Thursday, January 29, 2009

How to do Real Stimulus

Rob Natelson, posting at Electric City Weblog has this from the Cato Institute showing that not everyone is in favor of the Democratic stimulus plan. It is indeed, a rather lengthy list of esteemed economists, but their bottom line is quite clear:
To improve the economy, policymakers should
focus on reforms that remove impediments to work, saving, investment and production. Lower tax rates and a reduction in the burden of government are the best ways of using fiscal policy to boost growth.
One of the problems with the so called "stimulus plan" is that it really does not kick in for another year and a half at the earliest. In spite of looking for "shovel ready" spending on infrastructure, it has instead become a grab bag of Democratic wishes, with almost nothing to actually create jobs outside of government accountants.
If Obama really wanted "shovel ready" there is an entire well developed set of infrastructure that is available to begin immediately hiring, investing, and creating the kind of good paying jobs that we all feel are necessary. It's called the business community.
Remove the taxes on businesses, eliminate capital gains taxes for a year, and let the government subsist off of the stimulus money instead of taxes. The potential for reducing unemployment, creation of wealth and restoration of the economy could take place in less than six months. Contrast this with the present plan that the Democrats say that Republicans are being "partisan" because they didn't buy into everything that the Democrats wanted. If you follow the CBO's analysis, we are just running up over another trillion in debt, and won't see anything for quite awhile.
But this plan would not be acceptable to the Democrats because they seem to believe that wealth is created by the government.
Our children and grandchildren will work their lives away paying for this mistake.


Anonymous said...

What does "shovel-ready" mean? Does that mean that no one will sue to stop any of the infrastructure projects?
Or should a better term be "lawyer-ready"?

just wondering

Steve said...

Well, if you mean the full employment of lawyers act, yes, it is shovel ready.