Well, if you're working in a business, and you're not employed in the government, it's now time to begin making plans to hunker down for a long, grueling, slow-down, courtesy of a government whose members appear not to have the faintest clue about how a real economic system functions. No one is even pretending that the Pelosi pork-barrel express, masquerading as a "stimulus" package, is going to stimulate anything other than Democratic fund-raising. Not even the Congressional Budget Office likes it.
Are my worst fears come true? Has our new President, despite all our high hopes, simply caved in to his party's left-wing? Have we all been duped, after all?
Every serious economist agrees that tax cuts - at least the right kind of tax cuts - are far more stimulative than almost any kind of government spending, even spending on infrastructure. (And the Pelosi bill doesn't even have much of that!) There's virtually no disagreement on this basic principle, although we can quibble with the details.
Transfer payments and entitlements, on the other hand, are generally NOT stimulative, no matter how worthy they often are. We take care of the poor because it's the moral thing to do. But transfer payments don't stimulate net job creation, they simply transfer consumption from one group (the taxpayer) to another (the recipient). That's why we call them "transfer" payments.
Then there are the ANTI-stimulative provisions of this pork-barrel express train. Blocking free trade (as with the Pelosi bill's "buy American" provision) is anti-stimulative. Giving unions more power in the current environment (as Pelosi's bill would) is also anti-stimulative.
What we have here is an unusually difficult economic cycle now in danger of being converted into a genuine depression, in almost exactly the same way the government converted the 1929 crash into a depression. Are there really so few people in the government who understand how an economy works?
If we want to get back on track economically, there's only one way to do it:
Obama, come back to us! YOU won the election, not the 13% approval-rating Congress. So take charge, please!
We just had a terrific, uplifting, inspiring Presidential election. Your President now needs the support of all of us in business. Go to whitehouse.gov to register your dislike of the Pelosi bill, and to encourage a more serious effort to kick our economy back into gear.