I am baffled by the claims that government-funded batteries produced in Michigan will save the economy.

Standing at a podium in a muddy construction site, Obama celebrated the groundbreaking of an advanced car battery factory that the White House predicts will produce 300 permanent jobs. It was his fourth battery-related trip as president, and it came as the White House makes an aggressive push to tell what one senior official called “the battery story” — the tale of a small piece of technology that could affect daily life and spur employment if properly nurtured.

I do see the immediate benefit for the factory owner that will receive the stimulus money, but this money has direct and indirect costs that will ultimately hurt the economy. First, let’s remember that this money doesn’t fall from the sky; in order to spend it, Obama needs to either tax Americans or borrow money (that, or print money), which means less capital for private businesses and potentially higher interest rates in our future. For that factory owner to get his cash, others have to give it up.

Second, you have seen the data but it bears repeating: According to Harvard economist Robert Barro, $1 spent in government spending means that the economy will skrink by $1.10. That’s bad.

Also, new research from Harvard Business School shows that increased federal spending in states causes local businesses to cut back rather than grow. In other words, when government spending grows, the private sector shrinks. Interestingly, the scholars who wrote that articles are not raging free-market activists. In fact, according to an interview of one of the authors:

Recent research at Harvard Business School began with the premise that as a state’s congressional delegation grew in stature and power in Washington, D.C., local businesses would benefit from the increased federal spending sure to come their way.

But they found the opposite was true.

Finally, did government spending help the car industry by bailing them out in the past and this year? Absolutely not. Private companies receiving government funds will not be forced to fix what caused them to fail in the first place. No one should know this better than people in Michigan.

By the way, this paragraph speaks for itself:

But the administration’s $2.4 billion investment in the development of batteries and other electric-car technology in the United States is an enormous bet on a product that has yet to gain broad commercial success. Major manufacturers have yet to sell electric cars in the United States. Hybrids, though they have been around for a decade, represent less than 1 percent of the nation’s roughly 250 million-vehicle fleet.

Government spending as a cure for economic recovery has been tried, and it failed. It is time for lawmakers to acknowledge their limitations and let businesses do business instead of getting in the way of their successes.

Incidentally, I was at Washington Journal this morning speaking about these same issues. The video is here. I also have a piece about cutting spending in this morning’s Washington Times.