The Obama administration is still confusing weak economic signals with pleas of the children in Ovaltine commercials. Yesterday, the president announced a new round of stimulus spending targeted toward improving America’s ditch digging infrastructure. The president’s Labor Day speech calling on Congress to invest $50 billion in infrastructure projects is just the latest knot in a string of economic solutions coming from Martha’s Vineyard Washington. In addition to the Labor Day labor package, the Obama administration is also asking Congress to approve $200 billion in tax breaks for businesses, $50 billion in research and development tax credits, and $30 billion in loans for small businesses. The White House, however, is avoiding the politically toxic term “stimulus” and, as The Atlantic points out, is releasing this round of spending in spurts.
A couple thoughts about the Obama administration’s economic arguments:
1). The argument coming from the administration is that the Bush tax cuts are too expensive. Even Ozszag’s two-year extension is dismissed as not palpable. But while Obama maligns Bush’s tax cuts as fiscally unwise, the round of tax cuts and credits proposed by the administration is somehow affordable? This discourse is looking more like a game of “Cuts for your friends are bad, but cuts for my friends are awesome.” Without cutting spending, any tax cut is playing kick-the-can with our debt obligations.
2). Stimulus supporters insist the program was too small to achieve its lofty goals. Despite the little-man syndrome diagnosis, it seems peculiar that anyone who thinks the first stimulus was too small would support a second package that’s even smaller. If the first was too small, wouldn’t this second stimulus be even more useless in terms of helping the economy? I guess you take what you can get, especially since it’d be near impossible for Sisyphus Obama to get a large second stimulus past the Hill.