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What is the real cost of the stimulus package?

What is the real cost of the stimulus package?


Kerby Anderson


 


What is the real cost of the stimulus package? Recently I had Peter Ferrara from the Institute for Policy Innovation on my radio program to discuss the items in the package and the impact on our economy. He made news a few weeks ago when he calculated the cost of job creation in this bill. He found that even if you assume President Obama's claims that the package will create or save 3.7 million jobs, the cost would be over $200,000 per job. As he noted, the government could just pay each worker $50,000 a year directly and save lots of money for the taxpayer.


 


It turns out that the $200,000 figure per job is actually too low. If you just count the jobs that would actually be created by the plan, then the cost is closer to $400,000 per job. And remember, that figure assumes that the predictions by the president and Congress are reasonably accurate.


 


Part of the problem is the stimulus package really doesn't have that much in it that would truly stimulate the economy.  Ferrara's article in American Spectrator explains why. There is funding to expand entitlement programs and funding to maintain and even expand many government bureaucracies. And there are lots of benefits going to various constituent groups like ACORN and family planning services.


 


While it is possible that a portion of these spending programs will be pulled out the bill, the fact that they were in the original bill illustrates a stark difference in perspective concerning economic stimulation. Peter Ferrara said: "Reagan created a 25-year economic boom in part by cutting top marginal income tax rates. Liberal Democrats are now going to try to do it by passing out condoms."


 


Lost in all of this is the crushing reality that we may have a federal deficit of $1.5 trillion. That is over 50 percent of the entire federal budget for fiscal 2008. I believe that the public will reject this stimulus package the more they understand its enormous cost and limited benefit.