Right to Left: Me, Mom, cousin Lori, Amy, cousin Cathrine.
And given the macroeconomic risks posed by the stimulus package, I think it makes sense to spend some time thinking about how all this spending will be paid for. Raising taxes? A bad idea from a policy perspective, as well as a shrinking well from which to tap due to the sharp downturn in our economy. Lower incomes. Smaller corporate profits. Fewer capital gains. All of these point to a sharp reduction in tax revenues, and the tax increases President Obama has in store will nary make a dent, and may well cost more than they generate over time. We could cut spending. One thing we can take away from the annual budget process is that true cuts, net reductions in spending, almost never stick. If this is where we are placing our hope we are living in fantasy-land. So the only other place money can come from is if we manufacture it. Sell Treasuries. Borrow and spend. The Great American Pastime.
Yeah, which is why I believe inflation is coming down the road – maybe a few years out, but coming surely. big time.
The legislation includes $7.7 billion in earmarks, which are unrelated pet projects that members of Congress insert in spending bills.
Sen. Evan Bayh, D-Indiana, said those who vote in favor of the bill "jeopardize their credibility."
"But the bloated omnibus requires sacrifice from no one, least of all the government. It only exacerbates the problem and hastens the day of reckoning," Bayh wrote in a Wall Street Journal editorial published Wednesday.
"Voters rightly demanded change in November's election, but this approach to spending represents business as usual in Washington, not the voters' mandate."
During the election season, Bayh was considered one of the front-runners to be Obama's vice president.
Too bad he didn’t get the nod – i like where his mind’s at.
The stimulus legislation, a.k.a. No Social Worker Left Behind, offers financial incentives for states to enlarge their welfare rolls. This looks like the beginning of a semi-stealthy repeal of the 1996 welfare reform. So it goes, as government, with a confidence disconnected from its current performance, toils to make more and more people more and more dependent on it.
In one wee particular, congressional Democrats want to shrink government. At the behest of the teachers' unions, the $410 billion omnibus spending bill dooms a $14 million (a rounding error on GM's bailout) scholarship program that enables 1,800 children, mostly low-income and minorities, to escape the District of Columbia's catastrophic public schools. But sinking this lifeboat for the poor serves liberalism's dependency agenda: No poor child left outside the government's education plantation.
Defining away the most prevalent economic problems of modern economies and failing to communicate the limitations and assumptions of its popular models, the economics profession bears some responsibility for the current crisis. It has failed in its duty to society to provide as much insight as possible into the workings of the economy and in providing warnings about the tools it created. It has also been reluctant to emphasize the limitations of its analysis. We believe that the failure to even envisage the current problems of the worldwide financial system and the inability of standard macro and finance models to provide any insight into ongoing events make a strong case for a major reorientation in these areas and a reconsideration of their basic premises