Democrats like to call Republicans “the party of no”. They like to accuse Republicans of having no plans of their own. They insist that doing something is better than doing nothing.
Well as far as the stimulus is concerned, doing nothing would have been better.
“The Obama Administration’s claims of fiscal responsibility are both hypocritical …. [a]nd laughable,” Douglas Holtz-Eakin, who served as director of the Congressional Budget Office (CBO) from 2003 through 2005, wrote in an Oct. 14 memo to Republican members of the House of Representatives.
Holtz-Eakin said in the memo that the hastily written stimulus bill enacted in February–the American Recovery and Reinvestment Act of 2009–was “poorly designed” and that was “probably one of the reasons why we’ve lost 3 million private-sector jobs since it became law.”
“A minority (under $300 billion) of the near trillion-dollar bill cut taxes, and very little cut marginal tax rates,” he said. “The result was no real improvement in economic incentives.”
Holtz-Eakin’s memo was in response to a letter sent to House Republicans on Monday by White House National Economic Council Director Larry Summers. Summers’s letter blamed most of the economy’s ailments on the Bush administration and insisting that the economy is on the upswing. Summers, in turn, was responding to early GOP criticisms of the stimulus.
“We have walked a substantial distance back from the economic abyss and are on the path toward economic recovery,” Summers wrote to House Republicans.
What Summers conveniently forgets to mention is the fact that “under Republicans the deficit never exceeded 3.6 percent of GDP and at the close of fiscal year 2008 the debt-to-GDP ratio was 40 percent,” according to Holtz-Eakin.
“The CBO indicates that under the administration’s plans, the deficit will never fall below 4 percent of GDP and the debt-to-GDP ratio will be 82 percent and spiraling upward,” wrote Holtz-Eakin.