Study claims stimulus money bad for economy

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By Staff report 5:22 PM Friday, May 1, 2009

An Ohio research institute will release a study Monday in Warren County that claims the release of federal stimulus funds has been damaging to the economy.

The Buckeye Institute for Public Policy Solutions will unveil Monday, May 4, “The Economic Impact of Federal Spending on State Economic Performance: An Ohio Perspective.” The study alledges “the damaging effects higher federal spending has on the nation’s economy” and estimates that an additional 91,000 jobs could be lost in Ohio as a result of the federal “stimulus” bill, according to a release from the institute.

David Hansen, president of the Buckeye Institute for Public Policy; Donna Arduin, principal at Arduin, Laffer & Moore Econometrics; Jonathan Williams, director with American Legislative Exchange Council will make a presentation at the Warren County Administrative Building.

“Just weeks after the federal government approved the largest emergency stimulus bill in U.S. history, local and state governments are struggling with decisions about which projects to fund. Making public officials think twice are some of the nation’s top economists saying it will actually damage the economy – hitting Ohio especially hard with major job losses,” the release reads.

Last week, Warren County’s rejection of stimulus money for its transit system became a national debate.

Warren County commissioner Mike Kilburn said he would rather have the money go to pay down the national debt.

“I was critical of Bush when he supported the bank bailout and the fact he didn’t veto a single budget,” said Kilburn, a staunch conservative. “The fact is, Obama is the man now. No one should be surprised. He’s never run anything, never done a payroll. I’m singling out actions and fiscal policy that will run this country off a cliff.”

Much of the federal “stimulus” spending is not for one-time projects but for new or expanded government programs, such as unemployment insurance. Once this federal money runs out, state and local governments will be forced to pay for these programs, according to the study.

“As this study clearly shows, federal spending isn’t ‘free’ for Ohio,” said Hansen. “In fact, this spending has a very high cost in terms of both taxes and reduced economic activity. While Governor Strickland has been a very visible cheerleader for this federal stimulus package, his efforts will cost Ohio jobs and further worsen our economy’s woes.”

The study was created in cooperation with Arduin, Laffer, & Moore Econometrics in Washington, DC. The Buckeye Institute for Public Policy Solutions is the only nonpartisan research and educational institute devoted to individual liberty, economic freedom, personal responsibility and limited government in Ohio.

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