Contrary to the high-pitch rhetoric in Washington, the ARRA - American Recovery and Reinvestment Act - is not at all a stimulus bill. It does nothing to stimulate the economy. On the contrary, it reinforces a big-government welfare state policy that generates no jobs but makes people even more deeply dependent on government. So if you thought the "stimulus" bill was there to stimulate the economy, think of it instead as a "simulus" bill or the American Radicalism Reinforcement Act.

 

Three examples of what this scam bill does:

 

-More money to Title I school programs. Title I helps low income families put their children through public school. A good program (except charities could do the same job better and more efficiently) that is funded based on how big the population of poor happens to be. But in many states the ARRA almost doubles Title I funds! Does this mean that poverty has suddently doubled? Of course not. What it means is that there will be more bureaucrats with more money chasing something to spend it on. So the states who are responsible for the money will invent new uses of Title I - in effect, redefine the concept of "poor" to fit perhaps twice as many kids as before. A pure expansion of the welfare state, nothing else.

-Expansion of Vocational Training. While superficially this might seem like a good idea with unemployment above eight percent, it is a remarkably stupid idea against the background of academic research. Nowhere have labor market economists been able to prove that vocational training helps people find new jobs faster and more easily than they otherwise would. On the contrary, with the government - not the private sector - dictating what job training people should have, it becomes increasingly difficult to match the work force with available jobs. If instead the administration spared taxpayers the burden of this inefficient idea, the private sector will always match workers with jobs, either through on-the-job training (which, unlike with the U.S. presidency, works well in the hands of private companies) or by market-based vocational programs.

-Environmental/Water way programs. As if the two first examples were not bad enough, the ARRA/Stimulus bill also gives generously to states for the environmental protection of water. Such programs already exist, obviously, and are not exactly job creation machines as they are. With more money in them, all that is going to happen is that environmental restrictions will further rein in the opportunities for land owners to put their lands to commercial use, and for private businesses to grow. In other words, some of the items in the ARRA directly stifle growth while others hardly contribute to growth at all.

 

To top it all off, the ARRA forces states to cough up matching funds, which together takes federal control over state budgets up toward 50 percent. Or, in so many words: the end of state sovereignty is near. And once the stimulus money formally stop coming in 2011 the states will be on their knees begging for more.

 

Behold - the end of a federation through fiscal fiat. And not a single new job will come out of it...