Monday, July 20, 2009

Please, not another 'stimulus'

By Richard Eckstrom
Comptroller General

I was among those who felt strongly that President Obama’s “stimulus” bill wasn’t the way to get our economy back on track. Hundreds of billions of dollars of new spending on government programs seems to be stimulating government growth, but much of it has nothing to do with stimulating the economy.

Let’s not forget, there is no money for any of this. This “stimulus” package is being financed with funds that have been borrowed from foreign countries, and the resulting debt is falling on our children and grandchildren to repay.

The President promised the stimulus would “save or create” 3.5 million jobs -- a promise rightly questioned by economists who suggested the impact was being over-hyped in order to sell his idea to the American public. The President also called on Congress to approve it immediately, shutting down Congressional debate, a move he insisted was urgently needed to keep the unemployment rate below eight percent.

Yet since that time our national unemployment rate has ballooned from 7.9 percent to 9.5 percent -- a 26-year high -- and we recently learned that 467,000 more U.S. jobs were lost during June. There’s simply no reliable evidence that the stimulus has “saved or created” jobs.

On Sunday, July 5th, White House officials conceded they had “misread” how bad the economy was. Left unspoken was whether they had also “misread” the impact of the stimulus.

Now some Washington officials are talking of yet another stimulus package
As the state’s “stimulus watchdog,” I’ve devoted my efforts in recent months to tracking the federal stimulus dollars that come into South Carolina, to reduce opportunities for waste and mismanagement and to ensure the money is used as intended. It’s a job I try to carry out regardless of my personal feelings on the stimulus. But as a CPA and one of the state’s top financial officers, I’m convinced that the policy of continuing to spend money we don’t have -- and saddling future generations with tremendous debt -- is making things worse.

The White House promised that the economy would begin improving within weeks of the stimulus bill being passed last winter. Instead, it has committed billions for government programs, while the economy is no better off for it. If the White House and Congress seek to increase spending in the face of record deficits and continue to grow government, they should admit it. They should not try to justify their runaway spending under the pretense of economic recovery.


sisc said...

shortage of doctors and lower quality of medicine is the future I see if Obama's health care reform gets passed.

Anonymous said...

Why, O why, don't those bozos in government (both State and Federal) understand this. Not to slight your intelligence, sir, but what you are saying is really simply Economics 101. I guess it must take courage to stand up and say the obvious, when all those idiots have convinced the media that all this stimulus money is going to save our Republic.

Gene said...

That's great, we get it that you didn't support the Stimulus and god knows you won't stop beating the drum. As a CPA and one of our state's top financial officers, what specifically would you suggest be done to help lower our state's unemployment rate? Do you have any direction for SC any wisdom to share in regards to making it better?

Saying you'll work to "cut waste" doesn't cut it, that's a no brainer and not only a Republican thing...

Richard Eckstrom said...


Thanks for asking!

There are at least two alternatives to the current stimulus I think could lower our state's unemployment rate:

1) enact a stimulus of tax reductions, which previously have proven to stimulate economic activity (under presidents Kennedy and Reagan);

2) enact a tax reduction and public-works-only stimulus, i.e. roads and bridges without spending for things like the special mouse habitat in San Francisco;

The current stimulus simply didn't work as it was advertised, as the unemployment rate has soared past the 8 percent benchmark set by the White House.

Rather than enacting a second stimulus, we'd do well to re-engineer the current one; scrap what hasn't been spent and do it right, with policies that will put money in the hands of consumers and spending that will get into the economy immediately.