Number 44: New stimulus package imperfect but necessary
Richard Fogal
Issue date: 2/17/09 Section: Opinion
President Obama's stimulus package had the Republicans hopping mad, despite his bipartisan overtures and gestures. In the end, however, this bill will likely be good for America because the cost of doing nothing - as the GOP wanted - was far too high a price to pay.
The stimulus bill is imperfect, but it was far better than doing nothing. Indeed, a majority of Americans - some 61 percent - supported the stimulus because they felt it necessary that the government do something to get us out of the current financial crisis. We know that when the entire economy is stalled - when consumption, investments and the balance of trade are all in decline - doing nothing to reverse trends in those indicators will contract our GDP even further, leading to higher unemployment and further prolonging economic recovery. According to many economists, including Nobel Prize winner Paul Krugman, the only surefire way to increase GDP under this climate is to drastically increase government spending in the hopes of achieving a multiplier effect on the economy. This is precisely what the stimulus does. It's the "People's Bailout."
It is quite hypocritical, to say the least, for the Republicans to bemoan the largesse of this latest stimulus package. A large portion of the very same GOP now opposing $787 billion on economic stimulus was more than willing to help former Treasury Secretary Hank Paulson pass the ultimately feckless $700 billion TARP bailout for Bank of America, Citigroup, Wells Fargo and a host of other financial institutions.
Furthermore, the same Republicans who whined about several million dollars here and there for various projects in this stimulus bill did not object when former President Bush requested scores of billions of dollars in "emergency appropriations" every 6 months to conduct the Iraq war, and when billions more appropriated simply "disappeared."
Sudden concerns over "too much spending" cannot possibly be serious. If they are indeed serious, then where was the GOP outrage against their own profligate President? Why was it okay to spend $2 trillion on wars in Iraq and Afghanistan, and $700-plus billion on banks, but not $787 billion on domestic government spending, infrastructure improvement and middle class tax cuts? Why is it acceptable to build schools in Baghdad with federal tax dollars, but not in Brooklyn or in Baltimore? (A question that ought to be answered by those GOPers who demanded a cut of $25 billion in school construction funds). This bill spends government dollars in America on projects that will benefit Americans, sustaining and creating jobs for American workers.
The stimulus bill is imperfect, but it was far better than doing nothing. Indeed, a majority of Americans - some 61 percent - supported the stimulus because they felt it necessary that the government do something to get us out of the current financial crisis. We know that when the entire economy is stalled - when consumption, investments and the balance of trade are all in decline - doing nothing to reverse trends in those indicators will contract our GDP even further, leading to higher unemployment and further prolonging economic recovery. According to many economists, including Nobel Prize winner Paul Krugman, the only surefire way to increase GDP under this climate is to drastically increase government spending in the hopes of achieving a multiplier effect on the economy. This is precisely what the stimulus does. It's the "People's Bailout."
It is quite hypocritical, to say the least, for the Republicans to bemoan the largesse of this latest stimulus package. A large portion of the very same GOP now opposing $787 billion on economic stimulus was more than willing to help former Treasury Secretary Hank Paulson pass the ultimately feckless $700 billion TARP bailout for Bank of America, Citigroup, Wells Fargo and a host of other financial institutions.
Furthermore, the same Republicans who whined about several million dollars here and there for various projects in this stimulus bill did not object when former President Bush requested scores of billions of dollars in "emergency appropriations" every 6 months to conduct the Iraq war, and when billions more appropriated simply "disappeared."
Sudden concerns over "too much spending" cannot possibly be serious. If they are indeed serious, then where was the GOP outrage against their own profligate President? Why was it okay to spend $2 trillion on wars in Iraq and Afghanistan, and $700-plus billion on banks, but not $787 billion on domestic government spending, infrastructure improvement and middle class tax cuts? Why is it acceptable to build schools in Baghdad with federal tax dollars, but not in Brooklyn or in Baltimore? (A question that ought to be answered by those GOPers who demanded a cut of $25 billion in school construction funds). This bill spends government dollars in America on projects that will benefit Americans, sustaining and creating jobs for American workers.
Viewing Comments 1 - 10 of 16
Mike Esteve
Mike Esteve
posted 2/18/09 @ 4:22 PM EST
Rich,
If you don't mind my asking, where did you arrive at the number "61%" for America's approval rating of the stimulus package? This percentage is far greater than any I have seen reported by major US polls. (Continued…)
Richard Fogal
posted 2/19/09 @ 12:09 AM EST
Mike,
Actually, that was a misprint. I had intended to cite a Gallup Poll taken February 11th which indicated that 59% of Americans supported the bill. (Continued…)
operation destroy idiocy
posted 2/23/09 @ 11:43 PM EST
Hey Rich, just a couple of informal questions.... how great is your knowledge of the dynamics of our economy and how it works?
Also, throughout the 20th century, Eastern European countries were burdened heavily with constant government intervention not just in the markets, but in every aspect of peoples lives. (Continued…)
Jack Mehoff
posted 2/24/09 @ 12:47 AM EST
Look here Dick Fagol, if you were any more wrong you'd make Baby Jesus cry.
Operation_Crap_On_U
Operation_Destroy_Idiocy
posted 2/24/09 @ 12:51 PM EST
OK, while Jack Mehoff and I may both disagree with RICH FOGAL, we're in an institute of higher learning for a reason... to avoid trivial and childish insults. (Continued…)
Richard Fogal
posted 2/25/09 @ 5:08 PM EST
Few things:
1. With an economic crisis of a magnitude this great, robust and honest intellectual debate should be how we approach the issue of how to fix our economic system. (Continued…)
Jack Mehoff
posted 2/25/09 @ 8:27 PM EST
I really hope you plagiarized that...if not, you're spending way too much time arguing on the internet
Mazen
posted 2/27/09 @ 9:44 PM EST
Thank you Rodrigo for posting that response.
You said it better than I could.
I also want to add when you create more money out of thin air you need more productivity. (Continued…)
mmshomali
Mazen
posted 2/27/09 @ 9:57 PM EST
I forgot to add gold hit $1000 an ounce last week. About a month- 2months ago it was around $800 an ounce.
That is fact and not mindless blabbering.
Here's some great investing advise. (Continued…)
Mazen
posted 2/27/09 @ 11:19 PM EST
Also, the better plan, which Rich is asking for, is for government to do nothing as in stopping wasteful spending, abolish the income tax, abolish the federal reserve, reduce government spending by A LOT, bring ALL of our troops home NOW, and shut down government bureaucracies, get gov out of the market, and return to the free market. (Continued…)
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