Free Markets, Free People

The “Stimulus” As Written Means Increased Welfare And Protectionism

The key phrase is “as written”.

The NY Post notes:

Turning back the clock.

Turning back the clock.

Buried deep inside the massive spending orgy that Democrats jammed through the House this week lie five words that could drastically undo two decades of welfare reforms.

The very heart of the widely applauded Welfare Reform Act of 1996 is a cap on the amount of federal cash that can be sent to states each year for welfare payments.

But, thanks to the simple phrase slipped into the legislation, the new “stimulus” bill abolishes the limits on the amount of federal money for the so-called Emergency Fund, which ships welfare cash to states.

“Out of any money in the Treasury of the United States not otherwise appropriated, there are appropriated such sums as are necessary for payment to the Emergency Fund,” Democrats wrote in Section 2101 on Page 354 of the $819 billion bill. In other words, the only limit on welfare payments would be the Treasury itself.

“This re-establishes the welfare state and creates dependency all over the place,” said one startled budget analyst after reading the line.

So the limits on welfare payments, written into law when welfare was reformed, would be lifted. Welfare reform, widely panned when it was first passed, has been very successful in cutting dependency on tax payer dollars. Now, without any need evident, Democrats are attempting to reinstate welfare as we once knew and hated it.

And that means the obvious – more dependency and more government to administer it. It also will mean more taxes.

Then there’s the “Buy American” clause in the stimulus bill. It would require government to be restricted to goods and services produced by US companies.

We can't afford a trade war.

We can't afford a trade war.

Of course that sounds just peachy keen when you first hear it. Our government should buy from American firms if it can. But only if they provide the best services/products at the best price.

But that’s not what is being required. And to the rest of the world, that means protectionism. We don’t take very kindly to protectionism when others do it, so we shouldn’t be particularly surprised when they aren’t any more happy about it than we are.

So the obvious reaction by the rest of the world would most likely be to reciprocate in kind. We would see the same sorts of provisions pop up in countries we trade with.

And not as obvious is the fact that it will end up making the American goods the government is required to buy even more expensive than now.

Protectionism imposes large-scale structural sectoral dislocation, as exporters are ejected from their foreign markets and domestic producers that depend on cheap imported imports suddenly find themselves to no longer be competitive, on top of the global effective demand failure we are already suffering from.

This isn’t progress “as written”. For such a “progressive” administration, it is a return to the 20th century, and in the case of trade, the 19th century.

Hope and change.

~McQ

11 Responses to The “Stimulus” As Written Means Increased Welfare And Protectionism

  • Ah yes. NeoLib noticed that even the NYTimes called it a Trojan horse.

  •  Smoot-Hawley must not ring any bells.   Yes, by all means let’s turn a recession into a depression.  

    These idiots have no idea of the rage simmering in flyover country.  Yes, by all means, raise taxes.  After all, we don’t pay them.   I’m going to stop before I get in trouble.  Let’s just say I don’t wish them well. 

  • My only question is this: how far will the Democrats and The Clown™ go to screw this country? How deep will their efforts go, and what will finally be the trigger that gets people off their backsides to confront and actively oppose this dictator/sc*mbag and his Gang of Thieves presently running this nation?

    Tax cheats, people who helped get pardons for Puerto Rican terrorists, people under a grand jury investigation, and other assorted thugs, pugs, and slugs, all exposed in just the first two weeks of The Reign of The Clown™.

    Is no one else as sickened as I am? Bring back George W. Bush! Heck – even bring back Bill Clinton! At least he was an open thief!

  • Call or write your Senators. Tell them you want no part of the American Recovery and Reinvestment Act of 2009.

  • Well, why not?  We’re providing welfare to banks and planning to provide welfare to the Big Three.  Welfare for the states who can’t manage their own budgets.  Welfare for people who can’t afford their mortgages.  Welfare for everybody!

    Who needs a revolution to establish the dictatorship of the proletariate?  All you need is a stack of applications forms for a government handout and let the people do the rest.

  • This is even wore than I expected.  The house passed its over $800,000,000 monstrosity with travesties like the cost benefit analysis prerequisite for FDA approval that McQ blogged about last week.  Now this.  Obama is a joke.  The Democrat party is an even bigger joke.  The majority of the American electorate is an even bigger joke.  Unfortunately, I don’t know anyone who is even paying atttention to the crap going down in Washington.  The media has hyped the “depression” so thoroughly that most people I know are walking around semi-dazed and distracted from the Obamachinations in Washington.    

  • The protectionism apparent in that is just like the Smoot-Hawley Act of the 30′s which went a long way toward making a recession a depression and into a “Great Depression” and one of the reasons we were the last to recover.

  • Here’s some change you can believe in ….

    A provision in the current “stimulus” bill would allow Hollywood moguls to write off half the production and filming costs of big-budget films and TV shows.

    Backed by Walt Disney and the Motion Picture Association of America, the provision amounts to an estimated $246 million Hollywood tax break over 11 years.

  • Wasn’t global sourcing by the Government without bias towards domestic producers only started a few years ago?  Or was that just the military part of it?