Saturday, September 10, 2011

Breaking down Obama's "jobs" plan (stimulus)

1. An "Absolute Moron's Guide."

2. A smart person's assessment.

Here are some highlights from that second link (by Megan McArdle):

The infrastructure stuff will be fine, if we choose good projects--America needs roads and airports and so forth. But as we discovered with the previous round, the better the project, the worse the stimulus. There are no terrific infrastructure projects sitting around, waiting to break ground next week . . . nay, not even if we streamline the regulatory red tape.

For that matter I'm not even sure that the president has the authority to streamline most of that red tape, and I'm highly skeptical that Congress is going to get busy undoing several decades worth of environmental and anti-corruption protections. So most of that $100 billion is not going to be spent next year--presumably, even the school rehab is going to have to wait until summer, when what we need is jobs right now. . . .
She also points out that Obama hasn't proposed any way to pay for the plan. She quotes from Obama's speech:
The agreement we passed in July will cut government spending by about $1 trillion over the next ten years. It also charges this Congress to come up with an additional $1.5 trillion in savings by Christmas. Tonight, I'm asking you to increase that amount so that it covers the full cost of the American Jobs Act. And a week from Monday, I'll be releasing a more ambitious deficit plan -- a plan that will not only cover the cost of this jobs bill, but stabilize our debt in the long run.
Then she quotes a Twitter post, summing up Obama's message to Congress:
"Here's the deal: I take credit for the new spending now; you take credit for making politically unpopular cuts later."
McArdle adds:
This is becoming a signature move for Obama. . . .

But it's hardly been a rousing success when Democrats tried to maneuver the Republicans into putting their sticky little fingerprints all over the unpopular parts of their plans while taking credit for the successes, which is what this boils down to. During the speech, Justin Wolfers tweeted to the effect that the GOP wouldn't dare vote against these hard-to-dislike provisions. I take it that this sentiment is common among liberals, who expressed approval that Obama was finally taking it to Republicans.

I'm less sure. For one thing, they've got a legitimate critique: it isn't paid for. Of course, if you want more stimulus, you don't want it to be paid for next year . . . but it isn't paid for at all. Select committees are turning into the Laffer Curve of the left: every time you want more money to pay for something, assign a committee to make unspecified cuts years in the future.

Republican complaints that the spending will happen and the pay-fors won't aren't unreasonable, and I suspect they'll get some traction with independents.