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Short term help. Long term pain. February 6, 2009

Posted by neoavatara in Economy, Politics.
Tags: , , ,


Well, don’t say I told you so.

The nonpartisan Congressional Budget Office today released their analysis of the Stimulus Bill.  In short?

CBO, the official scorekeepers for legislation, said the House and Senate bills will help in the short term but result in so much government debt that within a few years they would crowd out private investment, actually leading to a lower Gross Domestic Product over the next 10 years than if the government had done nothing.

Yup, that’s right.  The CBO is the most respected analytical agency in the country, because its entire goal is to be nonpartisan.  And for the conspiracy theorists out there, remember that their parent is the Democratically controlled Congress.

N0w, admittedly they propose that in the short term (2009–2010), the stimulus would create single year increases over baseline growth of anywhere from 1%-4%.  But until now, I have heard of no one, including the President, discuss the long term repercussions of the bill.  Maybe they should actually start a true debate on this.

The public is also starting to become wary.  Poll numbers show decreasing support.  And Senate support is waning, as the clock is ticking.  Not good for an Administration that came in with so much energy and enthusiasm.  I again suggest that if the bill was cleaned of all non-essential spending, and focused on the welfare net, job production, and short term infrastructure, with additional tax cuts, it would pass easily. Why the Democrats are fighting for the pork is beyond me; and why President Obama has not demanded a ‘clean’ bill boggles the mind.



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