Money

“Facts are stubborn things”.

A report by the Congressional Budget Office found that only about $136 billion of the $355 billion that House leaders want to allocate to infrastructure and other so-called discretionary programs would be spent by Oct. 1, 2010. The rest would come in future years, long after the CBO and other economists predict the recession will have ended.

Of $30 billion in highway spending, less than $4 billion would occur over the next two years. Of $18.5 billion proposed for renewable energy, less than $3 billion would be spent by 2011. And of $14 billion for school construction, less than $7 billion would be spent in the first two years.

Without any new stimulus spending, the annual deficit this year will hit $1.2 trillion dollar.

Even if we agree borrowing $3 billion for renewable energy will help the economy during recession, what about the other $15 billion that will fall outside the recession range? Or even assuming $4 billion for highways will help the economy now, what about the remainig $26 billion? Federal budgets already include provisions for transportation, although the last highway bill, from 2005, topped $280 billion and contained the famous “bridge to nowhere”.

Obama supporters are already twisting reality to fit. Dean Baker actually tries to convince us of the zero cost of the first-two-year spending, by smoothly putting out how these are “projects that might have been worth undertaking even in the absence of a downturn”. So much for fiscal responsibility.

So 25% of the entire $850 billion stimulus package will not be used to stimulate the economy during the recession, that same crisis that Axelrod called “a national emergency when it comes to the economy and that will be our first order of business”.

Just like the Bush administration redefined “torture” to allow its otherwise illegal practices, now the Obama administration seems to redefine “stimulus package” to include provisions for pet projects and personal agendas.

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