Bush Official: Second Stimulus a Bad Idea
Ed Lazear, top economic adviser to former President George W. Bush, is a conservative, free-market economist. While his beliefs may not typically appeal to those on the left, his argument against a second stimulus in today's Wall Street Journal may resonate with most of the political spectrum.
Lazear correctly points out that only $56 billion, or 7 percent of the $787 billion in stimulus funds approved by Congress in February has actually made it out the door, which The Post's Lori Montgomery reported yesterday.
This is a smaller amount even than Bush's tax rebates from last year, which shoveled $80 billion out the door in the form of checks written directly to Americans.
The Congressional Budget Office said it was always known that Obama's stimulus is bell-shaped -- most of the dough won't get to work until next year, when unemployment could be as high as 11 percent, if you believe Warren Buffett's comments from an interview this morning.
One of the reasons the current stimulus has failed to move the needle -- making some Democrats urge for a second one -- Lazear argues, is because -- ironically -- liberal lawmakers are not acting like Keynesians. Liberal economist John Maynard Keynes, who believed that government could spend an economy out of a slump, said that such stimuli need to be heavily front-loaded, which this stimulus is not.
So, in short, the administration and Congress -- Lazear argues -- have pushed through a bad idea (the stimulus) and, to boot, are executing it poorly.
Why would the Democrats in charge of the White House and Congress do such a thing? Lazear says it's because they see this crisis as a chance to push through hard-to-get-rid-of spending programs they've always wanted.
"It may be the case that the country wants more government, that Americans now believe the European model of big government is best," Lazear writes. "That is a decision that society must make. But it should do so with no illusions: The current stimulus and calls for a future one are primarily government growth policies, not strategies to shorten the current recession."
July 9, 2009; 2:31 PM ET
Categories: The Ticker | Tags: Edward Lazear, Obama, stimulus plan
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