By a margin of 45% to 36%, the American people want to cancel the $787 billion stimulus package, reports pollster Rasmussen Reports. Economist Lee Ohanian, a professor at UCLA, explains the failure of the stimulus package in “The $787 Billion Mistake.” Economist Kevin Hasset describes how legislation backed by Obama would wipe out more jobs in “Obama Tells American Businesses to Drop Dead.” Economist Arthur Laffer explains today how we face massive tax increases and potentially massive inflation as a result of current government policy.
The stimulus package is harming the economy, both by triggering trade wars that have cost at least 40,000 jobs, and by driving up interest rates for businesses that need to borrow money to expand or create jobs. (The government is keeping down interest rates on its own debt by printing vast sums of money to buy its own bonds, in order to finance the exploding national debt, which will result in massively higher taxes).
The Congressional Budget Office admitted the stimulus package would shrink the economy “in the long run” (contrary to Obama’s claim that it would prevent “irreversible decline“), but argued that it would at least create jobs in the short run.
But the stimulus package turned out to be harmful even in the short run, because it was so badly designed. It poured money into sectors of the economy where no help is needed because unemployment is low, while siphoning money out of sectors where unemployment is high. Moreover, “states hit hardest by the recession are getting the least amount of stimulus spending.”
The stimulus package is just one example of the Obama Administration’s fiscal irresponsibility, which is driving up the national debt at a record rate. The illegal auto bailouts are another. They waste billions to keep unskilled auto workers enjoying wages and benefits that are much better than those enjoyed by the average American (while ripping off pension funds and bondholders).
The stimulus package has directly destroyed tens of thousands of jobs. A provision in the stimulus package that violated NAFTA by blocking a mere 97 Mexican truckers from U.S. roads “caused Mexico to retaliate with tariffs on 90 goods affecting $2.4 billion in U.S. trade,” destroying 40,000 American jobs. A costly trade war with Canada is also brewing.
Obama’s policies echo those of Herbert Hoover, who helped spawn the Great Depression through his protectionism and tax increases. One of Obama’s own advisers admits that “the barrage of tax increases proposed in President Barack Obama’s budget could, if enacted by Congress, kill any chance of an early and sustained recovery.”