The Philadelphia Inquirer weighs in:
President Obama and Congress must do more to make sure the $816 billion recession-fighting plan will deliver the most effective bang for all the borrowed bucks.
The Senate will take up the stimulus package this week, and there is plenty of room to improve it. The bill approved by the Democratic-controlled House would spend too much money on items that won't create jobs. Nor would it spend enough of the money immediately.
As the House bill stands, it would appropriate $356 billion to create jobs. But only 8 percent of that total, or $29 billion, would be spent between now and Sept. 30.
Less than half of it would be spent within two years, according to the Congressional Budget Office. The pace is too timid to offset the flood of job losses that rises by the hour.
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So, why is this gigantic pile of money supposed to create jobs when it is in the hands of the federal government, but supposedly lacks job-creating power when it is in the hands of the taxpayers from whom it was extracted?
ReplyDeleteWhen a taxpayer puts his money in the bank, it becomes capital for home loans, auto loans, education loans, or perhaps even good old-fashioned equity investing. All of those activities CREATE JOBS.
If the taxpayer uses his money to pay down personal debt, that makes more money available to the credit companies to offer to borrowers, which in turn leads to more consumption and investing, which CREATES JOBS.
The truth is that federal spending destroys jobs in the net, because bureaucratic activities degrade the spending power of a dollar, to wit: the government needs $1.25 to procure the same amount of goods and services that can be procurred in the private sector for $1.00.
That "lost" $0.25 multiplied billions of times means that thousands of jobs will never come into existence because the federal government decided to spend your money, instead of leaving it in the hands of the taxpayer.