“Stimulus” Costs Continue to Grow

Cost of Government Center ^ | 2012-02-23 | [Staff]

[92nina]

This month CBO has published another report that shows the cost of the “stimulus” package will be more than initially estimated. During consideration of the “Stimulus” bill in 2009 the CBO initially projected an “increase in budget deficits by $787 billion” as a result of the legislation between 2009 and 2019. In August of 2010 the CBO adjusted the anticipated cost from the ‘Stimulus’ to be $814 billion. The last quarterly report increased that estimate to $825 billion. Now the CBO’s report for February 2012 states the actual impact was $831 billion. If this pace is consistent, based on the CBO’s adjustments of their flawed projections, costs for the legislation could realistically reach $1.2 trillion by 2019.

Of course this correction comes as no surprise to CoGC and ATR. Opposing the legislation from its inception, ATR recognized the true burden to the taxpayer would never be fully expressed by government estimates.

What’s more, CBO’s reports systematically misstate the real problem with the “stimulus” bill. At its heart, the solution to our nation’s budget problem must be focused on spending, not reducing the deficit. A focus on deficit reduction opens the door for big government policymakers to clamor for tax increases to fill the budget gap. This distracts from the spending problem while letting the big spenders claim fiscal prudence.

ATR pointed out this misdirection when the Washington Post “Fact Checker” tried to claim the “stimulus” was a success. From that post:

First, Kessler [the Fact Checker] claims that it is false to call the “stimulus” package an $800 billion spending program because the American Recovery and Reinvestment Act also included tax credits that were scored as part of the cost of the bill. This is true – the initial $787 billion bill for the “stimulus” program did contain about $326 billion in tax provisions. However, about one-third of these were refundable tax credits – money redistributed to families in excess of their tax liability. JCT shows that this amounts to $214 billion in actual tax relief. The rest is spending.

It is important also to remember that bloated spending projects like the “stimulus” are paid for with borrowed money. The debt service on the ARRA will amount to roughly $347 billion according to CBO Director Doug Elmendorf. This is actually a far more generous calculation than CBO originally offered – in response to a request from now-Budget Chairman Paul Ryan, CBO estimated that the permanent extension of “stimulus” spending would amount to $744 billion in debt service costs.

Sticking with the more conservative estimates, this brings the cost of the “stimulus” program to nearly $1.2 trillion. It is actually quite generous for any fiscal conservative to argue the plan only amounted to $800 billion in spending.

It is hardly a surprise that each CBO report includes an update on the cost of the “stimulus” package. However, as we point out, each estimate still falls far short of identifying the true spending problem catalyzed by the Recovery Act.

[92nina]

CBO has published yet another report correcting the actual cost of the "Stimulus" bill, with many more likely to come.

Take this article and others I found to the fight to the Libs on their own turf; put the Left on the defensive at Digg and at Reddit and in Stumbleupon and Delicious

[Colonial Warrior]