This is a class blog for the students of POLSCI 426: Congressional Politics at the University of Wisconsin–Milwaukee.
Stimulus hurts economy in long-run
Taken directly from a letter from the Congressional Budget Office to the Senators, this shows that that the stimulus bill may help increase employment and GDP in the next two years, but will eventually weaken the economy afterward. This is a little stunning since in two years President Obama and many other Congressional representatives will be gearing up for re-elections. It would not look too favorable for them if the economy is starting to sink again during that time.
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2 comments:
I have heard that argument made before. One of the main concerns I hear exercised is that the job creation will only be sort term. Any "shovel ready" projects will help for the next few years, but after said projects are complete, there is no plan in place to sustain those jobs that were either created or saved.
There are many economic theories as to whether or not this stimulus plan will be effective. It is more than certain that this one time flux of stimulus will not be enough, and more action will be needed in the long run, perhaps within the next four years. As for the argument from the other side of the aisle pertaining to the "pork" that exists in the bill, I would have to hope that this dire economic situation is rather sobering enough for Congress, and that all the spending goes toward projects that the honestly believe will help the economy. Whether or not you agree with where the spending is going to, you have to hope that there is real belief that it will work, and it is not wasteful spending. Of course, Republicans will always claim that it is a pet project bill, and are banking on its failure for their own political success.
The only judge for whether this project works or not will be time.
I think what is most striking about the report is that it is true that we don’t have many cases of large stimulus packages in response to a struggling economy. The lack of cases presents a major problem in predicting short-term and long term. Also notable is the fact that there will be large job creation, this report suggests nearly full Where is the labor force, which is essential going to come from or rather how willl it be maintained. I think that the report failed to adress the problem of illegal immigrants status and how that is also relevant to the economy.
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