The crumbling facade of "stimulus" success has caused Democrats to reject outright the new tax and spending proposals in the Obama jobs plan, causing a frantic White House to resort back to its usual scare tactics to promote its agenda.
Rather than introspect on the damage the past few years of Obama-Pelosi-Reid have wrought, the President is returning once again to the rhetoric of exigency to push policies that are too unpopular – even amongst his own party – to pass through Congress.
Alleging Republicans have been "unwilling" to act, the President announced today that he will direct the Federal Housing Finance Agency to unilaterally implement new refinancing measures to help homeowners who are underwater on their mortgages. The executive summary is silent on what impact this could have on mortgage bondholders and certainly doesn't comment on the increasing moral hazard of eliminating risk.
We've seen how policy enacted under the guise of emergency has played out before:
- The 2008 Emergency Economic Stabilization Act that created TARP extended $700 billion in taxpayer funds to banks and precipitated much higher costs by enshrining "too big to fail" in the public ethos. Concurrent passage of financial overhauls such as the Dodd-Frank are a direct result of the government overreach represented by TARP. Compliance costs of Dodd-Frank estimated to be $20 billion alone.
The 2009 American Recovery and Reinvestment Act is hailed as a one-time emergency measure to jumpstart the economy, the effects of which will be seen "almost immediately," according the National Economic Council Director Lawrence Summers.
Cost: $1.2 trillion
- The 2009 Omnibus is passed on the heels of the "stimulus," cost taxpayers $410 billion, a $32 billion plus-up for agencies and departments who had just received a massive infusion of "stimulus" cash.
- The 2010 Patient Protection and Affordable Care Act went through all sorts of parliamentary jujitsu to get swept through Congress last year. The urgency of rushing the bill through Congress was most famously edified by Speaker Pelosi herself, who argued Congress must first pass the bill so then taxpayers could see what was in it.
- The abuse of "emergency" spending loopholes spurred $1 trillion in spending in the 111th Congress. Ending the practice of using emergency supplementals could save $853 billion, and that's assuming no other stunts like those mentioned above are attempted in the next decade.
So, given the history of "emergency" spending programs, how well do you think the President's plans that "we can't wait" to pass will spur economic recovery?