Basically, the stimulus bill is part incoherent mishmosh of pet projects and part wealth redistribution in the form of increased federal healthcare subsidies and unemployment insurance. Neither is very conducive to long-term growth. And while our infrastructure could surely use a little upgrade at the right time and the loss of American jobs should not be taken lightly, it is pure fallacy that that this stimulus package is the difference between prosperity and misery.
We should know better by now than to take doomsday prognostications from Washington at face value. Remember when Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke implored Congress to pass a $700 billion authorization to buy toxic bank assets, citing a meltdown if delayed? Despite eventual passage of the Troubled Asset Relief Program (TARP)—after weeks of delay and a three page bill morphing into hundreds of pages—only half of the TARP funds have been spent and not even to purchase bank assets. President Obama and the Treasury Department are once again proposing to purchase or guarantee bad assets on bank balance sheets, something we were told needed to be done months ago, lest the sky fall on our heads.
People should not be fooled by panic from inside the Beltway now either. While the recession is serious, throwing around taxpayer money will only exacerbate our economic problems long-term, and the urgency from Capitol Hill and Pennsylvania Avenue has far more to do with politics than our economic well-being. The standard-bearer for government spending in tough times, Franklin Delano Roosevelt, once said, “We have nothing to fear except fear itself.” Americans should have the courage to heed those words now, because our new President and his allies in Congress do not.