Son of Stimulus is likely to be as big a disaster as its parent

Son of Stimulus Set to Attack American Economy

By Daniel Greenfield
Tuesday, December 1, 2009

Even as the health care debate continues to rage, Democrats have their hearts set on countering their disastrous ratings and the loss of the independent voter by rolling out a job creation package, or Son of Stimulus Plan. There are no clear plans yet, but the ones floating around as preliminary ideas are bad enough on their own.

With price tags going as high as 1.2 trillion dollars and various gimmicks being trotted out to hide their cost and avoid blame for inflating the already massive deficit further, the Son of Stimulus is likely to be as big a disaster as its parent.


Take House Democratic leader Steny Hoyer’s plan to pay for a job creation plan with a financial transactions tax. Not only would this plan help push investors out of the US stock market, at a time when the market is already in bad shape, but it would weigh down the stock market thereby preventing companies from expanding and going public. Which naturally would crush the very same job creation congressional Democrats claim to want.

After spending taxpayer money to bailout Wall Street, and now that the Dow Jones has hardly passed the 10,000 mark, congress now wants to abort the recovery by taxing Wall Street for their job creating programs. Which will help push the Dow Jones back down and perhaps allow for a second bailout of Wall Street. Which will naturally outrage taxpayers even further, leading to another attempt to tax Wall Street. That is the kind of economy lunacy that governs the thinking of Washington D.C., mixing the worst of socialism and corporate welfare into one indigestible stew.

Hoyer is promising that the bill would include extended unemployment benefits, which is fitting enough since the bill itself would help perpetuate unemployment by killing job growth. That same paradox lies behind virtually all of the Democratic job creation plans, which is that they involve taking money out of the economy, lowering the value of the dollar further or bulking up the national debt- conditions which would in turn backfire on the very people they’re claiming to want to help.

Meanwhile New York Times columnist Paul Krugman, the economic court jester of the Democratic party, is agitating for a jobs creation plan that does not offer any tax cuts but instead provides aids to local governments to cover their gaps combined with a low paying public works program. Krugman, who favors enlarging the deficit, doesn’t even bother trying to explain how this will be paid for. A variation on Krugman’s reboot of the WPA is a work sharing proposal that would essentially also mean having the government directly subsidize jobs. The problem with both approaches is that they don’t actually involve real job creation, but a dressed up form of public assistance, no fundamentally different than the able bodied welfare recipients who are expected to do some work in exchange for being on the dole.

But it all comes down to government welfare programs, rather than job creation. Job creation involves creating actual private sector jobs, in contrast to the government maintaining artificial jobs which will vanish the moment the funding for them does. Furthermore since the money to fund such job welfare programs will itself help damage the economy further, this is yet another type of job creation plan that will undermine the ability to create genuine jobs. And additionally work sharing drags us closer to socialism, with the government deciding which jobs to subsidize, thus propping up some businesses at the expense of others.

House Speaker Nancy Pelosi meanwhile has gone back to making the argument that the only way to cut the deficit, is by spending more money on job creation programs, never mind the fact that the last stimulus failed to create any actual jobs, but did succeed in bulking up the deficit. This time the plan can’t fail. Pelosi is trying to win back the working class by talking up infrastructure projects, but considering that the last stimulus plan had its infrastructure projects gutted to, in the words of Obama’s economic advisor Robert Reich, avoid giving jobs “to high skilled people who are already professionals or to white male construction workersâ€