Can someone explain why this is called a "stimulus"

[dude1394]

Shamulus....about right...And it should be killed immediately.

http://www.ibdeditorials.com/IBDArti...1&show=1&rss=1

As Stimulus Fails, It's Time For Plan B

By INVESTOR'S BUSINESS DAILY | Posted Friday, June 05, 2009 4:20 PM PT
Economy: Businesses shed another 345,000 jobs in May, about half the number expected. Meanwhile, the stock market has risen in 12 of the last 13 weeks. It looks like the "green shoots" are here — no thanks to the stimulus.
Read More: Economy

As we've been saying for months, the economy was due to turn around — with or without the stimulus package that was passed Feb. 17 amid much hoopla.

Recall that, at the time, the main selling point for the $787 billion stimulus package was that it would rapidly inject massive amounts of money into the economy through thousands of "shovel ready" projects just waiting to start up.

Nothing of the sort has happened. It's been a slow, grinding, bureaucratic mess, with few results.
So far, just $43 billion in stimulus money has been spent. As we've noted, that's nothing in a $14 trillion economy, and certainly not enough to account for the modest signs of recovery we're seeing.

The official government Web site, recovery.gov, said right after the stimulus was passed that it "will save or create good jobs immediately." And the chief White House economist in January predicted that unemployment would top out at 8% if the stimulus were passed. Well, we've lost 1.5 million jobs since the package was signed, while unemployment has hit 9.4%, a 25-year high. Enough said.

Weirdly, the White House on Friday announced tentative plans to appoint a "jobs czar" to oversee pay at companies taking bailout money. Shouldn't you wait until some jobs are actually created before creating a czar to monitor pay? Or is this just another attempt at controlling the private sector?

In a word, Washington's "stimulus" is a sham. It's a shamulus. It's as big a fraud as any perpetrated in recent years, cynically passed to take advantage of Americans during a time of economic panic and fear. Worse, it was falsely sold as stimulus when in fact it was a permanent expansion in government spending.

Within two years, federal spending as a share of GDP will have risen from its long-term postwar average of 20% to 22%. But that's nothing. Within 30 years, according to some estimates, that share will double to more than 40% as the baby boomers retire by the tens of millions, making new demands on the public fisc.

Right now, the economy appears to be modestly on the mend. May's shrinking job losses are just another indicator. It looks unlikely, however, that we'll have the kind of robust recovery that typically follows a sharp downturn, like the one we've had.

The U.S. government has pulled off an economic version of shock and awe, taking over major industrial companies, seizing control of banks, printing trillions of potentially inflationary dollars, bailing out failed enterprises, and threatening to impose trillions of dollars in new taxes on workers and businesses in the coming years.

All this destroys what John Maynard Keynes called the "animal spirits" of the economy. It's exactly why we face the prospect of a slow recovery — one that might just be the slowest on record since World War II. Instead of the steady 3%-plus long-term GDP growth that the Fed forecast just a few years ago, many economists — including the Fed's — now think GDP growth will be more like 2%.

It's time to recognize the stark reality and change course. Fast.

The stimulus hasn't worked, and it won't. It should be killed off. Just throw it in the garbage, and apply the remaining $700 billion or so to cutting the expected $1.8 trillion deficit this year. Or to cutting taxes across the board. Either would be better than "stimulus."

Meanwhile, to improve our long-term growth rate — which will make us all richer, and even ease the government's fiscal strains — there are lots of things that we could do. Here are just a few:

• Free trade. Immediately approve free trade deals pending with Colombia, Panama and South Korea. This would give U.S. firms billions in new orders and create thousands of new jobs — right away.

• Tort reform. Rampant lawsuits cost this country an estimated $600 billion to $800 billion a year, or about 5% of GDP a year. Trimming this back even a little bit would yield big results.

• Regulatory reform. Wayne Crews of the Cato Institute estimates that U.S. consumers and businesses pay $1 trillion or more for our regulations. Even modest deregulation could potentially yield hundreds of billions in benefits.

• Tax cuts. Current budget plans already see a nearly $1 trillion tax hike over the next decade to help pay for ambitious spending plans. Other tax hikes — a cap-and-trade tax, a health care tax and a European-style value-added tax of 10% — loom as very real possibilities. These will sink the economy. Cut taxes across the board instead, sit back and watch the economy grow.

We have lots of other ideas that we'll be discussing in coming weeks. The point is, we don't have to sit on our hands and wait for things to get worse. We know what works. Let's get cracking, before we do serious damage to our economy and standard of living.