Townhall.com, Where Your Opinion Counts
Talk Radio:   Bill Bennett   Mike Gallagher   Dennis Prager   Michael Medved   Hugh Hewitt   
BREAKING NEWS  LeftArrow - Townhall.com : Conservative, Political, Republican   RightArrow - Townhall.com : Conservative, Political, Republican  
Columns, funnies & more in your inbox!
  • Check the boxes and send us your email address to receveive your free newsletter
  • Your daily must-read of conservative columns, cartoons and news. Coulter, Sowell, Krauthammer and more.
  • Townhall.com’s weekly inside scoop on what’s happening behind the scenes in the world of politics. When news breaks, we report.
  • Signup to receive the latest daily Townhall cartoons
Wednesday, December 10, 2008
Donald Lambro :: Townhall.com Columnist
Critics Doubt the Wisdom of Obama's "Jolt"
by Donald Lambro
Vote on It:
Average Vote:
[+] Text [-]
 
Poll
Will the Dems' health care Christmas Present to America be an improvement or detriment to our health care system?


WASHINGTON -- Barack Obama's massive infrastructure spending plan to jump-start the economy isn't being criticized just by conservative critics. His chief economic adviser once called the idea one of the "less effective options" the president-elect is now promoting.

In a strategy paper in January that studied various economic-stimulus proposals, economist Jason Furman wrote that spending hundreds of billions of dollars to repair or rebuild the nation's roads, bridges, rail lines and other infrastructure was "likely to be less effective in spurring economic activity."

The reason: Big infrastructure-spending bills "do not provide well-timed stimulus or because there is considerable economic and administrative uncertainty about how they might work," Furman said.

While such public-works spending "might provide an important boost to long-term growth," he doubted it "would generate significant short-term stimulus" because all too often the money is not pumped into the nation's economic bloodstream "until after the economy had recovered."

One expects Obama's fiscally conservative economic critics to beat up his big-spending, New Deal-era ideas, but when his top economic adviser puts the core of his plan in the "less effective options" column, that's news.

But even other supporters of his giant stimulus have begun voicing doubts about whether a huge spending package -- in the $500 billion to $700 billion range -- can be spent quickly enough to have an impact on the recession. And some of them fear the stimulus may result in more wasteful pork-barrel spending.

Obama's plan will likely include, among other things, tax rebates for low- to middle-income workers, unemployment compensation, increased food stamps, Medicaid funding and other social-safety-net assistance. But infrastructure spending, pushed by the nation's governors, has become the plan's chief focus.

A week of interviews with economists around the country found little if any confidence in Obama's big-spending scheme.

"I don't believe it will work. Infrastructure spending has not proven to be an effective way to jump-start an economy in recession," said John Cogan, an economic policy analyst at the Hoover Institution at Stanford University.

"It takes considerable time for government agencies to evaluate alternative projects, put in place the required controls to ensure that the money is properly spent, and sign the contracts. The larger the amount of money to be spent, the longer it takes," said Cogan, a top fiscal adviser in past Republican administrations.

"Moreover, the spending tends to be wasteful. Projects funded under a 'stimulus' banner are often those that can't be justified on their own merits," he told me.

Cogan is not alone in thinking that old-style, New Deal, Keynesian pump-priming will be rife with waste as lawmakers stuff all kinds of pork into a stimulus bill before it leaves the station.

Even some liberal economists have their doubts about whether very much money can get into the economy if the recession is over by mid-2009.

"If this thing turns out to be (a smaller) downturn, we wasted some money but it's not the end of the world," said economist William Gale, vice president of the liberal Brookings Institution. Continued...

1 2
| Full Article & Comments | Next >
Share:
Vote on It:
Average Vote:
 
About The Author

Donald Lambro is chief political correspondent for The Washington Times.

Be the first to read Donald Lambro's column. Sign up today and receive Townhall.com delivered each morning to your inbox.

THE PLAN
IF HE REALLY WANTS TO GET THIS COUNTRY GOING AGAIN,CLOSE THE EPA AND REMOVE ALL THE REGULATIONS THAT HAVE DESTROYED THIS ECONOMY!

redsand and redlac
You are both pretty much dead right.

We allowed the twin farces of "globalization" and "deregulation" along with the clever Wall Street white shirts to basically sink our nation and it will get worse.

Also, we allowed our #1 export to be debt!

As one of you pointed out we have been living on someone else's dime and it could not possibly be sustained. I actually expected the financial collapse but I expected it to come when all of our debt holders decided they wanted to cash in all those clever notes that our government has been selling them.

But I got surprised by the scope of the money transfer that the white shirts were able to accomplish for themselves that caused the current meltdown.

Now when those foreign nations that hold our debt decide to cash in it will send our nation to an economical place that our unfortunate kids and grand kids cannot even imagine.

What a legacy.
Sign Up to Post Your CommentsSign Up to Post Your Comments
If you are already registered, click here to login. Otherwise, please take a few seconds to register with Townhall.com. Once you sign up, you’ll be able to post your comments immediately, use the action center, get podcasts, and more!
Note: Fields marked with a red asterisk (*) are required.
Salutation:
First Name:
*
Last Name:
*
Email:
*
Nickname:
*
Note: Nick name will be shown when you post comments.
Address 1:
*
Address 2:
City:
*
State:
*
Zip:
*
Phone:
      
Your daily must-read of conservative columns, cartoons and news. Coulter, Sowell, Krauthammer and more.
(Bi-Weekly) We highlight the best opportunities from our partners for surveys, action items and more.