Why Government Spending Does Not Stimulate Economic Growth

In a throwback to the 1930s and 1970s, Demo­cratic lawmakers are betting that America's economic ills can be cured by an extraordinary expansion of government. This tired approach has already failed repeatedly in the past year, in which Congress and the President:

1. Increased total federal spending by 11 percent to nearly $3 trillion;

2. Enacted $333 billion in "emergency" spending;

3. Enacted $105 billion in tax rebates; and

4. Pushed the budget deficit to $455 billion in the name of "stimulus."

Every one of these policies failed to increase eco­nomic growth. Now, in addition to passing a $700 bil­lion financial sector rescue package, lawmakers have decided to double down on these failed spending pol­icies by proposing a $300 billion economic stimulus bill. Even though the last $455 billion in Keynesian deficit spending failed to help the economy, lawmak­ers seem to have convinced themselves that the next $300 billion will succeed.