Reason Writers Around Town: Shikha Dalmia on The Progressive Fallacies in Stimulus Talk
President Obama was only regurgitating his party's conventional wisdom when he remarked that the private sector was doing just "fine" -- but the public sector needed stimulating to create jobs and boost economic growth. Why he should get lampooned for something Harry Reid and others have said a million times is unclear. But repetition does not make a stupid idea less stupid, suggests Reason Foundation Senior Analyst Shikha Dalmia in her latest column at The Daily. Obama's statement "manages to pack in virtually every 'progressive' economic fallacy — and then some," she writes:
For starters, his claim that private-sector job growth is hunky-dory is hooey. It is true that private companies have added 4.3 million jobs since February 2010. However, this represents a 2.8 percent rate of job growth compared to the 8 percent average after previous recoveries — despite (or perhaps because of) $800 billion in stimulus spending.
But instead of asking whether the effects of his own policies — like uncertainty over the extension of the Bush tax cuts and the compliance costs of Obamacare — might be choking the private sector, Obama wants to apply his stimulus therapy to the public sector. This won't produce overall growth. Indeed, more government spending means a shrinking private sector, and there are three main reasons why.
Go here to find out what they are.