Government Stimulus, One Year Later

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Last week marked
the one-year anniversary of the American Reinvestment and Recovery
Act, or the stimulus bill, passing into law. While the debate over
its success has been focused on whether or not it is stimulating
the economy and on various questionable uses of funds, in my estimation
this legislation is accomplishing exactly what it was intended to
accomplish — grow the government.

Those of us
concerned about the ever-increasing level of government debt gasped
at the astonishing $787 billion cost estimates for this bill. True
to form it has actually cost 10 percent more at $862 billion. We
heard over and over that government could not sit around and do
nothing while people lost their jobs and houses. The administration
claimed that unemployment would not go above 8 percent if the stimulus
bill passed. Now, a year later, the government estimates that unemployment
is over 10 percent. The real number is closer to 20 percent. It
appears that those promises were total fabrications in order to
close the deal.

In any case,
the American people know that more government spending obviously
equals more government. If the goal was to strengthen the private
sector, Congress would have allowed businesses and individuals to
keep more of their own money through meaningful tax cuts. Outrageously,
the administration claims that they did “cut taxes” by
reducing withholding, and that they have stimulated the private
economy by increasing the amount of money in every worker’s
paycheck. What they fail to mention is they did not change the total
amount of taxes due. This means that all that money not withheld
from paychecks will add up to a big unpleasant surprise when returns
are filed this year. Many tax preparers are already seeing shocked
taxpayers having to come up with big checks to the government when
they normally expect a refund. Stimulus, indeed!

The administration
also claims that thousands of jobs have been created or saved by
this massive spending bill, but these are just more government jobs,
and counterproductive in the long run. Funding for the public sector
necessarily comes at the expense of an overtaxed private economy.
But, it makes sense that government would seek to expand its payroll
since every new bureaucrat becomes a likely advocate for big government,
when an increasing number of Americans are demanding the opposite.
But the more the burden, the closer the government parasite comes
to killing its host.

Rather than
learning the lessons of the past year, the administration is moving
full-speed ahead to do even more economic damage. With the stimulus
bill set as a precedent and victory declared, another “jobs”
bill is in the works. And, in order to address the unavoidable issues
of our massive deficit, the administration has named a bi-partisan
commission to find ways to decrease it. Tax increases on the middle
class are notoriously back “on the table,” exposing that
campaign promise as another instance of merely saying what the people
wanted to hear. If the obvious solution to our spending problems
was seriously put forth, that is, getting back to the constitutional
limitations of government, I would be shocked. More likely, this
will be a tactic to increase taxes and spending in a way that passes
the political buck.

See
the Ron Paul File

March
1, 2010

Dr. Ron
Paul is a Republican member of Congress from Texas.

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