Robert Stacy McCain has a good piece in the American Spectator in which he argues that the so-called stimulus bill will not stimulate the economy. He’s absolutely right.
…Sen. Arlen Specter of Pennsylvania said: “I think no one could argue with the fact that the situation would be much worse without this bill.”
Really, Senator? “No one could argue”? Many certainly will argue with you, especially with your apparent assumption that “this bill” is the only possible response to the current economic crisis, and that we must either pass “this bill” or suffer the catastrophe about which the president has so direly warned.
The real problem with the stimulus bill is not that it is too big (although it is too big) nor its various objectionable ingredients (although many are objectionable), but rather that it is based on a false economic theory.
“The American people…did not vote for the false theories of the past,” Obama assured his listeners Thursday. Yet the “economic recovery plan” pushed by Pelosi and other Democrats is nothing but Keynesian theory in postmodern drag, elegantly costumed by the Orator-in-Chief with a lot of glittering generalities about “modernizing our health care system…21st century classrooms…and end[ing] the tyranny of oil in our time.”
This plan is not a Change We Can Believe In and, as I wrote two months ago, before Obama was inaugurated, it won’t work.
No amount of presidential persuasion, nor any conceivable quantity of federal spending, can repeal the basic economic law of supply and demand. Thus, if Congress should enact this idiotic “stimulus” — a neo-Keynesian pump-priming venture absurdly overbalanced to the demand side of the equation — nothing is more predictable than its failure to spur real recovery. Indeed, the Pelosi plan is so close to being the exact opposite of what our economy needs at this juncture, many informed observers do not hesitate to say that it will actually delay recovery and perhaps make the recession far worse than it already is. […]