September 7 2010
More Deficit Spending Isn't Going to Fix This Economy
In 2009, we were assured that the first stimulus (which totaled in the neighborhood of $800 billion) was going to be used on "shovel-ready" infrastructure projects, which would stimulate demand, create jobs, and help turn this economy around. More than a year later, it's clear that this hasn't panned out. Growth is sluggish, unemployment is still high, and even businesses flush with cash are reticent to hire or expand since they don't know what the economic climate will be in the months to come.
It seems impossible to imagine that a new $50 billion for infrastructure spending-that's small potatoes compared to the first round of stimulus spending- will yield any meaningful results in terms of improving our economic prospects. In fact, it seems a safer bet that the new stimulus simply add to our already alarming deficit and to nation's sense of desperation, which will further undermine our economic prospects.
More deficit spending will not turn this economy around. Washington should focus on providing businesses with the certainty they need to invest, expand, and hire. Policymakers need to assure the private sector that taxes aren't going to go up and squeeze their budgets even more. Instead of throwing more taxpayer money at projects of questionable value, policymakers should try to cut wasteful spending to reassure the financial world that the U.S. is serious about fiscal responsibility. Instead of toying with additional regulations and adding burdens to businesses, Congress should focus on making it easier for companies to hire.
There are better ways than more infrastructure spending for Congress to use billions-or better yet, they should not spend it at all.