• The Progressive Caucus, a collection of Capitol Hill’s uber-liberals, called for a 90-day moratorium on mortgage foreclosures and at least $20 billion in federal aid to state and local governments for “neighborhood stabilization” activities.
• The federal spigot would lubricate constituencies all year. The Congressional Black Caucus wants more federal funding for summer jobs; environmental groups are requesting $200 million for weatherization assistance to help keep us warm in the winter.
• Ideas are so plentiful that some lawmakers are pushing for a second stimulus bill. Sen. Blanche Lincoln (D-Ark.) wants this next installment to include $21.8 billion in tax incentives for renewable energy and energy efficiency, more spending on roads, tunnels and bridges, and more. "We're not just talking roads; we're talking about clean water infrastructure and schools," she said.
Underlying all this irrational legislative exuberance is the willingness on the part of too many lawmakers to hitch their policy carts to tired economic theories. Liberal lawmakers, for example, believe that extending the period during which unemployed workers can remain unemployed (by an additional 13 weeks) actually enhances economic growth. They tout a study purporting to find that each $1 increase in unemployment benefits generates $1.73 in additional demand for consumer goods. In contrast, the same study also shows that tax relief for small businesses is a losing proposition, with each dollar of tax cuts boosting the economy by a paltry 24 cents.
Liberals quickly rejected calls for pro-growth tax relief, such as calls to make the Bush tax cuts permanent or the exciting package unveiled by 55 members of the House Republican Study Committee. The RSC members want to lower the top tax rate on corporate income from 35% to the average of our largest trading partners, or 25%, end the practice of taxing the portion of capital gains attributable to inflation, and make it easier for businesses to invest in new plant and equipment.
In short, ideas that actually would stimulate the economy are the first to be tossed overboard, leaving us with a “stimulus” plan that purports to be timely, temporary and targeted -- but really is tiresome, treacherous and a travesty.