“Stimulus” packages that increase government spending don’t work, notes Harvard economist Robert J. Barro in the Wall Street Journal.
The administration claimed that Obama’s $800 billion stimulus package would deliver a short-run “jolt” that would quickly lift the economy, but unemployment rose rapidly after its passage, and the package has actually destroyed thousands of jobs in America’s export sector.
Obama claimed his stimulus package was needed to prevent the economy from falling into an “irreversible decline,” but the Congressional Budget Office repeatedly admitted that the stimulus package will shrink the economy “in the long run.” The stimulus package subsidized lots of government waste and corruption.
Earlier this year, Obama fired an inspector general, Gerald Walpin, who uncovered waste and fraud in the AmeriCorps program, including by a prominent Obama supporter, affecting his access to stimulus money.
The stimulus package imposes on state governments wasteful racial set-asides and union-backed prevailing-wage requirements. The prevailing-wage requirements will cost $17 billion. Racial set-asides are very costly.
Economies are like children: they naturally grow, unless they are subjected to especially severe abuse and neglect by the government. So the U.S. economy will turn around by November 2010, despite Obama’s economic mismanagement and wasteful spending.
But long-run economic growth is likely to be much slower thanks to his harmful economic policies, which will massively increase the national debt even while raising taxes.