Free Markets, Free People
The “Stimulus” As Written Means Increased Welfare And Protectionism
The key phrase is “as written”.
The NY Post notes:
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.
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.