Let’s hear it for another $60 billion infrastructure ‘stimulus’

All projects shovel ready, one would assume – or at least almost ready to be shovel ready:

The legislation would provide an immediate $50 billion investment in America’s roads, bridges and airports, and transit systems and establish a $10 billion national infrastructure bank to leverage private and public capital for longer-term infrastructure projects.

“This legislation will create hundreds of thousands of construction jobs rebuilding our roads, bridges and infrastructure,” said Majority Leader Harry Reid, D-Nev.

The measure would be financed by a 0.7 percentage point surcharge on income over $1 million.

The announcement by Senate Democrats came the day after Republicans scuttled a pared-back jobs measure designed to boost hiring of teachers and first responders.

That plan failed on a 50-50 test vote that fell well short of the 60 needed to break a filibuster. Two Democrats abandoned Obama on the vote and two more who voted with the president said they couldn’t support the underlying Obama plan unless it’s changed.

Some Republicans are getting nervous, believing that voting down Obama’s jobs bill piecemeal in this fashion will backfire with the public. I doubt it. The voters aren’t buying it anymore after nearly a trillion spent on stimulus projects in 2009 and nothing really to show for it.

Obama has shot his wad on “stimulating” the economy with massive handouts to his labor allies. Another $60 billion in wasted money hasn’t a chance of passing, nor will the public hold it against the GOP for opposing the plan.

Look around … Obama’s stimulus worked?

Our Dear Ruler, Barack Obama, has come up with yet another excuse for the current state of our economy. Are you ready for this one? He claims that the current economic slump is “evidence” that his stimulus plan worked … because as the stimulus phases out, local governments are shedding jobs.

Oh my!

* We have the worst unemployment picture since the Great Depression because Obama’s stimulus worked!

* Over two million fewer people are working in private sector jobs in our economy because Obama’s stimulus worked!

* We are still seeing record levels of foreclosures because the stimulus worked!

The only thing that Barack Obama’s stimulus plan is evidence of is that government spending does not foster a climate of economic prosperity, particularly in the private market. The economy does not thrive when the government is making the economic choices.

But it was never Obama’s goal to bolster the private marketplace, but rather to keep union government workers and Democrat office holders afloat. So look around, America … this, what we are experiencing right now, is proof that Barack Obama’s stimulus plan worked!

Obama’s Stimulus was a Fraud

Some folks in ObamaLand are talking about a new stimulus bill. Read on:

Obama’s first stimulus plan cost around $800 billion and change. You are hard pressed to find an economist who will tell you that this $800 billion played any meaningful role in an economic recovery. Remember Dear Ruler telling us that if we didn’t have the stimulus bill unemployment would remain above 9%. Were you paying attention on Friday? Unemployment is still above 9%.

Let me tell you how this stimulus plan was developed. It’s just this simple: Obama comes into office with a mandate to do something to bring us out of the recession and to get people working again. There was a problem though. Obama had no clue what to do. He had no experience he could draw upon to develop a recovery plan. He did have a mindset though, and that mindset was that government is good and the private sector is bad, so whatever was to be done had to strengthen government and involve the private sector only to the degree absolutely necessary. So Obama went to Nancy Pelosi and simply told her to get the Democrat caucus together and instruct them to dust off any and all spending plans they’ve been proposing or considering over the past few years and put them into a giant spending bill. Keep it under one trillion dollars, and we’ll present it to the people as a stimulus bill. Whether or not it really contributes to an economic recovery will be beside the point. The plan will give Democrat members of congress the ability to go to the voters in their home districts with “Look at the money I brought back to our district” newsletters and speeches.

Obama calling for more infrastructure spending

WASHINGTON (AP) – Vowing to find new ways to stimulate the sputtering economy, President Barack Obama will call for long-term investments in the nation’s roads, railways and runways that would cost at least $50 billion.

The infrastructure investments are one part of a package of targeted proposals the White House is expected to announce in hopes of jump-starting the economy ahead of the November election. Obama will outline the infrastructure proposal Monday at a Labor Day event in Milwaukee.

While the proposal calls for investments over six years, the White House said spending would be front-loaded with an initial $50 billion to help create jobs in the near future.

The goals of the infrastructure plan include: rebuilding 150,000 miles of roads; constructing and maintaining 4,000 miles of railways, enough to go coast-to-coast; and rehabilitating or reconstructing 150 miles of airport runways, while also installing a new air navigation system designed to reduce travel times and delays.

Obama will also call for the creation of a permanent infrastructure bank that would focus on funding national and regional infrastructure projects.

Administration officials wouldn’t say what the total cost of the infrastructure investments would be, but did say the initial $50 billion represents a significant percentage. Officials said the White House would consider closing a number of special tax breaks for oil and gas companies to pay for the proposal.

Read more here.

Greek disease in the House

By: Larry Kudlow

One day Team Obama announces a plan for enhanced rescission authority to impound wasteful spending, and the next day the House surfaces a plan for $200 billion in “stimulus” spending on transfer payments for welfare, even more unemployment compensation, still more Medicaid and a bunch of special-interest subsidies.

So are we to believe that President Obama will rescind the excess appropriations? Hardly. And since pay-go is dead, most of this new spending will not be offset. It will add to deficits and debt.

It’s the Greek disease. The welfare state run amok. Right here at home.

And in true class-warfare style, a small portion of the $200 billion is supposed to be offset by jacking up capital-gains taxes for investment partnerships. If passed, this would reduce investment, jobs and economic growth, and enlarge the deficit. Higher spending and investment taxing is a true austerity trap.

This business of raising the tax rate on investment partnerships would be a particularly onerous burden on American entrepreneurs. And it would put this country at a decided disadvantage to our competitors in China and elsewhere in Asia (outside of Japan).

Increasing the tax rate on the investment portion of these partnerships (i.e., the capital gains) would boost the penalty rate from 15 percent to 38 percent — and that includes the Obamacare payroll tax on investment scheduled for 2013.

So, instead of keeping 85 cents on the extra dollar earned from high-risk investment, the House proposal would drop the return to only 62 cents — a whopping 27 percent incentive rollback. And by the same amount, it would raise the cost of new capital, draining investment liquidity from the private sector in order to finance government transfer payments.

Nothing could be worse. This is spread-the-wealth in its most crass form.

And if all that weren’t bad enough, the House proposal would tax the so-called enterprise value of these firms by applying the same penalty-rate structure on the sale of all or part of an investment partnership. In other words, it would make real-estate, venture-capital and private-equity firms the only businesses in the country that are ineligible for long-term capital-gains treatment when they are sold in full or part.

One private-equity partner tells me that this would “tear apart the incentives for innovation that have been at the foundation of American enterprise since 1921, when the capital-gains differential vis-a-vis ordinary personal tax rates was first created.”

Compounding matters, we read in USA Today this week that private-sector personal incomes are at an all-time low, while government benefits as a share of income stand at an all-time high. I believe this is called redistribution.

And then comes a study from the Harvard Business School that states: “Stimulus Surprise: Companies Retrench When Government Spends.” What a shocker. (Hat tip to economist Don Luskin.)

House Democrats apparently don’t read newspapers from Greece or the United States. And they sure don’t read Harvard B-School studies.

Examiner Columnist Larry Kudlow is nationally syndicated by Creators Syndicate.

Read more at the Washington Examiner: http://www.washingtonexaminer.com/opinion/columns/Greek-disease-in-the-House-95119989.html#ixzz0pFxlB7Mp