“There is no disagreement that we need action by our government, a recovery plan that will help jumpstart the economy.” (President-Elect Barack Obama, January 9, 2009)
- “With all due respect Mr. President, that is not true. Notwithstanding reports that all economists are now Keynesians and that we all support a big increase in the burden of government, we do not believe that more government spending is a way to improve economic performance. More government spending by Hoover and Roosevelt did not pull the United States economy out of the Great Depression in the 1930’s. More government spending did not solve Japan’s “lost decade” in the 1990’s. As such, it is a triumph of hope over experience to believe that more government spending will help the U.S. today. To improve the economy, policy makers should focus on reforms that improve impediments to work, saving, investment and production. Lower tax rates and a reduction in the burden of government are the best ways of using fiscal policy to boost growth.”
The statement above was signed by many economics professors, including Joseph Zoric. I asked him why he signed the statement. Here are his thoughts:
“The stimulus bill currently before the Senate should be rejected on both economic and moral grounds. First, this 700 page monstrosity is loaded with pork spending which the president promised us in the campaign that he would never allow. It is really a spending bill rather than a stimulus bill, in that much of the spending is on government itself. Further, prominent macro economists such as Robert Barro and Kevin Murphy as well as Nobel Laureate Gary Becker have calculated that the spending bill will have no positive impact on the economy. In addition, The Congressional Budget Office reported that only 8 percent of the spending would take place this year and only 41 percent in the first two years.
A true stimulus bill would contain measures to encourage production and investment such as across-the-board cuts in marginal income taxes for both individuals and corporations combined with cuts in the capital gains rate and the payroll tax. These are proven methods that have served the economy well in the past but have been ignored by our current law makers in Washington who seem to be more interested in increasing the size of government than in creating a healthy economy.
From a moral perspective, is there any sound reason to support an increase of nearly $1 trillion in the national debt that will add to the already large burden we have placed on future generations? What part of the Constitution of the U.S. gives the U. S. Congress the legal or moral authority to deficit spend today without any regard for the welfare of future generations of taxpayers?”
- Joseph Zoric
- Professor of Economics, MBA Director
- Franciscan University of Steubenville, OH
Copyright © 2008 by Joseph Zoric. This article may not be reproduced in any form without the author’s express written permission. Posted on A&M Blog with Author’s permission.
