Somewhere between 75% and 85% of Americans believe the United States is on the wrong track. And if the polls are any indication, Democrats will be elected in large numbers promising a stark “change” in policy. But Americans are in for a rude awakening: Much of the economic stimulus ideas being pushed by the left have already been tried, and have already failed.

Barack Obama has proposed new deficit spending of at least $150 billion and Speaker Nancy Pelosi (D-CA) wants closer to $300 billion. This cash is slated for spending on infrastructure, expanded unemployment benefits, bailouts for spendthrift cities and states, home heating subsidies, and pork-barrel payoffs to business allies in “green” industries. Unfortunately, none of this is new. The government does not create wealth or jobs, it only redistributes them. Consider:

Congress does not have a good record of micromanaging anything (think Fannie Mae and Freddie Mac), let alone something as broad and complex as the U.S. economy. Congress should do what it does best: set broad economic policy. Specifically, Congress should concentrate on signaling to investors and workers alike that its principal focus will be on improving pro-growth economic policy, mainly in the areas of tax, energy and spending policies. The test for distinguishing good stimulus ideas from bad ones should be this: Is the proposal likely to raise the economy to a sustained, higher level of growth?

Unfortunately, markets are already receiving the exact opposite signal. As Cato’s Alan Reynolds documents, the National Taxpayers Union Foundation’s analysis of Obama’s promised new government spending, excluding health care, will raise spending by another $611.5 billion over the next five years. Americans know the tax increases are coming; they just don’t know where from. The Wall Street Journal writes:

The prospect of these tax increases is now hanging over the economy like a pall, as investors and businesses wonder where and how heavily an Obama Administration and Congress would strike. The pall is likely to continue well into 2009, as millions of Americans delay their investment decisions until they know how much their after-tax returns are likely to fall.

If Mr. Obama really wants a “stimulus,” he’ll announce that given the condition of the economy he won’t raise taxes at all. Meanwhile, all of us are getting a preview of Obamanomics in action.

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