Government Stimulus, One Year Later

Last week marked the one year anniversary of the American Reinvestment and Recovery Act, or the stimulus bill, passing into law. While the debate over its success has been focused on whether or not it is stimulating the economy and on various questionable uses of funds, in my estimation this legislation is accomplishing exactly what it was intended to accomplish—grow the government.

Those of us concerned about the ever-increasing level of government debt gasped at the astonishing $787 billion cost estimates for this bill. True to form it has actually cost 10% more at $862 billion. We heard over and over that government could not sit around and do nothing while people lost their jobs and houses. The administration claimed that unemployment would not go above 8% if the stimulus bill passed. Now, a year later, the government estimates that unemployment is over 10%. The real number is closer to 20%. It appears that those promises were total fabrications in order to close the deal.

In any case, the American people know that more government spending obviously equals more government. If the goal was to strengthen the private sector, Congress would have allowed businesses and individuals to keep more of their own money through meaningful tax cuts. Outrageously, the administration claims that they did "cut taxes" by reducing withholding, and that they have stimulated the private economy by increasing the amount of money in every worker's paycheck. What they fail to mention is they did not change the total amount of taxes due. This means that all that money not withheld from paychecks will add up to a big unpleasant surprise when returns are filed this year. Many tax preparers are already seeing shocked taxpayers having to come up with big checks to the government when they normally expect a refund. Stimulus, indeed!

Rather than learning the lessons of the past year, the administration is moving full-speed ahead to do even more economic damage. . .