The Alchemist

       

        In his first news conference after being elected President, Barack Obama stated that his first priority would be a “rescue plan for the middle class that invests in immediate efforts to create jobs and provides relief to families that are watching their paychecks shrink and their life savings disappear. . . . A fiscal stimulus plan that will jump-start economic growth is long overdue - and we should get it done.” Obama’s statement put him firmly in line with the Democratic Congress which has been pressing for a new fiscal stimulus package for months.

         One thing Obama did not mention in his press conference was spending cuts, something that his opponent John McCain made central in his presidential campaign. Indeed, spending cuts move in the exact opposite direction of a fiscal stimulus. Moves to eliminate earmarks were always closely linked to opposition to federal spending levels – although as readers of this blog will realize earmarks make up only a small amount of total federal spending and don’t affect the total level of federal spending. Earmark opponents failed to eliminate them when there was more political support for cutting spending. But now that the tide is flowing strongly in the direction of increased federal spending, there will be even less interest in Congress for eliminating earmarks.