Tuesday Links
- Cato Vice President Gene Healy grades President Obama. (Hint: He doesn’t give him a “B+”).
- Afghanistan: A war we cannot afford. “Democrats say raise taxes. Republicans say no worries. The best policy would be to scale back America’s international commitments.”
- Doug Bandow: The war in Afghanistan was justified at the beginning, but to escalate now is the “geopolitical equivalent of shutting the barn doors after the horses have fled.”
- How U.S. membership in the World Trade Organization enhances the liberty and prosperity of all Americans.
- Podcast: “TARP: A Congressional Failure” featuring John Samples.
Week in Review: Stimulus, Sarah Palin and a Political Conflict in Honduras
Obama Considering Another Round of Stimulus
With unemployment continuing to climb and the economy struggling along, some lawmakers and pundits are raising the possibility of a second stimulus package at some point in the future. The Cato Institute was strongly opposed to the $787 billion package passed earlier this year, and would oppose additional stimulus packages on the same grounds.
“Once government expands beyond the level of providing core public goods such as the rule of law, there tends to be an inverse relationship between the size of government and economic growth,” argues Cato scholar Daniel J. Mitchell. “Doing more of a bad thing is not a recipe for growth.”
Mitchell narrated a video in January that punctures the myth that bigger government “stimulates” the economy. In short, the stimulus, and all big-spending programs are good for government, but will have negative effects on the economy.
Writing in Forbes, Cato scholar Alan Reynolds weighs in on the failures of stimulus packages at home and abroad:
In reality, the so-called stimulus package was actually just a deferred tax increase of $787 billion plus interest.
Whether we are talking about India, Japan or the U.S., all such unaffordable spending packages have repeatedly been shown to be effective only in severely depressing the value of stocks and bonds (private wealth). To call that result a “stimulus” is semantic double talk, and would be merely silly were it not so dangerous.
In case you’re keeping score, Cato scholars have opposed government spending to boost the economy without regard to the party in power.
For more of Cato’s research on government spending, visit Cato.org/FiscalReality.
Mixed Messages on Swine Flu
The government has taken the sensible step of creating a website to disseminate information on the Swine Flu. There’s even a “Swine Flu & You” section.
Unfortunately, someone forgot to tell Vice President Biden.
On the Today Show, Biden lauded the government’s focus on identified vectors and not on a wholesale closing of the border with Mexico or shutting down commercial airline traffic. Then he contradicted this rational message by saying he “wouldn’t go anywhere in confined places now” and discourages travel by plane, subway, or automobile.
No word on whether this will impact administration plans to use “high-speed rail” to revolutionize transportation in America.

