Economist: more borrowing a wrong way to go

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Economists question the stimulus packageAs President Obama presses Congress to pass a nearly $900 billion stimulus plans, some experts question the fundamental elements of the package.

In particular, the plan for massive new borrowing to stimulate the faltering economy has raised one of the biggest objections on the right side of the economic debate

"President Barack Obama and top congressional democrats are leading the world toward a new global government debt bubble," writes J.D. Foster, a senior fellow at The Heritage Foundation, who believes that this path will only push interest rates higher and the economy into an even deeper recession.

Instead, Foster advocates spending and tax cuts as well as a reduction in entitlements.

Adding nuance to this argument, Jeffrey A. Miron, a senior lecturer in economics at Harvard University, stresses steps such as expanding legal immigration and free trade, withdrawing from Iraq and Afghanistan, and reducing bailouts as the surest way to boost productivity and stop the drain on resources.

In a commentary written for CNN.com, he stops short of calling for spending cuts, opting instead for "elimination of wasteful spending," including agricultural subsidies, ineffective weapons systems, or subsidies for Amtrak and the Post Office.

President Obama’s economic stimulus package contains provisions for multibillion dollar government investment in infrastructure, healthcare, IT technology, and environment.

According to the Congressional Budget Office, U.S. federal budget deficit will rise to a post-WWII record of $1.2 trillion in 2009.
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