Should We Slow Down On The Fiscal Stimulus Bill

If not the biggest news of the day, the biggest media event was the Obama meeting with the National Association of Governors. It was a big love-in which shouldn’t come as any surprise when a large group of beggars gets together with the only guy with money in the town.

Carefully scripted as well were the sound bites from Washington about the need to have an economic stimulus bill on the new president’s desk on day one. Trying to act fiscally responsible the Washington contingent carefully limited their proposals to something in the $500 billion range. An opening ante of that magnitude has to have them walking on air.

I’m not going to comment on too many specifics nor will I deny that something needs to be done on the stimulus front but I do want to beg for some honest debate, careful thought and maybe a little self-restraint (good luck there).

Time was when spending money on this order of magnitude was taken seriously and subjected to the constraints that the Founding Fathers built into our system of government. Debate and process calmed the animal spirits and the Senate was the great cauldron in which consensus and compromise produced legislation that, if not perfect, at least was thought through. There is much to be said in favor of considered thought in advance of drastic actions. The argument, always advanced against such a process is that we don’t have the time for such a luxury.

Permit me an aside here. One of the themes of the discourse today, and frankly one which I may have missed earlier, was that a portion of the new fiscal stimulus should be directed towards the burden that medicaid is currently placing on the states. Let’s be clear about one point. Relieving the states of some of their responsibility for medicaid is not in any way fiscal stimulus. It is simply shifting dollars around to unburden them from a program that they and Congress have created. If there is truly an urgent problem then it must be done, but let’s be intellectually honest about what is occurring. In reality, this is simply a preview of the likely pork that is going to get delivered when this ungodly sum is appropriated.

We have a real world example of the consequences of hasty legislation. The TARP program was passed amid a crisis atmosphere and already we have seen the signs of how poorly it was designed. The Detroit bailout promises to be a similar exercise in lax intellectual consideration. I doubt that the new fiscal stimulus bill will fare any better. The problem is that we are dealing with such excessive sums of money that the inevitable mistakes have very real consequences. 

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