I was back-checking some economic facts based on some things that I wanted to blog about. In the process, I came across the following blog post from the Heritage Foundation. I don't monitor this blog, I just came across it in a Google search. But it says almost all of the things that I had wanted to say, so I thought it would be worthwhile to just link to it in this case. Having read it, it didn't make sense to end up restating it.
I think this is really worth a read for understanding the basics of why stimulus fails. Neither the economists that are "newly converted" to spending stimulus or those that were always die-hard fans are, that I have seen, explaining why they claim it will work in the face of contrary historical evidence. It has been tried before and has never worked. I don't think that can be overstated.
What do they call it again when you do the same thing over and over expecting a different result?
As I mentioned in an earlier post's comments, I don't think WWII can be used as a successful case study of fiscal stimulus since there are special factors surrounding a war economy that can't be applied to today's situation.
I should also note that I don't think this means that a discussion as to whether infrastructure projects make sense or not isn't worth having. But I think it should be considered on its own merits and not as part of a stimulus discussion.
The spending portions of the stimulus package will not only be wasteful spending that will increase our national debt (ie. put us further in debt to other nations), but also expands the power of government - which I think we should always be wary of, no matter who's administration it is.