The fantasy on the left is, government spending can stimulate growth. The problem is, where does the government get the money from ? It may borrow the money from China, or print the money, but eventually we the people pay. Brian Riedl explains in this nice piece, why government spending of our money does not produce the economic growth it expects to get : http://www.heritage.org/research/reports/2010/01/why-government-spending-does-not-stimulate-economic-growth-answering-the-critics
During the 1930s, New Deal lawmakers doubled federal spending--yet unemployment remained above 20 percent until World War II.
Japan responded to a 1990 recession by passing 10 stimulus spending bills over 8 years (building the largest national debt in the industrialized world)--yet its economy remained stagnant.
In 2001, President Bush responded to a recession by "injecting" tax rebates into the economy. The economy did not respond until two years later, when tax rate reductions were implemented.
In 2008, President Bush tried to head off the current recession with another round of tax rebates. The recession continued to worsen.
Now, the most recent $787 billion stimulus bill was intended to keep the unemployment rate from exceeding 8 percent. In November, it topped 10 percent.
Despite the evidence to the contrary, and a failure of the $850 billion first stimulus to keep unemployment below 8 %, Obama wants to try $400+ billion more. Stimulus is a bad word, so he calls it a jobs bill. Victor Hanson begs to differ : http://www.investors.com/NewsAndAnalysis/Article/582835/201108251901/Still-Seduced-By-A-Fallacy-We-Havent-Spent-Enough.aspx
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