Abraham Lincoln once asked an audience how many legs a dog has, if you called the tail a leg? When the audience said “five,” Lincoln corrected them, saying that the answer was four. “The fact that you call a tail a leg does not make it a leg.”
That same principle applies today. The fact that politicians call something a “stimulus” does not make it a stimulus. The fact that they call something a “jobs bill” does not mean there will be more jobs.
So starts Thomas Sowell’s recent opinion titled A stimulus or a sedative? He is the Rose and Milton Friedman senior fellow at the Hoover Institution at Stanford University.
His conclusion is that stimulus jobs are fake and counter-productive. And very costly. As a result the forecast from the General Accounting Office (GAO) for the U.S. budget is both pessimistic and alarming. And this is before the Trillion Dollar health care “reform” has been accounted for.
I quote two paragraphs from GAO’s The Budget and Economic Outlook: Fiscal Years 2010 to 2020.
Accumulating deficits are pushing federal debt to significantly higher levels. CBO projects that total debt will reach $8.8 trillion by the end of 2010. At 60 percent of GDP, that would be the highest level since 1952. Under current laws and policies, CBO’s projections show that level climbing to 67% by 2020. As a result, interest payments on the debt are poised to skyrocket; the government’s spending on net interest will triple between 2010 and 2020, increasing from $207 billion to $723 billion.
Beyond the 10-year projection period, growth of spending for Medicare, Medicaid, and Social Security will speed up from its already rapid rate. To keep federal deficits and debt from reaching levels that would substantially harm the economy, lawmakers would have to significantly increase revenues, decrease projected spending, or enact some combination of the two.
Of course “significantly increase revenues” means “heavy new taxes.”
The future is already “here” for California. In November 2009 California’s Legislative Analyst non-partisan office said “the scale of the deficits is so vast that we know of no way that the Legislature, the Governor, and voters can avoid making additional, very difficult choices about state priorities.”
In light of all these, Honolulu is doing the worst thing possible to prepare for the storm of deficits. It plans to sink several billion dollars on an unproductive rail investment. Since the City administration has lost its marbles about this, it is imperative that fiscally responsible people are elected at both City and State. I look forward to this responsibility at the City level.
‘Panos Prevedouros is a professor of Engineering at the University of Hawaii and a candidate for Honolulu mayor’