President Obama won partly, because of the current economic downturn. He proclaimed that that the current market system in the
Now let’s fast forward 3 months.
The Senate looks poised to pass its own version of the House “Porkulus”/Stimulus bill. It is estimated to be around $780,000,000,000. Sen. Carl Levin promises to reinsert the money cut to bring over 3 Republican Senators, Sen. Collins (
Keynes theorized that there were two approaches to stimulate the Economy.
Through a reduction of interest rates and though Government spending on infrastructure. It is easy to see the similarities to Keynesian economics and the New Deal. Keynesians advocate deficit spending to invest on infrastructure, which in turn will stimulate more productions and investment, starting a cascade of events which is the basis for the multiplier effect, we hear about in the current Stimulus Bill debate.
The Keynesian approach is what brought Bush and Congress last year to give out Rebate Checks. Bush and Congress had hoped that the influx of cash would induce more spending. It was assumed that this increase of spending would nip the coming recession in the proverbial bud. President Obama claimed, during the campaign, claimed that his ideas were basis for the bill. When the rebate checks failed to induce the spending, as most Keynesians thought, Obama stopped making that claim.
I’m assuming here, that the prevailing thought, among Democrats, is that any and all government spending will beneficial and the bigger the federal deficit the better. What would Keynes think about $5,200,000,000 more for community block grants? They do not offer any simulative effects at all? The
$2,000,000,000 for renewable energy research, with $400,000,000 going towards global warming research do not meet either the Keynesian or Summers’ definition of stimulus at all. The list of un-simulative and un-Keynesian projects is massive.
- $4.5 billion for U.S. Army Corps of Engineers
- $850 million for Amtrak
- $87 million for a polar icebreaking ship
- $1.7 billion for the National Park System
- $55 million for Historic Preservation Fund
- $89 billion for Medicaid
- $30 billion for COBRA insurance extension
- $36 billion for expanded unemployment benefits
- $20 billion for food stamps
- $600 million for NOAA (carve-out for “climate modeling”)
- $600 million to convert the federal auto fleet to hybrids
- $450 million for NASA (carve-out for “climate-research missions”)
- $1 billion for the Census Bureau
- $350 million for Agriculture Department computers
- $150 million for the Smithsonian
- $34 million to renovate the Department of Commerce headquarters
- $6 billion for university building projects
- $2 billion for federal child-care block grants
- $300 million for grants to combat violence against women
- $380 million in the Senate bill for the Women, Infants and Children program
- $50 million for the National Endowment for the Arts
- $1.5 billion for green-technology loan guarantees
- $2.4 billion for carbon-capture demonstration projects
- $400 million for hybrid cars for state and local governments
- $6.2 billion for the Weatherization Assistance Program
This is not stimulus by any sense of the word. It is pure pork. The same pork President Obama cried out against during his campaign.