3/3/2010 – Editorials
By Richard Peterson
It wasn’t more than a couple months after the so-called Stimulus Bill was signed by the president that the conservatives started whining that it wasn’t doing what it was supposed to do, that it was nothing but wasteful spending, that it was a horrible boondoggle and on and on and on.
Now dozens of cases have come to light of hypocrite Republicans loudly damning the program on one hand and on the other hand posing for the cameras and taking credit when money from the program comes to their districts.
The primary problem with the Stimulus program was that it was too small to really shock the nation out of its recession.
Keynesian economics teaches us that when the private sector is not providing funds to keep the economy functioning, the government should step in with spending to stimulate it.
Keynesian economics absolutely works. Franklin D. Roosevelt, the greatest president of the 20th Century, tried to get the nation out of the Great Depression with government spending, but the spending level was too feeble to really get the economy going. When World War II broke out, government spending was more than sufficient enough for the nation to climb out of the Great Depression.
Conservatives, of course, refuse to accept this fact because it doesn’t fit with their ideology.
Government spending is only part of Keynesian economics. The other side of the coin is that when the economy heats up and threatens inflation the government should pay back the money it borrowed, thus cooling down the economy. This has only been done in a few instances, during the years Bill Clinton was president.
Don’t blame Keynesian economics for the debt; blame the politicians for not making the hard choices they should have made when times were good.
Yes, the Stimulus adds to the national debt, but not having the Stimulus would have been much, much worse. We would now be in another Great Depression had it not been for the Stimulus funds.
When a nation is in a recession or heading for a depression is not the time to try to balance the budget. That would be totally counterproductive.
Across the nation much of the Stimulus funds have not even gotten into the economy. Very little of North Dakota’s share of the Stimulus funds have been spent. I don’t think any of Benson County’s Stimulus funds have been spent. This will be spent this summer on graveling roads. So there’s a lot more Stimulus coming.
I look for a turnaround in the economy in 2010 simply because of the remainder of that Stimulus money coming into play.
Here’s what Bill Anderson wrote in the Sargent County Teller at Milnor:
February 17 marked the one year anniversary of the passage of the American Recovery and Reinvestment Act (ARRA), better known as the Stimulus Bill. The $787 billion program, divided among spending programs and tax cuts, was intended to stimulate the economy and encourage the creation of jobs by American businesses.
Ninety-five percent of American taxpayers had their federal taxes reduced by one or more of the 25 tax cuts contained in the measure. No federal taxes were increased by the bill. Slightly more than half of the bill’s funds were allocated to tax cuts with the rest being direct spending, primarily on infrastructure improvements. One year after passage, approximately $450 billion, mostly in the form of tax cuts, had been implemented. The Obama Administration claims that the program has created or saved more than two million American jobs. Partisan opponents call the 2009 Act a boondoggle and a waste.
At the one year mark, though, it might he a good idea to take a look back at where the nation, and the world, stood at this time last year.
At that time the stock market was in free-fall; the world financial system was teetering on the brink of collapse; the American auto industry was disintegrating; unemployment was skyrocketing; and there was not an encouraging word to be heard, except from President Obama, who said that the problems being experienced were man-made and could be solved by man, if we acted rationally rather than emotionally.
Today serious economic problems remain, but the stock market has recovered substantial portions of its losses, the financial system has pulled back from the brink and has regained some stability, unemployment is still high but is not climbing and the economy has created, rather than lost new jobs during the last two months.
So, the question is: is the American Recovery and Reinvestment Act responsible for the improvement from conditions a year ago?
Republicans say NO! But then they are still trying to tell everyone that Franklin D. Roosevelt and the New Deal didn’t do any good during the Great Depression, either. Their motives are suspect and they are lacking in credibility.
Democrats say YES! But they, too, have a political motivation for their response. The fact is, though, that President Obama and the Democratic-controlled Congress took decisive action in an emergency situation a year ago and conditions are better now than they were then.
Thinking Americans can make their own decision.
It might he a good time, as well, to look back to where the nation and the world were at the beginning of the 21st Century when, with Bill Clinton’s $300 billion budget surplus in his pocket, unemployment at record lows and the world at peace, President Bush stood before the GOP-controlled Congress and the country to tell us that we could give huge tax cuts to the wealthiest two percent of Americans, strengthen Social Security and reduce the national debt, all at the same time.
Well, the Bush Administration delivered on one of the three.
Over the next eight years we borrowed trillions for untargeted tax cuts for the wealthiest, tried to fight two wars on a credit card, pulled the props out from under the world’s financial structure and set the stage for the demolition of American industry.
It did, after all, take eight years of mismanagement, incompetence and ineptness to create the situation that existed in February of 2009. It will probably take more than one year to dig our way out of it.