Obama's economic plan boosts government slows economy

[Melissa K]

Jim Brown - OneNewsNow - 1/15/2009 7:00:00 AMBookmark and Share


Obama moneyA top expert on tax reform is decrying the massive redistribution of national income entailed in Barack Obama's economic recovery plan.



The seven-million-plus poor Americans who are elderly, blind, or disabled and receive monthly welfare checks could reportedly get an extra Supplemental Security Income (SSI) payment as part of the president-elect's $800-billion economic stimulus plan. The one-time additional SSI payment would cost an estimated $4 billion.

Dan Mitchell, a senior fellow at the Cato Institute in Washington, DC, says having the government borrow money and then redistribute it does not help our economy grow faster, but instead simply makes government bigger.

"If we look at high-tax welfare states like France and Germany, where living standards are much lower than they are in America, unemployment is much higher, [and] the economies are much less dynamic, I'm actually concerned that this so-called 'stimulus' that the politicians are hatching in Washington is going to make our economy weaker in the long-run and perhaps even in the short-run," he admits.

In addition, Mitchell is troubled that the Obama stimulus also will likely provide at least $70 billion over the next two years to help states meet the demand for Medicaid. He says if there was one group in the country that does not deserve any handouts, it would be state and local politicians who are profligate spenders.

Dan Mitchell (Cato)"Certainly in recent years -- whether they be Republicans like Schwarzenegger in California or Democrats like [John] Corzine in New Jersey -- they've been increasing state spending at two, three, sometimes four times the rate of inflation," he concludes. "And now that they've spent themselves into a fiscal hole, they're saying, 'Oh, we want Uncle Sam to bail us out' -- which means, of course, taxpayers like you and me [and everyone else]."