Stimulus Package Shrinks Economy, Expands Welfare Rolls
The Stimulus Package passed by the Senate will encourage people to stop working and go on welfare, undermining the 1996 welfare reform law by rewarding states that expand their welfare rolls.
The stimulus package will also reduce the size of the economy within a decade, as the burdens of servicing the vast amount of national debt produced by the stimulus package stifle economic growth. That’s the conclusion of the Congressional Budget Office. Its honesty about the harmful side effects of the stimulus package is commendable, given that the CBO has every incentive to curry favor with its Congressional masters by hyping the benefits of the stimulus package and downplaying its costs.
Many economists oppose the pork-laden stimulus package, which does nothing to address the root causes of the current financial crisis. Those root causes included the Community Reinvestment Act and federal affordable-housing mandates, and political and legal pressure to make risky sub-prime loans.