Martin Feldstein still has considerable political credibility. He argues that the tax cuts in the bill won't increase consumption, and the spending won't increase employment (in other words, why are we doing it?). Other items he discusses:
It would be better for the Senate to delay legislation for a month, or even two, if that's what it takes to produce a much better bill. We cannot afford an $800 billion mistake. . . .
On the spending side, the stimulus package is full of well-intended items that, unfortunately, are not likely to do much for employment... Has anyone gone through the (long) list of proposed appropriations and asked how many jobs each would create per dollar of increased national debt? . . .
The plan to finance health insurance premiums for the unemployed would actually increase unemployment by giving employers an incentive to lay off workers rather than pay health premiums during a time of weak demand. And this supposedly two-year program would create a precedent that could be hard to reverse. . . .
All new spending and tax changes should have explicit time limits that prevent ever-increasing additions to the national debt. Similarly, spending programs should not create political dynamics that will make them hard to end.
The problem with the current stimulus plan is not that it is too big but that it delivers too little extra employment and income for such a large fiscal deficit. It is worth taking the time to get it right.
This is essentially the position I've arrived at. This is a bill that (1) will not cause meaningful increases in consumption or employment, (2) is loaded with pork and long-time democratic agendas rather than targeted fiscal response, (3) is a massive increase in debt which will undermine confidence in government and put future policymakers in a fiscal straitjacket, and (4) is nearly certain, due to political capture, to mean a permanent expansion of government that hasn't been properly advertised or vetted as such by its proponents. Much like Bush used the 9/11 crisis to slide unrelated projects past the American people (like Iraq), Obama and the Dems are now using this crisis to impose massive unrelated liberal agendas which will be paid for by me and my unborn children. These permanent changes to the structure of government deserve a debate on their own merits, not a hasty, disingenuous defense using, inaccurately, the financial crisis as an excuse for immediate action. Mr. Obama's administration has even made claims that all economists agree about this stimulus.
This isn't what we were promised from Mr. Obama. He has replaced a partisan, right-wing government with a partisan, left-wing government, when we were promised a consensus-based, Change We Can Believe In government.
