More Hope Than Facts In Recovery Hype

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Fanatics exist at every turn, and the most recent example that struck a nerve with me has to do with federal stimulus funding.

Locally, there’s no denying the area has benefited from stimulus dollars. Two sewer plant projects, one in Berlin and the other in West Ocean City, are about to begin in the area, as a result of stimulus dollars, and Coastal Highway in Ocean City is getting some new sidewalks and driveways from federal sources. All of this work, and some other minor projects, are a result of these government injections.

This capital improvement work would have likely not happened so soon if it weren’t for the current administration’s stimulus act. That much we will acknowledge, but we are not willing to sip on the tea some in Washington, DC are serving just yet.

The fact is economic woes continue in a number of industries, specifically those in the automobile, real estate and finance business. There are plenty of numbers to illustrate this point, including the current 9.8 percent unemployment rate, the highest in 26 years.

That fact is puzzling when you consider a recent White House report that said, "employment is estimated to be between 600,000 and 1.1 million higher than it would otherwise have been" because of the Obama administration’s stimulus plan and other government policies, especially the Fed’s monetary expansion,” according to an editorial in The Washington Post. 

The editorial continued, “While no one can prove or disprove that — much less apportion credit between fiscal and monetary policy — basic economics suggests that things might have been even worse if the government had done nothing.  It does not necessarily follow, however, that the economy needs more stimulus now. Government has managed to blunt the recession, but at a cost – a higher national debt burden, which future Americans must pay off by working harder and saving more than they otherwise would have. The real question is whether the benefits of pumping even more government fuel into America’s engine outweigh the risks.”

The stimulus initiative worked in that it kept the economy moving when the country could not afford to stand pat. Economic development projects are underway across the country and that’s giving companies, and subsequently their employees, work they normally would not have had.

The Obama administration and Congress can take some credit for that, but this does not come without some repercussions. We are borrowing from the future to help the present. History tells us that’s the American way in many cases, but it’s not an approach we want to adopt as a creed.

We need to realize people are still not spending the way they were as recent as two years ago. Some stability and a small resurgence on some levels are making a difference. Preliminary numbers show that, but history shows drastic curbs in spending have ripple effects through all aspects of commerce.

Talks of another round of stimulus projects in the capitol are premature and we hope common sense prevails. Tacking more on to the federal deficit under the hopes of short-term recovery is okay to do once but so soon again after the first stimulus effort is a suspicious gamble. Let’s continue to monitor the so-called recovery in the meantime.

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