Not everything that glitters …

Most of the reporting and information from Members of Congress about the recently approved $787 billion federal stimulus bill is how necessary the bill is and how it will help with economic recovery.

Not everyone, obviously, thinks the legislation will be effective or makes sense from a long-term financial health perspective.

Following are a few excerpts from those say the stimulus bill is bad legislation.

• “I think (doing) nothing would have been better,” Ed Yardeni, an investment analyst who’s usually an optimist, said in an interview with McClatchy newspapers. He argued that the plan fails to provide the right incentives to spur spending. “It’s unfocused. That is my problem. It is a lot of money for a lot of nickel-and- dime programs. I would have rather had a lot of money for (promoting purchase of) housing and autos . . . . Most of this plan is really, I think, aimed at stabilizing the situation and helping people get through the recession, rather than getting us out of the recession. They are actually providing less short-term stimulus by cutting back, from what I understand, some of the tax credits.”

• “All this is 25 years of government expansion jammed into one bill and sold as stimulus,” said Brian Riedl, the director of budget analysis for the Heritage Foundation, a conservative policy research group.

• Harvard University economist Martin Feldstein, a former adviser to President Ronald Reagan, was an early supporter of the stimulus bill. He said the compromise falls short of what’s needed. “If the choice is between the current bill and an improved bill, I would say wait and improve the bill,” Feldstein told CNBC on Wednesday after the compromise was announced. Feldstein wanted more incentives for consumers to make big purchases that have ripple effects across the economy. When a car is purchased, it helps not only the carmaker, but its suppliers, the trucking companies and railroads that transport cars, the states that issue license plates and so on.  www.mcclatchydc.com/227/story/62082.html

• Kevin Hassett, director of economic policy studies at the American Enterprise Institute and former senior economist at the Board of Governors of the Federal Reserve System, said Americans’ anticipation of the long-term costs of current policies will offset the effects of the stimulus.

He said many Americans will eventually figure out that what they will owe (or their share of the future tax burden to pay off the large deficit incurred from the stimulus bill) will far exceed what they will get. (See the graph below.)

Hassett, also a former associate professor of economics and finance at the Graduate School of Business of Columbia University, said: “Prudent taxpayers will increase their savings today to prepare for those future taxes, undermining the current effects of the stimulus.”