Obama’s New Deal: A Bad Deal for Americans?

President-electObama recently announced a 21st Century New Deal. He plans to quicklyspend billions on make-work projects in an effort to stimulate theeconomy. As we have reported earlier, his nominee for Director of theOffice of Management and Budget apparently disagrees with this kind ofattempt to stimulate the economy. But Obama is undaunted in recklesslyspending taxpayer dollars. For example, here’s what he said aboutenergy:

"[W]e will launch a massive effortto make public buildings more energy-efficient. Our government now paysthe highest energy bill in the world. We need to change that. We needto upgrade our federal buildings by replacing old heating systems andinstalling efficient light bulbs. That won’t just save you, theAmerican taxpayer, billions of dollars each year. It will put peopleback to work."

Do you feel replacing light bulbs in federal buildings is theright kind of stimulus the economy needs right now? 

Thefederal government should spend money to "replace old heating systemsand install efficient light bulbs" only if the projects make economicsense and not merely as make-work projects. When families andsuccessful companies consider upgrading heating and lighting systems,they are forced to compare the costs to the energy-savings benefits.This cost-benefit analysis is key to funding these projects. Before anObama administration spends money on make-work projects, it should makesure that there are net benefits.

If the Obama Administration spends billions of dollars replacing lightbulbs in federal buildings, this will certainly create jobs inparticular sectors, especially for fluorescent light bulb producers andthe workers who install them.

Butat the same time, Obama’s proposals would destroy jobs in otherindustries because the money has to come from somewhere. Obama’s "NewDeal" will raise its money through one ofthree methods: (a) increased taxes, (b) increased deficit spending,and/or (c) printing new money through the Federal Reserve. No matterwhich method is used, the result will be reduced output and fewer jobsin the private sector.

Do you feel replacing light bulbs in federal buildings is theright kind of stimulus the economy needs right now?  What should the newadministration be concentrating on?


Let us know what you think by commenting down below.

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