Son of Stimulus Set to Attack American Economy

Even as the health care debate continues to rage, Democrats have their hearts set on countering their disastrous ratings and the loss of the independent voter by rolling out a job creation package, or Son of Stimulus Plan. There are no clear plans yet, but the ones floating around as preliminary ideas are bad enough on their own. With price tags going as high as 1.2 trillion dollars and various gimmicks being trotted out to hide their cost and avoid blame for inflating the already massive deficit further, the Son of Stimulus is likely to be as big a disaster as its parent.

Take House Democratic leader Steny Hoyer's plan to pay for a job creation plan with a financial transactions tax. Not only would this plan help push investors out of the US stock market, at a time when the market is already in bad shape, but it would weigh down the stock market thereby preventing companies from expanding and going public. Which naturally would crush the very same job creation congressional Democrats claim to want.

After spending taxpayer money to bailout Wall Street, and now that the Dow Jones has hardly passed the 10,000 mark, congress now wants to abort the recovery by taxing Wall Street for their job creating programs. Which will help push the Dow Jones back down and perhaps allow for a second bailout of Wall Street. Which will naturally outrage taxpayers even further, leading to another attempt to tax Wall Street. That is the kind of economy lunacy that governs the thinking of Washington D.C., mixing the worst of socialism and corporate welfare into one indigestible stew.

Hoyer is promising that the bill would include extended unemployment benefits, which is fitting enough since the bill itself would help perpetuate unemployment by killing job growth. That same paradox lies behind virtually all of the Democratic job creation plans, which is that they involve taking money out of the economy, lowering the value of the dollar further or bulking up the national debt- conditions which would in turn backfire on the very people they're claiming to want to help.

Meanwhile New York Times columnist Paul Krugman, the economic court jester of the Democratic party, is agitating for a jobs creation plan that does not offer any tax cuts but instead provides aids to local governments to cover their gaps combined with a low paying public works program. Krugman, who favors enlarging the deficit, doesn't even bother trying to explain how this will be paid for. A variation on Krugman's reboot of the WPA is a work sharing proposal that would essentially also mean having the government directly subsidize jobs. The problem with both approaches is that they don't actually involve real job creation, but a dressed up form of public assistance, no fundamentally different than the able bodied welfare recipients who are expected to do some work in exchange for being on the dole.

But it all comes down to government welfare programs, rather than job creation. Job creation involves creating actual private sector jobs, in contrast to the government maintaining artificial jobs which will vanish the moment the funding for them does. Furthermore since the money to fund such job welfare programs will itself help damage the economy further, this is yet another type of job creation plan that will undermine the ability to create genuine jobs. And additionally work sharing drags us closer to socialism, with the government deciding which jobs to subsidize, thus propping up some businesses at the expense of others.

House Speaker Nancy Pelosi meanwhile has gone back to making the argument that the only way to cut the deficit, is by spending more money on job creation programs, never mind the fact that the last stimulus failed to create any actual jobs, but did succeed in bulking up the deficit. This time the plan can't fail. Pelosi is trying to win back the working class by talking up infrastructure projects, but considering that the last stimulus plan had its infrastructure projects gutted to, in the words of Obama's economic advisor Robert Reich, avoid giving jobs "to high skilled people who are already professionals or to white male construction workers". Instead the money was funneled into more social services spending, which helped lead to the He-Cession. This was in keeping with the ruthlessly partisan approach that characterizes everything the Obama administration does, and mandated that what few jobs there were, would go to Obama's own base. The result has helped lead the backlash among swing voters away from Obama and against the Stimulus Plan.

But Obama and his congressional cronies have no real answer, because their plans are all focused on using government spending as a tool, rather than realizing that government spending is the problem, not the solution. Since most of the job creation plans involve spending more money, the result would not be jobs created, so much as government subsidies and more social services spending that would place a band aid on unemployment, while helping perpetuate the economic conditions that cause unemployment. Tax cuts, damned for their association with the Bush Administration and for running counterintuitive to the socialist premise that government action is the solution, rather than government inaction, are hardly heard from.

There is some talk of a hiring tax credit, but it is not only widely opposed by congressional democrats who are allergic to any talk of tax cuts, but follows the rigid socialist pattern of attempting to tightly control business to get the results they want, rather than understanding that human economic behavior is not a Stalinist puppet show in which you can pull a string and create jobs. A hiring tax credit would certainly create more jobs than anything and everything that Obama has done until now, but that is faint praise at best. Mainly what a hiring tax would accomplish is to allow Obama to take credit for every business that chose to hire a worker and receive a hiring tax credit, regardless of whether or not the business hired a worker because of the credit, or because it needed to hire said worker anyway. A year from now Obama would be able to claim to have saved a million jobs, if the government hands out a million hiring tax credits to every pizzeria that decided it needed to hire an extra delivery boy on weekends.

And above it all, Obama's union backers who helped dictate his auto bailouts and health care plan are breathing down his neck. Union officials will be prominently in place at Obama's jobs summit, which is likely to be an amen chorus backing Son of Stimulus and shaping it into another giant boondoggle of pork and money used to save union featherbedding. But Congressional Democrats have failed to realize that another extension of unemployment benefits and a few hundred billion more lavished on state governments such as California which have created their own financial disasters by kowtowing to unions may make for some cheerful headlines, but will not improve the situation of those same Americans who have turned against them.

Nor will using various gimmicks to hide the cost of the spending by spreading it across different years or pretending to pay for it out of money saved from absolutely nothing, disguise the inevitable fact that Son of Stimulus, by the time it goes through both the House of Representatives and the Senate, will be another monstrous spending plan with nothing to show for it.

Furthermore Pelosi is wrong when she claims that Americans will willingly accept a higher deficit that they will have to pay off, in order to get a few WPA or workshared jobs. Many Americans who have jobs have turned against Obama and Congress because of their fiscal irresponsibility, rather than simply because they haven't gotten their share of the pie. Congress may be incapable of simple math, but millions of Americans who run their own businesses are well aware of the consequences of out of control spending as Democratic politicians act like they have an unlimited American Express card from the Bank of China.

For hacks like Pelosi the only possible reason for public dissatisfaction is because they haven't seen their share of the pork. But Pelosi can't see past her own pork-centered attitude to realize that Americans increasingly want fiscal responsibility from their government, at a time when they themselves have to tighten their belts. Instead what they see is a line of pigs slurping uncontrollably from the trough and on hearing of their anger, they wipe a little of the mud off their faces and offer them a slurp too.

Independent voters who are particularly hard to fit into the interest groups that Democrats are so good at rewarding, are the least likely to fall for Son of Stimulus, and the most likely to be further alienated by a Congress and Administration that shows itself to be completely incapable of changing its ways. It is not a question of pork, but of responsibility and accountability. Obama promised voters the most transparent administration ever, only to provide an administration of czars and a complex tangle clashing figures. The Democrats promised a congress focused on fixing the economy, yet everything they've done has only hurt the economy more. Obama and his spin artists have cynically tried to disguise that by claiming that their deficit spending actually averted a depression, an evidenceless claim, and by bandying about completely fraudulent numbers of jobs saved. What all this adds up to is blatant irresponsibility, the same kind of irresponsibility that the people now in charge in Washington D.C. worked hard to charge Bush and the Republican congress with, only to be found guilty of it themselves by the very people who helped elect them.

As it stands now any jobs creation plan is likely to once again cross the gap between conservative democrats from districts that want to see more fiscal responsibility from the government, up against left wing democrats backed by unions and the Congressional Black Caucus who want to see a Son of Stimulus plan that's even bigger and more wasteful than what came before it, with money directed into social spending, swelling the state and federal bureaucracies and of course subsidizing union jobs. And with Pelosi and Obama at the helm, after some token protests by Democrats from American working class districts, they will probably win.

Obama and Congress think that focusing on jobs is the key to raising their numbers, but while it might bring back some straying Democratic voters, it will not actually save them in the polls, nor will it actually create jobs. That is because the source of the problem cannot become the solution until it recognizes that it is the problem. Obama and Congress are the problem. And while Obama and Congress may be incapable of recognizing that they are the problem, more and more Americans are coming to just that conclusion.