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Wall Street Journal Weighs In on Stimulus Bill

This is from the editorial board at the WSJ. In the blog post that follows, you can read the NY Times Op/Ed about it. They are less harsh, but still not supportive of what came out of the House of Representatives. Its an odd thing when the Journal and the Times are in agreement, particularly when you add in the Congressional Budget Office's concurrence.

My best guess is that President Obama wanted to give Speaker Pelosi the opportunity to reward her party's supporters but that he will work with the Senate to come up with a bill that might actually include the stimulus he has in mind. Then, the Conference Committee can get a final bill ready to send to him for his signature.

Hopefully, anyway. The infrastructure stocks which had been fairly strong based upon the promise of stimulus have tanked with the release of the Pelosi bill which is mostly not stimulus. Jacob's Engineering is down from $48 to $36, or 25%, on the news of the Pelosi bill.

Anyway, you can read both paper's opinions here and in the following post – you can't read the CBO's opinion any longer…Congress had them take it off the web.

Mark

We've looked it over, and even we can't quite believe it. There's $1 billion for Amtrak, the federal railroad that hasn't turned a profit in 40 years; $2 billion for child-care subsidies; $50 million for that great engine of job creation, the National Endowment for the Arts; $400 million for global-warming research and another $2.4 billion for carbon-capture demonstration projects. There's even $650 million on top of the billions already doled out to pay for digital TV conversion coupons.

In selling the plan, President Obama has said this bill will make "dramatic investments to revive our flagging economy." Well, you be the judge. Some $30 billion, or less than 5% of the spending in the bill, is for fixing bridges or other highway projects. There's another $40 billion for broadband and electric grid development, airports and clean water projects that are arguably worthwhile priorities.

Add the roughly $20 billion for business tax cuts, and by our estimate only $90 billion out of $825 billion, or about 12 cents of every $1, is for something that can plausibly be considered a growth stimulus. And even many of these projects aren't likely to help the economy immediately. As Peter Orszag, the President's new budget director, told Congress a year ago, "even those [public works] that are 'on the shelf' generally cannot be undertaken quickly enough to provide timely stimulus to the economy."

Most of the rest of this project spending will go to such things as renewable energy funding ($8 billion) or mass transit ($6 billion) that have a low or negative return on investment. Most urban transit systems are so badly managed that their fares cover less than half of their costs. However, the people who operate these systems belong to public-employee unions that are campaign contributors to . . . guess which party?