Tuesday, December 09, 2008

Here a Trillion, There a Trillion

Talk of an enormous "stimulus package" continues to gain momentum. What began as a $300 billion dollar idea is now being bandied about as a Trillion Dollar plan, as members of Congress get giddy over the opportunity to do what they do best -- spend other people's money. In this instance, it is a lot of our children and grandchildren's money, as all of this is deficit spending.

Has anyone thought about the numbers of dollars being poured into this? $150 billion in tax rebate dollars back in the spring. $700 billion to the financial services industry. Now, $1 Trillion in infrastructure spending to the states. The auto industry feels slighted that they are being nickled and dimed over their request for a relatively paltry $50 billion.

Add all of this up, and we are approaching $2 trillion in spending for stimulus. Given that the entire federal budget for FY2008 was supposed to be less than $3 trillion, does anyone think that we might look back on this one day and decide it was a bit excessive? If we spend $2 trillion on stimulus, that would be more than the entire federal budget in the last year of the Clinton administration.

If none of that gives the reader pause, perhaps the reader should note these comments about the proposed state stimulus package, taken from a report in the Dallas Morning News:

"If they are going to hand out this kind of money, we are sure not going to walk away from it," said Texas Transportation Commission member Ted Houghton of El Paso. "Not if 49 other states are lining up for the money. ... Whether it's the right thing to do, that is an entirely different question."

But even as officials at every level have begun compiling wish lists for what California Sen. Barbara Boxer said Monday could be a $1 trillion spending program, few details of the stimulus effort have emerged other than its eye-popping price tag and a consensus that it should be spent quickly....

"We're playing the cards that are being dealt us," said Coby Chase, top governmental affairs official at TxDOT. "This may or may not be the highest and best use of these transportation dollars, but at this time, that's not the point of the money. The package is aimed at stimulating the economy."

Meanwhile, proving once again the axiom that if you talk about spending it, they will come, the Washington Post describes a "lobbying frenzy for federal funds" descending on Washington.

It is generally understood that deficit hawks don't define policy during economic downturns, but members of Congress and the incoming administration, anxious to dig our way out of a hole, are passing out shovels with an unseemly enthusiasm. Perhaps they'll dig a hole to China.


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