Obama’s latest stimulus (AKA “jobs bill”) is more of the same. Raise taxes on the rich to finance popular government hiring—teachers, firefighters, police officers, and construction workers. Unfortunately this stimulus package is fraught with the same four problems as his previous proposals.
First, Obama’s proposal is a classic false choice. If his spending package is so important, then why couldn’t it be financed with cuts in welfare? In reality, his plan is more about reelection than job creation. Support his proposal and you side with education, public safety, and highways. Oppose it and you side with the fat cats. This is class warfare at its finest.
Second, in most instances government spending is less efficient than what comes from the private sector. As we saw with the previous stimulus, Washington’s cash transfer to the states wasn’t always used as it was originally intended. As Obama put it, some of the jobs weren’t as shovel-ready as we thought. There’s no reason to believe that Washington can “create” more jobs by confiscating and spending funds that would otherwise be allocated in the private sector.
Finally, it’s not the responsibility of the federal government to tax residents of one state or community to pay for police officers, firefighters, or teachers in another locale. The same holds true for building bridges and paving roads. States are free to raise their own taxes. Of course, they’d prefer that Washington print more money or incur debt instead. This type of federal-to-state transfer is unconstitutional in my view, but common sense alone should tell us that it’s not the best approach anyway.
Hopefully most Americans will see through Obama’s old wine in new wineskins. We can’t afford any more delusion.