BuckeyeBlog

In a recent Hamilton Journal-News editorial, U.S. House Minority Leader John Boehner cited our study about the dangers of the federal stimulus plan: “The Economic Impact of Federal Spending on State Economic Performance: An Ohio Perspective.” In his editorial, Boehner laments our return to the era of big government and the negative consequences of doing so. Job losses, slower economic growth, higher taxes, and a big burden passed on to our children and our children’s children. When will it end? And when will certain policymakers pick up history books and learn from our past mistakes?

The Findlay Courier has a good editorial cautioning the governor to be careful how he spends the federal “stimulus” money:

It seems unlikely that Ohio will pull out of the recession in only two years, so at this point, relying on economic growth to boost state revenues is unrealistic. Thus it makes sense for the state to be extremely careful in how any one-time money is used. Rationally, one-time money should be used for one-time projects, and in our current circumstances, projects that create jobs should be top priority. It also seems justifiable to use some one-time money to extend benefits for the unemployed.

What it should not be used for is projects that involve heavy long-term fiscal commitments, such as welfare and health care expansion, or the governor’s education reform plan. House Democrats are already crafting plans to limit proposed funding increases to schools and phase in the governor’s reforms over 10 years instead of eight. That’s at least a start.

Both political parties say they oppose both tax hikes and cuts in services. But something has to be done to avert catastrophe in the future as well as now.

There is one problem with their analysis — the unemployment funds from the federal government come with a mandate that the state expand benefits in such a way that once federal money runs out, the state will either be forced to pay more into the unemployment insurance system than they do now or cut benefits. This is exactly the sort of funding the state should reject as it sets up long-term problems.

The general theme of the piece is right on, though. This federal money is a one-time deal (more than likely). If it is used to fund programs that, once the money runs out, will be difficult to scale back, then that is a bad thing. If our leaders are short-sighted and merely look at all the goodies they can buy with this “free” money without considering the long-term consequences, then they are poor leaders.

This federal money isn’t free; it comes with a heavy price tag. It’s just that the cost of this money will come due in the future. Here’s hoping that there’s some long-term thinking going on in the governor’s office and the General Assembly.

Intertwining humor and his opposition to the stimulus bill, Minority leader of the House John Boehner brought out the immense stimulus bill and pointed out that not one member of the House had read it. “I don’t know you could read 1,100 pages between midnight and now.” He then dropped the massive heap of government excess on the floor, creating a thud so loud even the White House could hear it.

The stimulus bill has failed on almost all counts so far when it comes to transparency tests. Still, the President is promising we’ll be able to see exactly how and where the money is spent. The administration has set up a website to track the “recovery”, which I suggest watching carefully over the next few months. Every cent deserves to be scrutinized.

Over at Reason magazine, Steven Chapman has a good critique of the current “stimulus” mania:

We all know how we got into this economic mess. We spent too much, borrowed with abandon, and acted like the bills would never come due. So what’s the prescription for getting out? Spending more, borrowing more, and acting like the bills will never come due.

When something sounds too good to be true, it usually is. This alleged cure deserves special scrutiny because it invites our policymakers to redouble the very policies that caused the crisis. Congress and the new administration are all too eager to abandon restraint so that we can overcome the consequences of excess.

Read the whole thing here. Unfortunately, our federal policymakers are unlikely to pass up the opportunity to say they are stimulating the economy (I stress say, since it’s hard to believe their plans will accomplish anything). Why pass up the chance to put out press releases saying that you are working on a fix, even if that “fix” only makes the problem worse?