Monday, February 23, 2009
Now that the so-called stimulus plan is law, we're left with one question: Will this package help us or hurt us? Unfortunately, I believe it is the latter, for a few reasons.
First, this package will ultimately mean less, not more, economic activity. The Congressional Budget Office has found that this bill will lead to a real 0.1 to 0.3 percent reduction in gross domestic product by 2019. That translates into our economy losing tens of billions of dollars.
Second, spending does not equal stimulus. From both sides of the political aisle -- from conservative economist Martin Feldstein, who originally supported a stimulus, to former Clinton administration budget director Alice Rivlin -- we hear that this particular bill won't actually stimulate the economy. Even two of President Obama's chief economic advisers, Peter Orszag and Christina Romer, earlier in their careers panned the idea that a massive infusion of government capital could provide the type of economic recovery we need now.
History shows the same thing. Neither the Great Depression nor Japan's experience in the 1990s suggests that government spending alone creates jobs or economic growth. Billions in taxpayer dollars spent in the 10 years following the 1929 stock market crash didn't push the U.S. unemployment rate below the high teens. And despite no fewer than 10 stimulus packages implemented by the Japanese, their unemployment rate more than doubled during the "lost decade."
Third, if you print enough money, you devalue it. We're moving to a tipping point of devaluing every American dollar and, as a consequence, rendering any short-term economic stimulation moot. Already in January the core-producer-price index -- one measure of inflation -- rose four times faster than what economists had expected. The more we spend what we don't have, the more this trend will continue.
Finally, ad hoc bailout after ad hoc bailout is freezing the driver of our economic engine -- private capital. For entrepreneurs to take risks in the marketplace, they need to know what the rules are. Yet that's not possible when even the Treasury secretary's best answer to that question is effectively: Let me get back to you with those details.
Unfortunately, the rush to do something for the sake of doing something means this bill is already law -- a mistake that we, and the generations to follow us, will have to live with.
-- Mark Sanford
Republican governor of South Carolina
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I am grateful for Florida's fair share of the federal American Recovery and Reinvestment Act of 2009. The stimulus dollars coming to Florida are critical to our economy and will help the hardworking people of my state. These funds will serve as a bridge to better economic times.
There is no doubt: These are historic and hard times for our nation. Yet I am optimistic about the future because of the innovation of our people, like the many hardworking Floridians I meet every day.
Challenges like those we face today provide a valuable opportunity for us to make government better, more efficient and more accountable to the people we serve. The troubles in our economy are having a real effect on those people, who are looking for work and searching for hope. Businesses in my state and across the country are struggling to stay afloat. Families are tightening their belts.
Government must tighten its belt, as well. Over the past two years in Florida, we have cut $7 billion in spending. Yet we have rightly maintained our commitment to our schools, to the most vulnerable among us and to our environment.
I recently unveiled my $66.5 billion budget recommendation for next year, in which I propose using $4.7 billion in federal stimulus money. Without these funds, we would need to cut an additional $3.4 billion in programs. This money will help us avoid tax increases and prevent deep cuts that would further burden Florida's families and businesses.
Florida will receive an estimated $12.2 billion in federal stimulus funds over three budget years. The package will provide tax credits, as well as immediate assistance in education, transportation, unemployment compensation and other aid. The stimulus money is expected to create 206,000 jobs in my state, jobs that the people of Florida need.
Yes, we all need to be vigilant about keeping government as efficient and accountable as possible. But this stimulus is necessary in these trying times.
-- Charlie Crist
Republican governor of Florida