Fallout: The Financial Crisis

Let’s get expert review of stimulus plan

Marketplace Staff Feb 4, 2009
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Fallout: The Financial Crisis

Let’s get expert review of stimulus plan

Marketplace Staff Feb 4, 2009
HTML EMBED:
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TEXT OF COMMENTARY

KAI RYSSDAL: The president said today we risk — and this is a quote — “catastrophe,” if Congress doesn’t pass his stimulus bill soon. The plan at the moment is to have it ready for him next week.

But with the balance due on the Senate version north of $900 billion and climbing, the political in-fighting’s nowhere near done.

And commentator David Frum says when we’re spending that much money we ought be be taking a closer look.


DAVID FRUM: In his inaugural address, President Obama promised to restore science to its rightful place. This stimulus package working its way toward his desk presents a great opportunity to start.

The Democratic majority in the House of Representatives has voted $819 billion in new spending, ostensibly to fight the economic downturn. Critics and skeptics see the vote as Democratic boondoggling on a galactic scale.

Defenders reply that these critics belong to the party of Herbert Hoover, disregarding the crisis in the name of obsolete ideology.

Economics is not a science, exactly. But it does have enough scientific elements that it might contribute something useful to the debate.

Before the president signs anything, why don’t we assemble a panel of distinguished economists — say, the past half dozen chairs of the Council of Economic Advisers plus all the American Nobel prize winners — to rate the different spending measures in the stimulus package according to how many jobs they will deliver at how much cost?

My guess is that we’ll find that, while a minority of the spending will generate a reasonable return in the form of higher employment and faster growth, the majority of it is waste that will actually harm economic performance by shifting dollars from better to worse uses. But maybe that’s just the kind of cynicism that President Obama deplored in his inaugural address. So, let’s deploy some real expertise.

Then, let’s make use of that expertise and refrain from spending unnecessary money. President Obama reportedly told Republican members of Congress that he does not think there is much waste in the federal budget. Even if he were right about that now — and he’s not — he certainly will not be right after Congress adds another trillion dollars in spending.

That waste will be hard to eliminate once added. It’s easier to suppress before it begins. This is supposed to be a brainy administration. It should not allow its budget policy to be made in the old manner of Tammany Hall. But that’s what we are getting, and we will be sorry.

RYSSDAL: David Frum is a resident fellow at the American Enterprise Institute. His most recent book is called, “Comeback: Conservatism That Can Win Again.”

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