The stimulus, one year in

The Hill today had a story about how Nancy Pelosi is “betting the House” on the
stimulus, essentially saying that her stimulus was so good that Democrats
deserve to be reelected.

That is pretty thin gruel from which to win reelection.

The outlook from economists and from the people is pretty dour when it comes to
the real impact of the stimulus.

I was trading e-mails with my friend Doug Holtz-Eakin, and he pointed out that
if you give credit for all the stimulus spending (which so far is about $260
billion), the amount of gross domestic product is about $268 billion. In other
words, money down a rat-hole.

As Doug also points out, most of the stimulus won’t actually be spent until
2011 and 2012, which means it really wasn’t a stimulus at all, but in reality
just an increase in the budget baseline, from which the Obama administration
can pad the government payroll for years to come.

And the latest polls show that the president’s stimulus isn’t very popular with
the people, either. Fifty-six percent of people questioned in a CNN/Opinion
Research Corp. survey released last month say they oppose the stimulus package,
with 42 percent supporting it.

The biggest problem with the economy is uncertainty about the future. Business
doesn’t know what the Obama administration is up to. Will they raise taxes on
banks and cause them to slow lending to small businesses? Will they increase
EPA regulations to hit some suspect global warming targets and raise prices on
energy? Will they raise taxes on the rich and the poor? Will they succeed in
having the government take over the healthcare industry? Will they give a lot
more power to labor unions, which have already successfully killed the American
auto industry and ruined education in this country? How will they pay off their
trial-lawyer friends?

There is no business certainty, because the Obama administration is just about
all over the place on just about everything. And they are largely unable to get
the Congress to do anything, chiefly because they have both too many votes and
not enough votes.

Republicans have to be careful not to root against the stimulus, though. While
they voted against it and they don’t like how it has been a disaster, they can’t
get into a “I told you so” position. They have to be positive about what they
want to do, without being overly negative about what the Democrats have already
done.

Most voters don’t want to see politicians rooting against anything called a
“jobs bill.” Most voters who are out of work also don’t want to hear grand
theories about macroeconomics. They want practical policies that will create
real jobs.

The Democrats haven’t done that, and that is why they are in big trouble in the
coming election.

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