More of the Same Medicine

Obama addressed a joint session of Congress Thursday night and presented his jobs bill. First the good news: the proposal wasn't horrible. David Brooks, who is what passes for a conservative at the New York Times, has this:

Personally, my bottom line is this: I think the president has earned a second date. He's put together a moderate set of stimulus ideas. His plan may not be enough to jolt prosperity, but it might maintain its current slow growth.

Meagan McArdle has a nice breakdown of the President's proposal. It's about $250,000,000,000 in tax cuts and another $200,000,000,000 in infrastructure spending and direct assistance to governments.

I think that it's generally solid on the spending/tax cut side. The targeted employment stuff is basically a decent plan--we should be aggressively looking for ways to keep the long term unemployed from turning into the permanently unemployed. At worst, we put a little extra money into the pockets of taxpayers.

The bad news, as both McArdle and Brooks acknowledge, is that this proposal is more of what has already been offered and what we have already been doing. The Washington Post Fact Checker, Glenn Kessler, had the same impression that I did.

The speech mostly gave us a sense of déjà vu. From the president's language, you would never know that Congress already has acted under his watch to save jobs — the $800 billion stimulus plan passed shortly after he took office.

Kessler provides a nice stump the reader exercise. He has a list of 11 quotes and challenges you to guess which is from Thursday's speech and which is from his 2009 speech urging the first, larger stimulus bill. I am betting that the President himself couldn't pick the right answers.

The President's bill is more of the same medicine. The best you can say about the first stimulus bill is that things would have been worse without it. That may be true, but it is what you can say about any medicine that the patient took and didn't die, even if his arms and legs fell off. Does anyone really think that more of the same medicine will suddenly start working? Employers don't.

The bit about infrastructure spending sounds good. At least we get repaired roads and safer bridges. Unfortunately, there is no reason to think that the President can find more "shovel ready" projects today than he did after the first bill was passed. It turns out that there are big bureaucratic obstacles to increased infrastructure spending. Congress is unlikely to remove all the labor protections and environmental rules that would allow a surge in such spending in the short term.

The bigger problem with the speech and the proposal is that it seems to be so obviously designed to allow the President to purse his lips. Congress should pass this bill right now. To do otherwise is irresponsible. It would be putting party ahead of the country.

That would be fine if the President were acting responsibly. He isn't. He piously proclaimed that "everything in this bill will be paid for. Everything." That is an extensive, obese, inexactitude, otherwise known as a big fat lie. He has asked the "Supercommittee" that is responsible for finding cuts in future federal spending of $1,500,000,000,000 to find another $450,000,000,000 in cuts to cover his new stimulus. This is a committee over which neither he nor the legislation he is proposing can have any control. Its job is difficult enough as it is. To toss this burden on the committee is blatantly irresponsible. To pretend that asking the committee to pony up amounts to paying for his bill is lying.

The whole point of stimulus spending is not to pay for it right now. If it is to work, you borrow on the future in the hopes that you can trigger economic growth that will turn a surplus sooner or later. We don't have to ask whether that can work because that is what we are already doing. We are running deficits of well over $1,000,000,000,000 a year. We are spending, and running deficits, and running up the federal debt, on a level not seen since WWII. If that doesn't work, will another $450,000,000,000 really turn the trick?

The Administration is in an unprecedentedly difficult situation. It is hardly Obama's fault. A half century of fiscal irresponsibility has led to this moment. We should have seen that coming. The massive spending increase of Bush 43 and Obama have brought about the current fiscal calamity, which no one could have imagined only a few years ago.

What is desperately needed is a plan to put the U.S. on the course to fiscal stability. Only in the context of such a plan would more stimulus spending look feasible. The President is going to announce such a plan in a few days. Maybe it will be genuine and serious, though it is very hard to imagine that right now. Maybe it will be another opportunity for the Hyde Park Hamlet to purse his lips.

Comments

[Bill Fleming]

"If that doesn't work, will another $450,000,000,000 really turn the trick?"

(clears throat... *ahem*... gulps.)

Well KB, that would be a lot of tricks. Eco-devo, Vegas style? Jobs. Jobs. Jobs?
I suppose it's one way to get the wealthy to pony up.

Okay, just shoot me. (...blushes)

[George Mason]

The greatest failure of president teleprompter is his inability that temporary anything is just temporary. No business owner or CEO is going to make long term plans on the temporary. When the tax break ends or the program runs out you are right where you started.
It is almost certain that his "infrastructure" programs will include another executive order that the contracts may only be let to union contractors (eliminating 80% of all potential bidders). Doesn't take much imagination to know what that will do to the cost of the projects.

[duggersd]

If everything is paid for, then does that mean he is going to ask the Super Committee to find more taxes from someone else or actually cut the budget from someplace? Interesting considering I am betting the committee will not be able to meet its first objective, let alone this new one. Also, if Social Security is going broke and taxpayers are paying less into SS due to a temporary cut in the tax, does that mean Social Security will go broke faster?

[Soapy Johnson]

A reminder of how popular the first stimulus bill was ...
http://placeitonluckydan.com/2011/03/how-popular-was-the-stimulus-bill/

[Donald Pay]

I actually agree in a lot of ways with what KB has to say. The fiscal insanity of the past 40 years, except for a brief period during the Clinton Administration, has to be dealt with. Fine, we agree, but there is no way I agree with much of what the Republicans would do to settle that question.

I don't see the Republicans dealing with what has become their gospel, as summarized pretty well by Dick Cheney referencing Reagan's teaching: deficits don't matter. The escape clause to that, of course, is that deficits don't matter when the Republicans propose and defend tax giveaways to the super wealthy and corporate elite who provide you with your campaign money. And deficits don't matter when they want to engage in stupid wars. When the funds go to people in dire situations, who can't fund their campaigns, then deficits become a problem. So, if Obama's plan involves cuts to people who need Medicare, Medicaid or Social Security, I'm all for gridlocked government.

[Ken Blanchard]

Ladies and Gentlemen: I have to remind you again that Donald Pays is not a straw man! He really believes what he writes. He is all for fiscal responsibility as long as it doesn't actually involve any meaningful reforms.

[William]

More of the same, nothing paid for during his term in office, just a speech and no real legislative proposal to present for an actual vote. More nothingness from the President of Nothing.

Words without substance, is anyone surprised?

[Donald Pay]

The fiscal insanity has to end, KB. It won't end until we forever bury the policies foisted on this nation by the corporate elite and their puppets, mainly in the Republican Party. The rot is systemic from 40 years of corrupt dealings. The meaningful reforms that are needed are not something your Party has the ability to deliver, because they are the paid handmaidens of Wall Street and the corporate elite.

[William]

So, Donald, are you agreeing that much of the Federal State needs to be dismantled and we return to the Constitutional Powers, left mostly in the states? Do you concede that "grand plans" of a highly centralized government ultimately produce nothing but failure "writ large".?

[Bob]

In the same speech.
::tap tap tap:: Anyone out there? Anyone paying attention?

"Pass This bill NOW!!!"
"...the bill wont be completly written up and before COngress for another week or two..."

[duggersd]

Donald, I have to agree with you on a point. This is fiscal insanity. We are expecting a smaller and smaller group of people to pay for the rest of us. We are paying people not to work. We are paying farmers not to grow corn. We are paying for studies that have no impact on anything except to give some money to a university or something. We are paying more for roads and bridges because we require only contractors who have a certain type of employee, whether it be minority or a union. We are over-regulating our industries. We will not allow oil companies to drill in the Gulf, and then complain they do not pay enough money. We tax corporations at a rate that most other countries do not. We keep taking money from one group of people and giving it to others to redistribute the wealth. Should someone question this, we call them idiots. Yeah, we have fiscal insanity alright.

[Dave]

Quite a few economist have stated that what we've done was not enough, and that we should do more (as in increase the amount of) of what we've been doing...

Consumer spending (aka the middle class) is 70% of the economy. If you choke the middle class, the economy tanks and the rich just came that much richer. (or closer to being slave owners...)

[duggersd]

And quite a few economists have said that "stimulus" package was a big mistake. Taking money out of the private sector and picking winners and losers is no way to improve an economy. Since the "stimulus" did not move the needle and any jobs "saved" or "created" came at an expense of about $1,000,000 per job and the official jobless rate has actually increased and the real jobless rate is hovering around 16%, I think I will believe the sensible ones who believe that package was a mistake.