Manarin Investment Counsel, Ltd.

House Democrats propose to spend $550 billion of their two-year, $825 billion "stimulus bill" (the rest of it being tax cuts).  Most of the spending is unlikely to be timely or temporary.  Strangely, most of it is targeted toward sectors of the economy where unemployment is the lowest.

The December unemployment rate was only 2.3% for government workers and 3.8% in education and health.  Unemployment rates in manufacturing and construction, by contrast, were 8.3% and 15.2% respectively.  Yet 39% of the $550 billion in the bill would go to state and local governments.  Another 17.3% would go to health and education -- sectors where relatively secure government jobs are also prevalent. 

If the intent of the plan is to alleviate unemployment, why spend over half of the money on sectors where unemployment is lowest?  Another 22.5% of the $550 billion would go to social programs, such as expanding food stamps and extending benefits for the unemployed and subsidizing their health insurance. 

- From Alan Reynolds' recent editorial in the Wall Street Journal.