House and Senate agreeing on Stimulus package

Posted by Arkady K. On 2/12/2009

Congressional committee talks have resulted in what appears to be a deal reached between the two legislative bodies. The price tags keeps fluctuating between 780B and 834B and as of now it seems like it's on the lower end of the spectrum. Differences that amount to 5% of the total package are not serious enough to sway one's opinion, however what the actual bill contains seems to be different than the original House passed bill.

Because the actual provisions are still being ironed out and the possibilities of additional amendments being added still exists I will refrain from going over the recently added items. Fundamentally the original problem with the bill still remains, there is a significant lack of anything really stimulative. Even if we account for the expanded shovel ready money from 30 to 45+ billion, the impact is negligible. Tax cuts are still not existent and and as previously highlighted, tax rebates and an AMT patch are nothing new. In fact the rebate checks will not come in the form of one paycheck, but will be distributed through payroll such that most individuals will see $15-30 dollars added to their paychecks. I don't think this will have any kind of impact on the consumption what so ever, looks like a feeble Keynesian attempt destined to fail.

The big winner as of now clearly seems to be the department of education receiving by far the most ranging from special education to administrative costs. Why that department exists despite the failure of public education is beyond me and why do people assume that throwing additional funds is some kind of panacea? Just how much longer can this madness continue and I will spare you the tired old cliches defining insanity.

Stay tuned for further updates on this slab of pork.
"It is no crime to be ignorant of economics, which is, after all, a specialized discipline and one that most people consider to be a ‘dismal science.’ But it is totally irresponsible to have a loud and vociferous opinion on economic subjects while remaining in this state of ignorance.” - M. Rothbard