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Stimulus plan sham

By Michael Fumento

There was never doubt that whenever the economy began turning around the Obama administration, and especially the $787 billion stimulus package, would get the credit. They did. The media called stimulus skeptics fools. Obama took credit, so did Christina Romer, chair of President Obama's Council of Economic Advisers.

But in my Investor's Business Daily article, I relate that she boasted of how much the U.S. was spending on stimulus versus European countries, without pointing out there was absolutely no correlation. Thus France spent about a fourth of the percentage of its GDP on stimulus as did the U.S., yet France had 0.3% growth in the last quarter while the U.S. "recovery" comprised a quarter in which our economy shrank by 1%!

This is par for Romer's course. For decades she's held that stimulus plans have little if any benefit on economic recoveries. Suddenly in January she essentially denied that position, saying the stimulus simply had to be big enough and spent fast enough. Then just this month she gave credit for the "recovery" to a stimulus package that hasn't even had time to work and is but a fraction of the money the Fed has been pouring into the economy.

As Tennessee Ernie Ford might have sung: "A whole lot of spending and what did we get? Another year gone by and deeper in debt!"

August 24, 2009 09:01 PM  ·  Economy