August 13, 2008
-- by Dave Johnson
Earlier this year we borrowed $152 billion and sent checks to everyone, calling it a "stimulus package." The interest on that borrowing alone will add another $6.8 billion per year to our budget -- forever -- assuming rates don't rise. Great idea.
Borrowing another $152 billion bought us a little bit of time. But last month retail sales dropped, and the economic downturn is back on track just as bad as before. And because of that borrowing the interest that we all have to pay will make it just that much harder to get out of this.
That "stimulus package" didn't create a single job. It didn't fix a single bridge. It didn't increase the country's productivity. It didn't build light rail anywhere. It didn't make us more energy efficient. It wasn't investment. It was more consumption. Borrowing to consume.
What if we put $152 billion into hiring people to retrofit buildings to be more energy efficient? What if we put $152 billion into hiring people to install solar onto the roofs of government buildings? What if we put $152 billion into hiring people to hold summer classes so people would qualify for better jobs? That would be investment. It would lower our future costs or increase our future ability to earn. What has happened to us that this wasn't even considered -- by the Democratic majority in the House and Senate?
Update - Thinking some more about this. In 2001 Bush said that news of the dramatic change from budget surplus to budget deficit after his tax cuts started taking effect was "incredibly positive news."
President Bush said today that there was a benefit to the government's fast-dwindling surplus, declaring that it will create "a fiscal straitjacket for Congress." He said that was "incredibly positive news" because it would halt the growth of the federal government.(He said this in August, 2001. Later, when people were upset about it the weasel tried to blame 9/11 for the deficits.)
Now we pay almost $500 billion at year for interest on the debt and this amount is rising rapidly. That $152 billion "stimulus package" was supposed to fix the economy. Think about the terrible effect on the economy of paying $500 billion each year just on debt interest.
Posted by Dave Johnson at August 13, 2008 3:45 PM
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