasive and growing” fraud in the mortgage industry that eventually contributed to America’s financial meltdown, but did not take definitive action to stop it.
“It is clear that we had good intelligence on the mortgage-fraud schemes, the corrupt attorneys, the corrupt appraisers, the insider schemes,” said a recently retired, high FBI official. Another retired top FBI official confirmed that such intelligence went back to 2002.
“We knew that the mortgage-brokerage industry was corrupt,” the first of the retired FBI officials told the Seattle P-I. “Where we would have gotten a sense of what was really going on was the point where the mortgage was sold knowing that it was a piece of dung and it would be turned into a security. But the agents with the expertise had been diverted to counterterrorism.”
. . .
Both retired FBI officials asserted that the Bush administration was thoroughly briefed on the mortgage fraud crisis and its potential to cascade out of control with devastating financial consequences, but made the decision not to give back to the FBI the agents it needed to address the problem. After the terrorist attacks of 2001, about 2,400 agents were reassigned to counterterrorism duties.”
Read more: http://seattlepi.nwsource.com/national/397690_fbiweb28….
Thank you Jed!
The bush recession has broad perameters, it’d be extremely hard to miss.
parameters
In case Manzi hasn’t noticed the current fiscal year is already 1/3 over – under Bush. So, it stands to reason that the big push will likely occur AFTER Obama can get things going.
True to their Big Bidness roots, the Republic Party and most CONs are demanding instant gratification.
One of the biggest causes of Wall Street banditry is the compelling force of the Quarterly Report. Ask any freelancer or private contractor for any business of substance: the check will always show up a few days after March 31, June 30, September 30, and December 31. They owe you the money but they pad their cash-on-hand accounts ’til the next Quarterly Report. It’s a given.
So now the CONs are griping about “timing” of the stimulus?
Yeah. It might take a while for designers and engineers and steel-forgers to get to replacing that rusty bridge on the south of town that’s sure to collapse next year, or later, or tomorrow. And all the money dedicated to infrastructure isn’t gonna be spent for a while. In the meantime, the engineers and the steel-forgers are gonna get work and go to the grocery store and buy french fries… and stimulate the economy.
Tax cuts — which to most of us means less money deducted from our pay checks — lose their appeal when you come to grips with the fact you may not get any more pay checks because you’ve been laid off.