CFG Recognizes Worthlessness of Stimulus
It has just occurred to us that our post Tuesday about calamitous predictions for the state budget could have been written another way.
Let's go back to the information from Greg Harkenrider of the state budget office:
"This recession's going to have a hang over no matter how you look at it," said Greg Harkenrider, Deputy Executive Director for the Governor's Office for Economic Analysis in the state budget office. "There's going to be an employment hangover, that's going to be head wind against robust consumption growth."
The panel was told that personal income won't start its rebound in Kentucky until this coming fiscal year and employment won't begin a turn around until 2011. Harkenrider says employment "has been hammered" and improvement will lag behind the country's recovery from a recession.
"We had huge inventories going into the recession," explained Harkenrider. "We're going to have higher sales, without higher production for sometime to beat down inventories, so that's not a good sign for employment."
So in summary:
- Personal income won't start coming back until July.
- Employment won't rebound until 2011.
- Kentucky's recovery will lag the country's.
Let's contrast these ideas with this one from Governor Beshear's stimulus spending website:
Kentucky At Work is the Commonwealth's implementation of the American Recovery and Reinvestment Act (ARRA), signed into law by President Barack Obama and estimated to bring $3 billion in stimulus funding from the federal government to be invested in Kentucky over the next 28 months. ARRA will provide a much-needed, one-time infusion of dollars that will allow us to maintain our jobs and quality of life.
We've mentioned a few times our troubles with the disastrous spending frenzy commonly referred to as the stimulus. The stimulus law was signed in mid-February. It passed the Congress without any of our Representatives reading the legislation because it was too urgent to wait.
Now the economists of the Kentucky state budget office and the consensus forecasting group are admitting what we have known all along: $3 billion of spending on liberal interests does not improve the economy in any significant way.
Let's take this parsing one more step.
Greg Harkenrider is a (very good) economist in the Governor's Budget Office. His realization of the worthlessness of the stimulus is not new. He knew when it was being created, and we have no doubt that the Budget Office briefed the Governor and his senior staff about the impact of the stimulus.
If Governor Beshear knew that the stimulus was nothing more than wasteful spending, why didn't he speak out? If he knew at the beginning of 2007 that all the stimulus would do would increase the national debt, not improve Kentucky's economy, why didn't he stand up for taxpayers?
We know the answer, don't we?
