Last night President Obama delivered a speech to the House Democrats in defense of their fiscal stimulus package. Obama’s speech is so breath-takingly superficial and fundamentally dishonest that it must be read to be (dis)believed.
Here is Obama’s answer to the charge that the bill contains too much pork:
Then there’s the argument, well, this is full of pet projects. When was the last time that we saw a bill of this magnitude move out with no earmarks in it? Not one. (Applause.) And when you start asking, well, what is it exactly that is such a problem that you’re seeing, where’s all this waste and spending? Well, you know, you want to replace the federal fleet with hybrid cars. Well, why wouldn’t we want to do that? (Laughter.) That creates jobs for people who make those cars. It saves the federal government energy. It saves the taxpayers energy. (Applause.)
Thus Obama answers the charge that the bill “is full of pet projects” by noting that a bill of this magnitude with no earmarks is unheard of. And, in response to the dozens of pork projects idenitifed by the bill’s critics, he defends one minor one.
But Obama was only getting warmed up. His major howler was this:
So then you get the argument, well, this is not a stimulus bill, this is a spending bill. What do you think a stimulus is? (Laughter and applause.) That’s the whole point. No, seriously. (Laughter.) That’s the point.
Under this “logic,” any bill that contains spending should be enacted because, by definition, it provides “stimulus.” It doesn’t matter how much stimulus is provided or when the stimulus will occur. This is quite possibly the most irresponsible position ever taken by a president on an economic issue.
Just a few weeks ago, in his inauguation speech, Obama said that his touchstone for governmental action is how well it will work. Now the touchstone is whether it constitutes spending.
A highway project will “work” better, i.e., provide more stimulus, than a Pell grant. A program that spends money in six months (or one that provides tax relief even more quickly) will work better as a response to the recession than a program that will result in a government expenditure years down the road when the recession likely will be over.
Obama is correct that, given enough time, every spending program in the Democratic plan will result in putting money into the economy, and thus produce some degree of economic stimulus. The problem is that given enough time, every spending program in that plan will have to be paid for by taking money out of the economy. The result of taking money out of the economy is the opposite of stimulus.
Any meaningful analysis of the Democratic stimulus plan must include a weighing ot these competing effects. The Congressional Budget Office has weighed them. It concludes that the Democratic plan will hurt the economy more in the long run than if he were to do nothing. To be sure, the plan is about the short-run. But it is intellectually dishonest of Obama to defend non-short-run spending by claiming that it is stimulus by definition.
I fear that President Obama is substantially diminishing himself by making such bankrupt arguments to defend a bill that Nancy Pelosi and company came up with, and that the public understands to be radically partisan and vastly flawed.
JOHN adds: I’m quite certain that Obama is diminishing himself by making arguments that not only are dumb, but are understood to be dumb by most voters. However, being a bit less high-minded than Paul, I welcome the diminishment.
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