Failing at Bailing ; Government Spending Drains the Private Sector

Summary

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Last January, a report by White House economists predicted the $787 billion stimulus would create (not just save) 3.3 million net jobs. Since then, 3.4 million net jobs have been lost, pushing unemployment over 10 percent. And now the White House concedes that by next summer the stimulus will be "contributing little to further growth."

By the White House's own standards, the stimulus failed.

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Failing at Bailing ; Government Spending Drains the Private Sector

Its central flaw? It was based on the myth that government spending is a free lunch.

Stimulus advocates assert that government spending injects new dollars into the economy, thereby increasing demand and spurring econ...

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