The stimulus package President Obama is signing today in Denver is a Trojan horse.
Labeled a bill to help the economy, it is really just an amalgam of the Democratic Party’s spending priorities over the past 30 years with some extra pork barrel items thrown in for seasoning.
It will not — it cannot — have an appreciable impact.
Due to the overwhelming lack of confidence in the current economic situation (only a third believe the stimulus package will do much to help), consumers and businesspeople are going to sit on any cash the package puts into their hands, either saving it or using it to pay down credit card and other debt. It will have the same lack of stimulus as the Bush stimulus passed last year. Without some longer term confidence, government spending will have very little economic impact.
But the package will park lots of money off to the side of the road. And when the economy shows signs of recovery, it will come out of hiding and flood the economy causing huge inflation and kindling an inflationary cycle that can only be halted by a new, government-induced recession as we had in 1980-82.
All of this pain is being caused by Obama’s opportunistic attempt to cash in on our concerns and his political capital to trigger a huge increase in government spending, just for the sake of spending.
© Dick Morris & Eileen McGann