The American Spectator

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Failed Stimulus

By Joseph Lawler on 9.4.09 @ 10:22AM

If there were one thing that a stimulus package could do effectively, it would be preventing layoffs by state governments. State governments are required to balance their budgets, meaning that in downturns they exacerbate the panic in the private sphere by having to cut public jobs when tax receipts dry up. The federal government, however, facing no balanced-budget restriction, can give the states a countercyclical tool by transferring funds to keep state employees on the payrolls. This disrupts the deadly pro-cyclical effect of state budget shortfalls. Furthermore, it allows for results you can measure: unlike the Obama administration's nebulous "created or saved" metric, states could simply look at their budgets and see how much money they would have had to recoup by firing workers if not for the transfers. Bottom line: any well-planned stimulus package would ensure, before anything else, that state governments didn't shed massive amounts of jobs.

And yet today the Wall Street Journal shows just how quickly panicked states all around the country are laying off or furloughing workers.

Almost makes you think that the Obama administration and Congressional Democrats crafted their stimulus with considerations other than simple economics in mind.