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Wednesday, January 14, 2009
Jonah Goldberg :: Townhall.com Columnist
Skeptical of Obama's Stimulus Plan
by Jonah Goldberg
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Barack Obama has a curious definition of "non-ideological." He's insisting on bipartisan support for a stimulus package that will cost more than anything Uncle Sam has ever bought, save perhaps for victory over the Axis powers. He says he wants "to put good ideas ahead of the old ideological battles" and doesn't care whether they come from Republicans or Democrats. But he also says that "only government" can pull us out of this crisis.

It's like Henry Ford's line that you could buy any color car you wanted, as long as you wanted black. Obama is interested in any idea, as long as its peddler starts from the same "non-ideological" assumption that government experts know best.

In fairness to Obama, there is a huge consensus around the notion that government must do, well, something -- something big. Conservative economists such as Harvard's Martin Feldstein support a stimulus package. Heck, Senate Minority Leader Mitch McConnell passes for a fiscal conservative these days because he opposes any bill of more than $1 trillion.

It's the consensus that scares me. Chin-stroking moderates and passionate centrists often glorify consensus to the point where they sound like it's better to be wrong in a group than to be right alone -- an example of ideological dogmatism as bad as any.

Obviously, consensus can be good. But it also can lead to dangerous groupthink. Everyone knew that Iraq had weapons of mass destruction. Everyone at "60 Minutes" knew those memos about George W. Bush and the Texas Air National Guard had to be right. Everyone knows everything is right, until everything goes wrong. If that's not one of the great lessons of the financial collapse of 2008, I don't know what is.

Last fall, the smartocracy said the Treasury Department had to be given $700 billion for the Troubled Asset Relief Program because the government had to buy all that bad paper right away. Since then, Treasury has bought no toxic assets, done nothing to help with foreclosures and, a congressional report released Friday revealed, can't adequately explain what it did with the first $350 billion.

The current climate reminds former Freddie Mac economist Arnold Kling of the battle of the Somme in World War I (a war everyone knew would be over in six months). "Having experienced nothing but failure using offensive tactics up to that point, the Allies decided that what they needed to try was ... a really big offensive," Kling writes. "My guess is that in 1916, anyone who doubted his own ability to direct an enormous offensive involving hundreds of thousands of soldiers would never have made it to general. Similarly, today, anyone who doubts the ability of a handful of technocrats to sensibly allocate $800 billion would never make it into government or the mainstream media."

That might overstate it a bit, because some naysayers can be heard. Economist Kevin Hassett of the American Enterprise Institute notes that whatever the benefits of the proposed stimulus, they probably don't outweigh the enormous costs of the debt we would incur. As a result of the stimulus, the deficit this year would equal the total cost of the federal government in 2000. That's on top of $7.76 trillion in bailouts pledged by the government, according to Bloomberg.com.

The real reason the stimulus package will be gigantic is not that the smartest people with the best ideas say it needs to be. It's that Obama's real priority is to get the bill out as quickly as possible, which means every constituency gets something, including Republicans. Indeed, Republicans are a priority because if he can bribe them into supporting the bill, that might prevent them from campaigning against it in 2010 if it proves ineffective or counterproductive. Hence Obama's proposed billions in tax breaks for corporate welfare addicts and the lobbyists who love them. Democrats are justly skeptical about a tax break for a company that decides not to lay off its workers.

The GOP is right to question this "shovel-ready" infrastructure "investment." From World War II to the early 1990s, according to economist Bruce Bartlett, not a single stimulus bill succeeded at moderating the recession it was aimed at, while many bills helped invite the next recession. Bartlett supports a stimulus in theory (as do I); he merely notes that the political process tends to be just that -- a political process -- and it produces political results.

The best stimulus might be to trim -- or temporarily eliminate -- the payroll tax. That would put money in the hands of the people who need it -- and know best how to spend it. But that would be "too ideological" because it rejects the assumption that government knows best, and it would reward taxpayers, not politicians.

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About The Author
Jonah Goldberg is editor-at-large of National Review Online.
 
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When Everyone Agrees
about something, it's probably wrong. What would be right as a stimulus would be to eliminate corporate income taxes. Companies, not individuals, are what produce and what make this country prosperous. Lost revenues would be made up within a year from increased individual taxes from higher employment, higher incomes, and more exports. That won't happen because it would reduce government's (all bad) influence on the economy.

They all went to DC before the election
to vote for $350B. If they don't know what happened to it in less than a quarter I say we call for a new election and everyone from Oblaba on down gets thrown out.

I'm sold!
I want the black one - does it cost extra?

No Such Reality as Corp. Taxes.
Corporate taxes being paid by corporations is one of the most blatant misinformation campaigns ever concocted and sold to the American people. Do we really need to explain this?

Corporations pass on taxes to employees and buyers of their products. How do they pass them on to employees? Well, the taxes are figured into the cost of doing business, as are employee salaries and payroll taxes for employees which are paid by the corporations. If there were not corporate taxes on profits, could the employees be paid more for their labor? Sure. Could the corporations charge less for their products and still turn reasonable profits? Of course. This is how a tax on corporations get passed along into the rest of the economy. It's not rocket science.

If corporate taxes were eliminated, would corporations pay their employees more or charge less for their products? Not necessarily, but the market would eventually correct for that. Competition for good labor and competion to sell products would correct any imbalances, at least in the long run.

Reader:
"I want the black one - does it cost extra?"

We got the black one and he is going to cost a lot extra. You just wait and see. Bush will seem like a miser compared to Obama on the spending side. That is, if Obama carries through on all of the promises he made and really does implement the majority of his "change".

Joel, You're right about corp tax
I called for this weeks ago. His first act should be to cut capital gains and corp taxes for his first term to energize the markets and small business. He would put fiscal conservatives on both sides of the aisle at ease over the gloomy outlook for business. Its the least he can do if he's going to sock it to the interitance tax folks and smokers.

But the vastness of the stimulus which is only going to stimulate government waste will make all of the above pale in comparison.

stimulating - government
The only thing being stimulated here is an already bloated government. We are busily replicating the mistakes of the 1930's and will reap the whirlwind.

v/r,

-- Bud

Question
Why would anyone with a scintilla of intelligence and common sense believe that the arrogant fraud that is Mr. Obama, who has never accomplished anything of substance in his entire life, could create any sort of "economic plan" that was worth the cost of the match to set it afire?
I fear that we will see the end of the United States as a free and prosperous country in my lifetime, and that my grandchildren will grow up in a totalitarian state.

..............
-----He says he wants "to put good ideas ahead of the old ideological battles" and doesn't care whether they come from Republicans or Democrats.-----

Barack Hussein Abu Obama wouldn't know a good idea if it slapped him in the face. Which is why he's a dimwitted, economically illiterate liberal clown.

I am terrified of the Democrats
frittering away my hard earned tax dollars on "make work" projects.

Here in Los Angeles, Mayor Villaraigosa as a frighteningly manic gleam in his eyes as he anticipates dollars into the money pit he has created in this once great city.

Villaraigosa has been dreaming of his "Subway To The Sea," which will require tunneling from Downtown L.A. under the Wilshire corridor-- the major business artery in the city-- all the way to the beach.

Never mind that Los Angeles is earthquake country. Never mind that there are tar and natural gas pockets throughout the very area he intends to tunnel. Never mind that man hole covers have been blowing off the man holes all over West L.A. due to gas in the sewers. Never mind that the ground in the Santa Monica area is very soft, and was the site of serious liquifaction during the Northridge Earthquake. He has a dream that his descamesados can ride to the beach on the underground train and reality be darned.

I am expecting that the fools in Hollywood will cave into pressure from this graduate of The People's College of Law, and former V.P. of the ACLU, whose manic spending has driven Los Angeles into the ground.

I wonder if he will admit his error when the tunneling in the sandy soil of Santa Monica causes the gleaming tower on the corner of Wilshire and Ocean to tumble off the cliff onto PCH below?

CYA is all this is

Obama wants bipartisan support so that when it goes poorly, and he knows it will, him and the Dems won't have to shoulder all the blame.

I sure like this new brand of politics. *rolls eyes*

ITS COMING
If he is able to make his plan a reality its just a matter of time before the USA will resemble Angola! People killing each other in the streets just to get a days worth of food. Gov't is NEVER a solution to anything! Its ALWAYS the problem!!! God Help Us All!

Is there a choice
Why are we all acting like we have to accept anyting the "Aura Office" spews out? Can't we just make a personal decision to reject any help from the government? I know the stimulus is more than checks to citizens, but if enough constituents said "Thanks, but no thanks" wouldn't that be a strong message to Washington. I'm just a hick and maybe naive but it"s a thought.

Bi Partisan?
Obama wants ideas from Republicans that fit his liberal ideology. Conservatives won't be heard at all in this charade of unity. I hope the Republicans show some courage and stand up to this guy. The new taxes on smokers is just the beginning folks-all of you had better hold on to your wallet.

Morals, values, at risk.
We don’t have any conservative republicans who have stepped up as leaders yet in the house or the senate. Right now the left wing has the moderates they need to get whatever they want passing. Republicans on the hill were threatened that if they did not go alone with Obama’s want’s they would regret it, and be made known as races, this was the second day of work. Most of the republicans in office now are already subservient, cowardly, and wont stand up for the people they are to scare of making waves. And the liberal democrats had the one running who gave into most of their request and he lost, the only true conservative republican that was running was with him and the liberals and the media tried to destroy her. We have to have people who will stand up for the core values, liberty, equality, freedom, free-enterprise, tolerance, belief in greatness, a love of the constitution, in God we trust, low taxes, minimal government interference, strong military, showing global warming is a not man made. Don’t worry about how other countries see us, our founders left the British way of ruling for a free life a more just life a life with rules that took eleven years to put to paper, blood sweat and tears went into these words they declared for us to live by.

..............
------The new taxes on smokers is just the beginning.......----

Blue Ridge, apparently the cigarette tax is supposed to supplement the costs of medical care for illegals. That's right, medical care for illegals. Little did we realize that it's our responsibility to subsidize the lives of foreign nationals.

I welcome a Revolution.

..............
Yesterday I saw a preview for a movie called Defiance. It was awesome and I encourage everyone to see it. Conservatives need to show similar defiance towards Obama and the democrats socialist vision for America as the Jews did towards the nazis in Defiance.

Ah, the good 'ol days.
Way back when we were in the midst of the "Bush recession" in 2001, even a $200 billion deficit was the most evil thing on planet Earth to any Democrat (other than the notion of counting every vote...once and only once...).

Today Der Fuhrer Obama is talking about deficits in excess of ***$1.8 TRILLION*** for a single year, and all the Democrats are shouting "HOORAY!!!"

And Goldberg is right. This seeming "consensus" is proof positive that there is something SERIOUSLY wrong here.

Or as a very wise man once said:

"When great changes occur in history, when great principles are involved, as a rule the majority are wrong. The minority are right." -- Eugene V. Debs

Just because Bush was a total failure
along with the just kicked out conservative republicans does not mean we have to accept incompetence from our government.Obama is trying to solve a fiasco of a financial meltdown along with 2 wars without end.Don't worry if it goes wrong you will know who to blame.

Eliminate the payroll tax!
Not temporarily, as suggested, but completely.
I'm dreaming of course. But just imagine the chaos if every American worker had to write a check each quarter for the amount of Federal, State, FICA etc. due in full. Then figure in the penalties and late fees and...... Hey! I'm getting a tingling sensation running up my leg.

The invention of 'take home pay' and the advent of the withholding system is one of the best tricks our government has ever played.

Excellent column Jonah
Good idea for stimulation but, you are correct that it is way too ideological. How many republicans signed up for Reid's land grab again? The whores of the republican party can certainly be bought and quite cheaply it would seem.

..............
------But just imagine the chaos if every American worker had to write a check each quarter for the amount of Federal, State, FICA etc. due in full. Then figure in the penalties and late fees and...... Hey! I'm getting a tingling sensation running up my leg.------

Eugene, I agree. I'm a masochist so I cut one check to the criminals in DC each year. This would also be a good idea because it will give the taxpayer leverage. If the criminals in DC continue to fleece us and waste our hard earned money then we could have an organized tax revolt and bring the dregs in DC to their knees. I’d like to see them try to arrest 50 million fed-up taxpayers.

A million man march on DC with people carrying pitchforks and torches would get our pitiful politicians to see the light very quickly. Even the hardline leftists socialists would find religion when they see some of their communist comrades hanging from their necks.

free health care
American workers are out of work and illegal aliens are still working. Now we are going to pay for their free health care.

Bring on the Revolution.

Great Satan
Swing by Vegas on your way to DC. I'll split the gas with you.

Who builds roads
and bridges? Illegals that's who! Hussein is just playing to his constituency. 95% of the jobs he wants to create will go to illegals not the idiots who voted for him.

Everyone should stop the witholding tax from their checks and pay annually.

I'm
just sceptical of him period. He is an empty suit as far as decency, patriotism and faith but a filthy stuffed vacuum of corruption,, socialism and all the wrong people.

"Stand Down" Geithner,First Step !
Obama and His Wizards of Smart are attempting to give us FDR Redux,with Clintonites in The Drivers Seat.

Robert Rubin's Acolyte Tim Geithner stiffs The Taxman,while he dares to Stiff The American Taxpayer and take Our Confiscated Tax Money to throw down His Big Government Rat Hole.
In the meantime,Geithner's Mentor Robert Rubin just unceremoniously left Citigroup in the midst of a Semi-Ponzi Scheme Scandel.

Clinton Women nominees Zoe Baird and Kimba Wood and Bush's Linda Chavez all were rebuked and denied for Nannygate problems,which Geithner also has and yet the Democrats have not told this Imbecile Geithner to "Stand Down".

It is Time for a Legal and proper American Taxpayers Rebellion.

If NOT,then WE ARE THE STUPID And THE DESERVING SUCKERS !


James
What kind of revolution are you suggesting?

Jonah
"assumption that government experts know best."

Where was the tough article when Bush, Hank Paulson and Ben Bernanke were sceaming like dram queens for billions of dollars 'quick and clean?'

Woahhhhh Rev!
Subject: Morals, values, at risk.
We don’t have any conservative republicans who have stepped up as leaders yet in the house or the senate. --Rev.--

----------------------------------------------

I heard Michelle Bachman of MN on Beck today. She is standing firm and trying to garner support. That makes one we can count on. Let's party! One conservative!

Hammers and nails ..
I'm reminded of the saying "When the only tool you own is a hammer, every problem begins to resemble a nail".

In the Leftist's zero-sum view of economics, there is no such thing as the CREATION of wealth. Leftists believe that wealth is static, and only re-distribution can help the less affluent.

The fact, is that Govt spending drains capital (both current and future) from otherwise productive ventures that grow wealth, and create jobs. When President Obama talks about 'going big' on Govt spending, he is putting us on a road to even greater ruin.

Unfortunately, Republicans have given excellent cover to Leftist economists and politicians. No longer will anyone be able to say that there is a credible movement that offers a political alternative to big Govt. The Republicans went for Socialism-lite, paving the way for their 'betters' who really know how to do Socialism right! And, with cheerleaders (and active participants) in Congress, we are about to see the full-blown version unfold.

The reality is that in big Govt America, both Republicans and Democrats have the same tool, the HAMMER of big Govt spending. So, every crisis, whether in the banking sector, or real-estate, is approached with the same tool. The Democrats are open about it, since they never signed onto Capitalism - so, they can be unabashed with their eagerness to deploy the hammer. In fact, they are visibly gloating in the supposed 'failures' of Capitalism. As if the CRA, Fannie, Freddie and the Federal Reserve are creations of Capitalism!

So, the poisoned American economy is being offered more poison - as a cure.

To use a catchphrase of the Left: "Wake up, sheeple!"

Stoopids
Are they really expecting us to believe Geithner is the only person in the USA that understands TARP. Bold faced lie. NO ONE understands TARP.

the messiah and his bailout trillions
the messiah ran on the promises of increasing federal spending by some $4.5 trillion.

He promised every group he faced he would finance their special interest plans and projects.

But based on his tutoring by the hater wright, it seems the messiah is only doing an end run around congress to get money to pass out to the various victim groups he has pledged to represent.

Plain and simple, the messiah is determined to get some black payback to punish white america for the past sins of slavery and segregation.

He will only unite the country in making everyone lived impoverished lives. His idea you build the economy by making huge deficits and giving more handouts to the losers the dims cherish is pure fantasy, but what does he care.

The messiah is a socialist who only believes the govt should make every decision for the country.

Unfortunately the dumb party elected this clueless clown president

Science
Science has four steps: observation, hypothesis, experiment and evaluation. Economics is the only science where step four is never done.

Bush tried a stimulus package last year. It was an utter failure. So Barack Obama's solution is to spend even more money on the idea that has already failed.

How to be sure
When everyone agrees about something it is probably wrong. If people get mad when you ask HOW they know, you can be sure that it is false.

Maybe Its Time To Break Up
Nothing last forever! So just maybe its time for US to go our separate ways. You want the government to be involved with almost every part of your life; I on the other hand prefer that it stay out of my life. You want the promise of handouts; I prefer to make my own way in the world. You like an open relationship with multiple partners; I on the other hand enjoy a singular relationship. Do you understand the point I'm trying to make? We have just grown apart. Yes, I may be set in my ways, but they are my ways! You on the other hand enjoy new things. Call me old fashion and conservative, but that's just how I am. Sorry, but its probably best we go our own separate ways. I wish you all the best.

zapoodat
For one, try the Wall Street Journal.

You probably missed it because they don't have the comics or your horoscope.

I Cannot Lay Cable To Catalina Island
January 15, 2009
Jonah: As per usual, Jonah, an insightful article and hopefully it will stir the authentic change that we as Americans have never received since the meltdown. Among many other vocations that I have participated in I am now retired from government with all my benefits including family. I started my entertainment company before I retired hoping for the best. Three quarters of my retirement money has gone by the wayside, my heating oil is triple per month, my property taxes are double since we moved in, my electrical is double. Last night I called the plumber in and he was double. I do not think Americans will spend 40 grand for any GM as opposed to 18 for my Civic. These four million jobs are subject to the subtraction of lost jobs. What do they pay and who will they be looking for. I was born in 1951 and have no labor experience. Will Obama's jobs pay enough for my family to cope? I hope this is not the $7.00/hr Wendy's route they are planning.
Jay R

They got it wrong!
"Fascism will come at the hands of perfectly authentic Americans.who are convinced that the present economic system is washed up.and who wish to commit this country to the rule of the bureaucratic state; interfering in the affairs of the states and the cities; taking part in the management of industry and finance and agriculture; assuming the role of a great national banker and investor, borrowing billions every year and spending them on all sorts of projects through which a government can paralyze opposition and command public support; marshaling great armies.at crushing costs to support the industry of war..which will become our greatest industry.adding .global planning .under the authority of a centralized government in which the executive will hold.all the powers, with Congress reduced to the role of a debating society."

Fascism didn't come to America wearing jack boots and brown shirts. It came respectably-clad in suits and ties and calling itself Republicans and Democrats.

Ring a bell?
"I cannot undertake to lay my finger on that article of the Constitution which granted a right to Congress of expending, on objects of benevolence, the money of their constituents."

James Madison

IT IS NOT EXACTLY 1933
This is not exactly 1933 all over again. Unlike Franklin Roosevelt Barack Obama is inheriting a war from his predecessor. But unlike his predecessor Barack Obama is not a warrior.

THE NON IDEOLOGICAL OBAMA
When the "non-ideological" Obama says that he is open to new ideas it means any new ideas involving government intervention since non- government answers are too ideological for him.

COMMON SENSE:
"It don't make much sense that common sense don't make no sense no more." - John Prine

What was Obama doing during his Economic 101 classes at Haavvaadd?

Drinkin' the Miller & smokin' the killer?

Turn Out the Lights
I whole-heartedly agree with Jonah on this one. Unfortunately, we now live in a country where the past several generations have largely been brain-washed through our government operated indoctrination centers (schools), to believe that the government is the answer to everything. As the co-owners of two small businesses and the employee of a large corporation, my wife and I make a decent living at first glance, until you add up the confiscation of our earnings through federal tax, state tax, local tax, property tax, sales tax, commuter tax (I live in the 'burbs, work in the city), and a myriad of other hidden taxes that we idiot citizens don't even pay attention to. By the time you factor all that in, we get to keep an average of 23 cents of every dollar we earn. Imagine if we reduced this tax burden by half. What would you or any other normal person do if you found that your real disposable income just doubled?

A wonderful dream, but as long as we allow the government to continue to dictate to and direct every aspect of our lives, it's just not going to happen. I don't mean to be pessimistic, but I just have the sinking feeling that the party is over. The only way that this will change (for better or worse) is if there is a violent upheaval in this country. I'm pretty sure that we have become so soft, that the vast majority of people would never have the stomach for it, so table that option.

I forget who to attribute this quote to, but it does sum it up pretty accurately;

"Government at best is a necessary evil, at worst it is an intolerable evil."

n alert on Fox
states the House wants a stimulous bill of $850 billion with most of it going to health care and road construction and tax cuts in third place. This cannot be rushed through with this kind of plan.

Government money
Basic to this problem is the lack of understanding by the taxpayer that there is no "government money", only their money.

Hi Mark,
[Mark (PA) 1/15/09, 9:09 AM EST]

That quote is from Thomas Paine in his 'Common Sense' essay. Reference:

http://64.203.107.114/histdocs/commonsense2.htm

Second paragraph, first sentence.

Correct Assesment
Your assessment at the end of the article is correct. We need a tax break for several months. That way, the money is injected into the economy immediately, not some unspecified time in the future. The money is spent by those who earned it, not by bureaucrats that didn't.

I'll be reporting to my government reeducation center after posting this. I know it's too much common sense.

Why?
Joe Sixpack is told that they should never borrown money on their home, to pay off short term debt. So, I ask myself a very basic question. If it is wrong for Joe Sixpack to do that, why is it okay for the Government to do basically the same thing. It seems to me, they are all talking about a massive increase in the national debt (a long term debt), to solve what is essentially a short term problem.

7.7 trillion!!!
Is that on top of the dozens of trillions of dollars we will be short on Social Security and Medicare over the next couple decades?

Wow. No one can pretend that he isn't aware of the mess coming to us over the next twenty years, whether this bailout does what it intends or not.

Economic catastrophe looms and we're talking about this stuff. It would be hilarious if it weren't going to hit us so hard.

55 million
of us need to go on a tax revolt, we'll downsize government then. They need to know who really is boss.

Permanent tax cut
FairTax, people! FairTax!

http://www.fairtax.org

Eliminates all federal income, FICA, medicaid, and corporate taxes. Yes, it adds a tax on purchases - 23% - but that REPLACES the approx. 22% taxes which are ALREADY included in the prices we pay. Plus it eliminates the costs of tax compliance. No more threat of audits -- put all those IRS agents on border control or some other respectable jobs!

Permanent tax vacation
FairTax, people! FairTax!

http://www.fairtax.org

Eliminates all federal taxes: income FICA Medicaid, corporate. Replaces the %22 in taxes that is already factored into the price of products with a %23 sales tax, so prices remain basically the same, but you get to keep ALL of your paycheck. Plus you get a prebate of the cost of the sales tax on basic comsumption.

Eliminates the cost of tax compliance, so corporations will bring jobs back to the USA.

Eliminates the IRS. Put those agents into a respectable occupation instead -- since everyone is afraid of them, put them on border enforcement!

It's HR 25 -- write your representative!

What happened ?
Do they cross the line into Washington and become brain dead? I'm discussed with the way and the things they are spending our tax money on. It seems as though the rich are getting richer and the hard working people in this country are going to have to work harder and do without to pay back there debt. The companies that have received bailout money act like their rich Uncle has died and it's money for them to go on a shopping and spending spree with. Middle class Americans are getting the shaft! I can't see anything that they have come up with that is going to help the middle class Americans. I think that we all should say...enough is enough. If you get bailout money and spent it like most of these companies have tried to do, then you pay it back. Don't put it on the hard working people that are the backbone of this nation. Better idea....Fire Washington and start all over, they couldn't fight their was out of a wet paper bag!
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