Obama now proposes to lay out $140 billion for infrastructure investments to "put people to work rebuilding America." But his 2009 stimulus package included $100 billion for investment in highways, bridges and other public works. The funds were supposed to be poured into "shovel-ready projects" to get the unemployed back to work in a hurry.
Not quite. Economists John Cogan and John Taylor of the Hoover Institution and Stanford University found that by the end of 2010, the federal government had spent only $5.6 billion on infrastructure. If the first attempt to shower money on this sector didn't work, what makes the president think a second one would fare better?
The payroll tax cut he wants to extend and expand is another exercise in irrelevance. It's supposed to spur spending by putting more money in paychecks and spur hiring by giving employers a tax break.
But most Americans didn't spend the cash they got from his 2009 tax cut: They used it to increase savings or reduce debts, neither of which boosts demand for goods and services. And without that demand for what they produce, businesses will not hire people to produce it.
The bleak fact is that when an economy suffers a financial crisis like the one that erupted in 2008, the ensuing recovery is typically slow, weak and demoralizing. It takes years to work through the bad debts incurred in the boom years, and there is no easy way to speed that process up.
In Nixon's time, Americans could believe that a speech and a program would banish economic woe. By now, we should know better.
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