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Even as the US Senate announced tonight a deal to move forward with Obama's porkulus package, the non-partisan (read as Democrat-run) Congressional Budget Office released a report saying that Obama's so-called stimulus package is bound to be "harmful" to the economy. In fact, they said that it would be more harmful than if the government were to just do nothing. Of course, any conservative could have told you that without a study. It's just common sense.
I don't think the Democrat Senate and the Republican Quislings voting with them (Collins, Snowe, Specter) really want our economy to get any better anyway. This crisis is giving them just the excuse they need to seize more power.
Land of the Free and Home of the Brave? If they have their way we'll be the Home of the Freebie and the Land of the Knaves.
From the Washington Times:
President Obama's economic recovery package will actually hurt the economy more in the long run than if he were to do nothing, the nonpartisan Congressional Budget Office said Wednesday.
CBO, the official scorekeepers for legislation, said the House and Senate bills will help in the short term but result in so much government debt that within a few years they would crowd out private investment, actually leading to a lower Gross Domestic Product over the next 10 years than if the government had done nothing.
CBO estimates that by 2019 the Senate legislation would reduce GDP by 0.1 percent to 0.3 percent on net. [The House bill] would have similar long-run effects, CBO said in a letter to Sen. Judd Gregg, New Hampshire Republican, who was tapped by Mr. Obama on Tuesday to be Commerce Secretary.
The House last week passed a bill totaling about $820 billion while the Senate is working on a proposal reaching about $900 billion in spending increases and tax cuts.
But Republicans and some moderate Democrats have balked at the size of the bill and at some of the spending items included in it, arguing they won't produce immediate jobs, which is the stated goal of the bill.
The budget office had previously estimated service the debt due to the new spending could add hundreds of millions of dollars to the cost of the bill -- forcing the crowd-out.
CBOs basic assumption is that, in the long run, each dollar of additional debt crowds out about a third of a dollars worth of private domestic capital, CBO said in its letter.
CBO said there is no crowding out in the short term, so the plan would succeed in boosting growth in 2009 and 2010.
The agency projected the Senate bill would produce between 1.4 percent and 4.1 percent higher growth in 2009 than if there was no action. For 2010, the plan would boost growth by 1.2 percent to 3.6 percent.
CBO did project the bill would create jobs, though by 2011 the effects would be minuscule.
Image courtesy of The Black Sphere
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