Mon, 16 Feb 2009 21:21:39 +0000 – By John R. Lott, Jr.Author, "Freedomnomics"/Senior Research Scientist, University of Maryland
The stimulus bill had to be passed quickly. President Obama warned that not passing it would result in disaster. He warned that any delay was "inexcusable." The 1,071 page stimulus billhad to be voted on quickly -- so quickly this last week that the House and the Senate couldn't even provide politicians the 48 hours they were supposed to have to read it.
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The legislation was not put up on the Web until 11 PM on February 12 and the House passed it just 12 hours later. The Senate started voting on it only hours after that. Politicianafter politicianadmitted or complained that it was physically impossible to read the bill. As it was, the copies available on the Web for voters had all sorts of hand markingson it that sometimes made it difficult to figure out exactly what the bill proposed.
It was not just the House and Senate rules that were set aside to get this vote through quickly. Promises were broken also. During the presidential campaign, Obama promised voters at least 5 days to study legislation. Obama's presidential campaign Web site claimedthat any earmark should have a written justification as well as "72 hours before they can be approved by the full Senate." Of course, the whole spending bill is at odds with Obama's promise to cut "net" government spending.
But the Democrats had help ramming this through. Three Republican Senators -- Arlen Specter, Olympia Snow, and Susan Collins -- could have voted for more time for debate. It was only with all three of their votes that the Democrats were able to reach the exact 60 votesthey needed Friday to pass the bill. If any one of these three senators had asked for more time to read the bill and allow others to analyze it, they would have gotten it.
Not only did the final "stimulus" bill have major changes from what had been voted on previously by the House and Senate, but the amount of money involved is staggering. With 90 million tax filers who actually pay taxes, the $787 billionmeans the average taxpayer will pay over $8,700.
By itself, adding $8,700 to the average tax bill should get everyone's attention. But that is on top of everything else that we are spending this year. With the stimulus bill, the $700 billion financial bailout (half spent by Bush and half by Obama), and the bailout for the auto companies, this year's deficit is already at about$1.7 trillion-- almost $19,000 per taxpayer. With more possible bailouts for the auto industry and others, that total might rise further.
But the stimulus won't just raise government expenditures for the next two years. The Congressional Budget Office estimates that from 2010 to 2019 government expenditures for just 20 provisions will increaseby almost $2.4 trillion. Assuming a 4.5 percent interest rate, that is the equivalent of about $1.9 trillion today. Adding that to the previous total brings the total to about $40,000 owed per taxpayer.
But that is not all the money that taxpayers are going to be on the hook for. Last week, the Obama administration promised another $2 trillionfor the financial bailout. The decisions that we are making just this year are adding up to $5.6 trillion -- $62,200 per taxpayer. Just to let this sink in -- the amount of money that the government is committing to spend this year is equivalent to the average taxpayer just writing the government a check today for $62,200.
Each one of these expenditures are getting pushed through quickly, but it is all adding up. People have to weigh this against benefits such as the $400 per person tax credit that those who make less than $75,000 per year are going to get under the stimulus.
And that is not the end of the costs that we will face this year. From even more health care reforms to environmental regulation and global warming to even more money for autos and other companies, the bills are going to get bigger. Some costs will temporarily be hidden through borrowing, but others will mean higher immediate taxes and higher product prices.
But the average taxpayer faces a simple question: are they getting $62,200 worth of benefits from all these government expenditures this year? If not, they are going to be poorer. My guess is that most of us are going to be a lot poorer.