Wednesday, January 28, 2009

Unemployed Trojan Horse

ALAN REYNOLDS wonders why most of Congressional stimulus bill is directed toward areas of the economy with little unemployment:
"House Democrats propose to spend $550 billion of their two-year, $825 billion 'stimulus bill' (the rest of it being tax cuts). Most of the spending is unlikely to be timely or temporary. Strangely, most of it is targeted toward sectors of the economy where unemployment is the lowest.

The December unemployment rate was only 2.3% for government workers and 3.8% in education and health. Unemployment rates in manufacturing and construction, by contrast, were 8.3% and 15.2% respectively. Yet 39% of the $550 billion in the bill would go to state and local governments. Another 17.3% would go to health and education -- sectors where relatively secure government jobs are also prevalent.

If the intent of the plan is to alleviate unemployment, why spend over half of the money on sectors where unemployment is lowest?"
Do our fearless leaders in Washington really overlook such details? Or, do they know well what they are doing and assume most of us are not watching? Are our fearless leaders confident they are safe in trying to fool us because most of us choose rational ignorance and/or rational irrationality?


Shay Callahan said...

Dave Ramsey was on Fox News yesterday morning speaking about the "stimulus" package. He suggested that the government offer $20,000 in tax credits to companies that create new jobs. The federal government hopes to create 1.5 to 3 million jobs with this stimulus, at a price tag of trillions after all is said and done. The price tag for the Dave Ramsey tax credits would be a measly $60 billion if 3 million jobs were created. Why doesn't anyone in Congress have this much common sense?

Larry Eubanks said...

Hey, is the proposal a bit like Phelps' low-wage subsidy?