consider the gigantic—as in close to $100 billion—amount of extra federal money these guys are proposing to spend on education. Study after study has shown that, at a minimum, there is no clearly demonstrable educational benefit from more aggregate spending on schools. Unless you adopt the hard-core Keynesian doctrinaire perspective that it literally doesn’t matter what we spend money on, this will be wasted. We will spend $100 billion on schools and not expect kids to read, write or do math any better. How can this be wise? Do we really want to borrow (because that’s where 100% of this money is going to come from) this much money from our kids for that?
Nobody wants to repeat the mistakes of Herbert Hoover. This is a healthy concern.Hopefully we will be able to restrain ourselves from passing trade restrictions. Trying to balance the budget or restrict the money supply right now is almost certainly a fairly crazy experiment to run.
Perhaps, though one could easily counter that statement by saying that spending over a trillion dollars on make-work projects is equally crazy, particularly when it’s known up front that vast sums will simply be wasted in the effort to spend the money as fast as possible. That simply doesn’t sound efficient.
Even if government spending advocates are correct in thinking that the stimulus project will work in the short-term there are still the long-term effects to consider. Specifically, when, if ever, will the money they propose to borrow now be paid back?
Deficits incurred as a result of the New Deal and WW II were paid back by the post-war economic boom and the years of relative stability. Are spending advocates counting on those fortuitous circumstances again? If so, I hate to be the one to say it, but that ain’t happening.
If today’s young people are going to enjoy a healthy economy we need to start being much more efficient with our military, education, and tax dollars. I don’t see that principle being invoked anywhere in the stimulus plan.