Publication:The Columbus Dispatch; Date:Dec 2, 2009; Section:Opinion; Page Number:A10
EDITORIALS Overstimulation
Calls for more federal pump-priming are driven by election fears
The Democratic majority in Congress hopes to have a jobs-creation bill on President Barack Obama’s desk as soon as January. No dollar figure has been attached to this stimulus effort, but congressional aides have said that it likely will cost tens of billions of dollars.
This plan follows a $787 billion bill in February that was intended to create jobs and get the economy trucking again. Nine months later, 3 million more jobs have been lost, 10.2 percent of Americans are unemployed and 17.5 percent are underemployed, meaning they either gave up looking for work or they reluctantly took a part-time job to squeak by.
This less-than-stimulating stimulus adds the better part of another $1 trillion to the U.S. deficit and national debt.
If jobs were saved or created by the manipulations of Congress and the Obama administration, they were hard for the American public to see. Congressional Democrats are frustrated about that lack of visibility. A significant number of Democrat-held House and Senate seats that are considered to be in play for next year’s election are in states where the unemployment rate has topped 10 percent for the past couple of months.
Members of the majority party see no light at the end of the unemployment tunnel, and they know the voters might punish them for it in 2010.
Thus, the calls for yet another stimulus. If it passes, watch for the Obama administration to spin the results as it did with the last bill. Washington claimed that as of Sept. 30, the stimulus had saved or created 640,000 jobs directly and perhaps a million jobs indirectly. Almost overnight, stories appeared on TV and in newspapers across the U.S. disputing the numbers.
The Columbus City Schools, for example, reported to the feds that of the 212.5 full-time-equivalent jobs that the district expected to fund with part of the $64 million in stimulus it expected, about 65 percent were saved jobs, including 36 school administrators. But when the district was asked whether it was on the verge of laying off 36 administrators, it said no, the money for those positions would have come from another part of the budget. But “saved” and “created” were the only two options for reporting how the funds were used.
A new stimulus might be a do-nothing measure — economists say that even an aggressive new program would decrease joblessness by perhaps only one percentage point — or it could make things worse.
Business people and investors need stability and predictability in the economy, so that they can make long-term plans for economic growth with a reasonable expectation that conditions won’t change overnight and undercut their investments.
Having the government intervene in the economy every few months with massive spending programs or takeovers creates the opposite of stability and predictability; it creates uncertainty that slows or paralyzes private-sector decision-making, and this prolongs economic stagnation.
In the face of widespread economic distress, it is part of every politician’s DNA to appear to be doing something. But doing something that deepens a problem rather than fixing it is hardly what this battered nation needs.
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