Alison Fraser on Economy |
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This interview is part of the Stimulus Package interview series. Following is an interview by OurBlook with Alison Fraser, director of the Roe Institute for Economic Policy Studies at the Heritage Foundation in Washington, D.C.
 What do you like about the huge stimulus bill signed by President Obama?AF: Frankly, the only good thing about the bill the president signed was that at $787 billion it was smaller than the $838 billion version passed by the Senate. This bill will do very little ... at a very big price ... to strengthen our economy, and given our financial status, it's difficult to find much to like. What don't you like? AF: This is the single most expensive bill ever proposed in American history, and it will result in a massive expansion of federal government power. For instance, rather than helping individuals find gainful employment, it creates new incentives for states to add people to welfare rolls. This reverses the bipartisan and highly successful welfare reforms of 1996 and drastically expands the welfare state. Additionally, it creates a new center for comparative effectiveness, similar to a federal health board which will make determinations on what procedures and treatments are or are not cost effective, eventually becoming the basis for coverage decisions in private and public health care programs. This will make government, rather than doctors and patients, the "decider" of medical choices. In the meantime, none of these measures will actually get our economy back on track, despite the fact that this was supposed to be an economic stimulus. What will be the impact, if any, on bringing our economy back? AF: Zero to negative. The nonpartisan Congressional Budget Office (which is responsible for evaluating the economic impact of all legislation) calculates that this bill will do more harm than good. In the short term, most of the spending will not take effect for a few years, which means the bill is not focused on speedy recovery, and, over the long term, they estimate this will have a negative impact on economic growth and cause our economy to shrink. Is there anything else the government should be doing to help us out of the economic mess we're in? AF: The single greatest long-term challenge we face is spending on the entitlement programs ... Social Security, Medicare and Medicaid. These programs are more than 1/3 of the total federal budget, and their costs will explode to 100 percent of the entire budget as the baby boomers retire over the next few decades. It will be absolutely impossible to get our fiscal house back in order unless we reform these programs. On a personal level, while the D.C. area is perhaps the most recession-resistant in the nation, do you see anything happening there . one of your favorite stores suddenly closing, for example, or friends losing their jobs ... that brings home the larger problem? AF: I have three teen-agers at home, and so this is very personal for me because our profligate ways are saddling them with unsustainable future debt. The stimulus alone created an additional $30,000 in debt for every household in America, and if you add the unfunded obligations of Social Security, Medicare, and Medicaid, that's another half million. For them to be entering the working world and trying to start a career or a family with $530,000 in debt is like giving them a mortgage without the house to go with it. This is very poor stewardship on Congress's part, and it's unfair to future generations, including my children. Is there anything else you would like to say about the economic crisis facing our nation and the world? AF: Like everyone, I am frustrated and nervous about the current economic climate, but I am also hopeful and confident we will recover. I think the real key to recovery is not government or this bill, as most people like to emphasize. It's individuals. Industrious entrepreneurs who start business and create jobs, local leaders who organize civic groups and help civil society thrive, and families that weave the moral fabric of our society are what truly make this country great and prosperous. As long as we ensure that individuals and markets are given the freedom to work, I believe we will emerge stronger than ever from our current economic crisis.
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Comments (2)
  written by jewelrysaga, August 17, 2010
Very classic: hard-working entrepreneurs who start and create employment opportunities, local civic groups and leaders who help organizations of civil society flourish, and weave our family organization, social and moral structure!
written by Trista, July 08, 2010
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