Blackmoor Vituperative

I have been browsing the internet to see what economists think about the stimulus package being promoted by the executive branch of the federal government (and woe to those in government who disagree — they will be portrayed as political animals shilling for their next campaign, in contrast to the clear-eyed visionaries charting this brave new course).

I am reading a lot about politicians who think borrowing trillions of dollars so the government can spend it is a swell idea, but I am not seeing many economists who agree…

The compromise economic stimulus plan agreed to by negotiators from the House of Representatives and the Senate is short on incentives to get consumers spending again and long on social goals that won’t stimulate economic activity, according to a range of respected economists.

(from Will the stimulus actually stimulate? Economists say no, McClatchy)

Kling begins somberly: “I think about what’s going on as an economist but I feel it as a father. My wife and I have three daughters between the ages of 19 and 25. And when I see what’s being done to their future I’m really angry. Back in September when they were talking about taking $700 billion dollars to unclog the financial system I wanted to yank Henry Paulson out of the TV screen and say to him: “Keep your hands off my daughter’s future.” But he got away with it. For me it felt like sitting there watching my home being ransacked by a gang of thugs. And now we’ve got a new gang of thugs and they are doing the same thing. So that’s how I feel, now back to how I think.”

Kling says this is a big bill, but not a big stimulus. There is nothing timely, targeted, or temporary about it. It is a simple transfer of money from one set of people to favored interest groups of the Democratic Party.

If economists had designed a plan, instead of Democratic politicians, it would look a lot like Greg Mankiw’s plan which calls for an immediate and permanent reduction in the payroll tax, financed by a gradual, permanent, and substantial increase in the gasoline tax.

(from Why the Stimulus Won’t Work: Thugs Ransacking My House, Heritage)

President Barack Obama insists that the massive $800 billion stimulus package is necessary to avoid “catastrophe.” Indeed, during his first primetime news conference, Obama said bigger was better, and pointed to Japan’s failed stimulus packages as a reason to go really big.

“We saw this happen in Japan in the 1990s, where they did not act boldly and swiftly enough,” Obama stated. “And, as a consequence, they suffered what was called the lost decade, where essentially, for the entire ’90s, they did not see any significant economic growth.”

Obama is right to cite the example of Japan. That nation’s collapsed housing and stock markets in the 1990s are very relevant to today’s recession. Between 1992 and 1999, Japan passed eight stimulus packages, totaling roughly $840 billion in today’s dollars. During that time, the debt-to-Gross Domestic Product (GDP) ratio skyrocketed, the country was rocked by massive corruption scandals, and the economy never recovered. All Japan had to show for it was a mountain of debt and some public works projects that look suspiciously like bridges to nowhere.

Will the goods and services in the Democrats’ stimulus plan—be they concrete for new highway projects or groceries for hungry families—pump up flagging demand and boost stalled economic activity?

If so, it will be the first time in recorded history.

(from Why the Stimulus Plan Won’t Work, Reason Online)

This package has passed, so I guess that is a moot point. What I am wondering is how best to manage our finances to survive its repercussions. Cut way back on our spending, I guess.