There is much talk circulating Washington about the need for a second stimulus package. It seems the logic goes something like this…"The economy was in worse shape than we thought, so the first stimulus package wasn’t enough to pull us out of the recession. We need a second stimulus package if we are going to have a recovery."
Let’s look at the facts, though. The first stimulus package was a record $787 billion. Americans were promised that the original stimulus package would keep unemployment from rising above 8%. The reality, however, is that unemployment has risen to 9.5%, and is still climbing. The main thing the stimulus package accomplished was to create a record budget deficit, and add to the exploding national debt.
Before we throw additional money at the problem, let’s at least consider the possibility that “borrow and spend” isn’t the path to recovery. The reality is that the original stimulus bill was basically a grab bag of big government spending projects, many of which had no prospect of improving the economy. The faltering economy simply served as an excuse to increase spending and increase the size of the federal government.
Many economists believe that the recession will begin to wind down later this year, no matter what the government does regarding a second stimulus bill. Doesn’t it make sense to let the economy recover on its own, rather than increasing the size of the deficit and the national debt in the name of “stimulus”?
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