Baker Institute Student Forum debate: America's stimulus legislation

By Anthony Lauriello     1/13/11 6:00pm

At its signing, The American Recovery and Reinvestment Act legislators hailed the bill as the Keynesian fiscal stimulus needed to cure the recession. Yet more than a year after the Obama White House signed this "economic Viagra" into law, the economy remains as flaccid and slow-moving as ever. Furthermore, the law represents an unwelcome and dangerous intrusion of government and has plunged our deficit into staggering and unprecedented depths.Apologists of the stimulus have two main arguments, the first being that we are technically now out of the recession. This is indeed true, but the slow and sluggish recovery hardly amounts to any sort of success. Rather, the dangerous tide of unemployment remains unstopped. The current rate of ?9.6 percent could even go over 10 percent. Sanguine projections about the health of the economy mean nothing to the millions of Americans out of work.

Second, supporters say the bill prevented catastrophic disaster. However, the economic collapse was due to the freezing of money and assets as investors speculated on which bank would fail next. The TARP bill passed during the twilight of the Bush administration shored up the behemoth financial institutions and hemorrhaged the bleeding as capital began to thaw. There is no concrete proof the stimulus did anything to prevent a further slowdown in the general economy.

What the bill has done is allowed the public sector to reach its dark and dreaded claws further into the free market. While it is not incredibly difficult to involve the government with sectors of the economy, it's almost impossible to get Washington to cede control. As one example, the bill promotes many projects, which involve the government directly in the energy sector by subsidizing technology like solar panels that are proven ineffective and prohibitively expensive. By putting the "green movement" under government control, we lose the dynamism and spark to create a true and economically viable answer to our energy demands.

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Finally, we shouldn't lose sight of the bill's price tag. As taxpayers, we cannot accept the government going further into debt and sparking an interest payment cycle that could ruin the nation's future. $787 billion is an incredible amount of money. It's larger than many developing nations' GDPs and most economists believe that Scrooge McDuck would drown if he attempted to swim in it. With an amount so large, one would have expected positive results. So far all we have gotten is more unemployment, a few solar panels and a lot ?more debt.

Anthony Lauriello is a Wiess College sophomore.

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