The real cost of the so-called ’stimulus’ bill
February 12th, 2009 by Republican By DefaultThere are two very important facts left out of the calculation that supposedly ends with the $789 Billion price tag on the spending package just passed by congress.
Those facts are:
- Debt financing is not included in that number
- Congress will never cut spending from these levels to the pet projects that were included in it
The Heritage Foundation has more accurate numbers posted on it’s blog. The numbers are based on figures from the Congressional Budget Office.
The true expected cost: $3.27 Trillion dollars. And that’s a preliminary figure based on extending out only 20 of the most popular spending items.
There are some other things to think about when considering just how much these numbers can still rise. Debt financing costs could rise. There are other programs and projects that are not calculated with the assumption that they will never by cut.
Debt financing numbers ($744 B) are based on current rates paid by the US Governmen, mostly for Treasury Bills. However, because the world economy is slowing there will be less money available to borrow, so the government will have to raise the rates that it pays on these instruments to attract investment. The biggest example of this is China, which has been buying up T-Bills for years.
Congratulations Democrat voters. You have just succeeded in saddling the next generation with an impossible debt burden.