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Second stimulus? No thanks
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The stimulus/recovery plan passed earlier this year has, thus far, not had the desired effect. Unemployment numbers have exceeded estimates and the economy is still stuck in the mud. Now there is talk of a second stimulus plan. At this point it's just a trial balloon. Vice President Biden said in an interview with ABC News, when asked if a second stimulus is needed "I think it's premature to make that judgment."
The fact that it's being discussed means the administration is testing the political waters on this issue. They've already put out a pre-emptive justification. Biden suggested that the Bush administration is still responsible for our current situation. The Obama administration simply misread how bad an economy they had inherited.
So what would a second stimulus plan look like? Ideally it would be something like an elimination of the capital gains tax along with the announcement of major cuts in government spending. Much more likely, it will contain grants and gifts for those "friends of Congress" who missed out on round one. This Congress and administration has only one plan; spend, spend, spend. Their surrogates in pundit world put out the same message. In fact, they believe that it doesn't even matter what the money is spent on, as long as it gets circulating. Japan disproved this notion over the past decade. They spent a lot of money paying people to dig holes and fill them back in, to no avail. All it created was more debt.
The backdrop for "stimulus 2" is an $11 trillion debt, cap and trade on the verge of becoming reality, Congress racing to pass a huge new government spending plan in the form of health care reform and unemployment at 9.5%. We don't need just another bill. We need a whole new strategy. Making the government bigger and more pervasive is the wrong way to go. This is counter to the current strategy of spend more, spend faster. I don't believe the current management in D.C. is suddenly going to see the light and reverse course. The best we can hope for is that the political climate and objections from the public at large keep the government from doing anything anytime soon.
