Source: http://www.ibdeditorials.com/IBDArticles.aspx?id=318642615508143
By PETE SEPP | Posted Wednesday, February 04, 2009 4:20 PM PT
At roughly $850 billion and 650 pages and counting, the American Recovery and Reinvestment Act of 2009 is a hugely expensive gamble that the Congress and the president are apparently willing to take in a desperate effort to jump-start our economy.
Unfortunately, our lawmakers, now giddy with a wide-open, taxpayer-funded checkbook, have shoved more pork into this "recovery act" than a truckload of Smithfield hams.
The single largest spending bill in congressional history, this $850 billion "stimulus" is a massive expansion of government that will ultimately shortchange its financiers — American taxpayers. Shifting resources from the private to the public sector is a time-proven failure that threatens to widen our deficit and stall economic recovery.
With an actual price tag of $1.2 trillion when interest payments on this deficit spending are factored in, this is money that will come from an empty pocket. Congress will raise taxes at a time when Americans can least afford them, or it will borrow the funds and pass the astronomical debt onto the next generation of taxpayers.
On Jan. 28, the Wall Street Journal editorial page said: "This is a political wonder that manages to spend money on just about every pent-up Democratic proposal of the last 40 years." If that sounds exaggerated, review the spending provisions for yourself at readthestimulus.org.
A sampling of new expenses includes $1 billion for Amtrak (which hasn't turned a profit in 40 years), $696 million for constructing and outfitting the Department of Homeland Security's headquarters and $650 million for digital TV conversion coupons.
The bill also includes $20 billion in tax cuts for alternative energy, and an additional $32 billion allotted for a national power grid.
Instead of government-directed energy development — a known boondoggle since the Carter-era Synfuels Corp. — Congress should work on an expansion of existing resources from the Outer Continental Shelf and the Arctic National Wildlife Refuge.
This would provide a sizable and immediate stimulus for many through lower energy prices, in addition to generating billions in new revenues for states through royalties, land rents and income taxes. It would also create new jobs in domestic energy production, a viable industry that has weathered the economic upheaval.
Though the bill's advocates contend that a new industry of "green jobs" will result, House Minority Leader John Boehner recently explained to the Washington Post: "All told, the plan would spend a whopping $275,000 in taxpayer dollars for every new job it aims to create, saddling each and every household with $6,700 in additional debt."
A few of the spending items may yield measurable results, but it's clear that most of the projects aren't guaranteed to stimulate the economy.
Worse yet, any minuscule return on investment from these enormous outlays won't be felt for years, at which point the economy is projected to rebound.
According to a recent Congressional Budget Office report, less than 10% of the $355 billion in discretionary spending would be utilized by the end of fiscal year 2009, with more than $200 billion doled out between fiscal year 2011 and fiscal year 2019.
And so much for "accountability" and "transparency" — approximately $54 billion will go to federal programs that the Office of Management and Budget or the Government Accountability Office have deemed "ineffective" or "results not demonstrated," including the Economic Development Administration, the Small Business Administration and many more.
As it stands, our national debt exceeds a staggering $10.5 trillion, putting each American's share at more than $34,000. Why add to this collective burden when the outcome is anything but guaranteed?
Furthermore, once programs are bloated this much, big spenders in Congress could portray the slightest reductions as frugal, even if those programs remained historically overinflated.
A better approach is a pro-growth tax policy that will lay the groundwork for sustainable economic expansion. Otherwise, the government is defying its pledge as a responsible steward of taxpayer money.
In the rush to "do something quickly" to prevent the economy from sinking further, Congress and the new administration should proceed with caution before they drown us — and our children — in a sea of red ink.
Sepp is vice president for policy and communications for the 362,000-member National Taxpayers Union.
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