The U.S. government has traditionally relied on increased state and local spending to fight recessions, but President Trump’s direct stimulus payments tripled America’s personal savings rate and created “pent-up demand” for a powerful economic recovery.
Fearing that the American public would save instead spend direct stimulus cash, Congress on a bipartisan level has responded to recessionary contractions in personal consumption by funding state and local government “investment” in infrastructure, K–12 education, and social services. But with cash staying in government hands, average U.S. recessions lasted 15 months before personal savings doubled and the economy begins to expand.
California in the Great Recession received $39 billion in direct federal stimulus cash from the “American Recovery and Reinvestment Act of 2009.” But the stimulus mostly offset the state’s $42-billion deficit to make sure that no state employees were terminated. The Golden State also pocketed another $10 billion in federal grants for investment boondoggles, such as the $3.4 billion for high-speed rail that never built any track and $4.6 billion for bankrupt Solyndra and other alternative energy projects.
Read the full story from American Thinker
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