What Changed Pelosi’s Mind?
Tuesday: Nancy Pelosi emerged from a meeting of House Democratic leaders and said she agreed with economist Mark Zandi of Moody’s Economy.com that a second stimulus might be needed to prevent the troubled economy from slipping further into recession.
Thursday: She tells reporters that she wants to see how the first $787 billion stimulus package, the $410 omnibus bill signed Wednesday, and efforts to shore up banks and other jobs-creating legislation play out before moving toward a new stimulus.
I would be curious to know why she changed her mind. I am sure, though, that it won’t take a long time before she changes her mind again and asks for more money. Why would she change her mind again? Two reasons: Changing her mind is what she does, and the first stimulus won’t work. Stimulus by government spending never does. It only ends up burdening the economy. Such was the case in the 1930s, during World War II, and in 1990s Japan.
— Veronique de Rugy is an economist at the Mercatus Center at George Mason University.