Five Duke faculty members made their dissatisfaction with the proposed economic recovery plan known in a decidedly public manner Wednesday.
John Coleman, Adriano Rampini, Edward Tower, Juan Rubio-Ramirez and Michael Munger were among 200 economists who signed a full-page advertisement published in The New York Times, Washington Post and several other national publications Jan. 28. The ad decried the $819 billion proposed stimulus package that won House approval in a 244-to-188 vote the same day.
The ad was sponsored and paid for by the Cato Institute, a libertarian-leaning think tank based in Washington, D.C.
"There is no disagreement that we need action by our government, a recovery plan that will help to jumpstart the economy," the ad quoted President Barack Obama from a Jan. 9 address.
"With all due respect, Mr. President, that is not true," the statement continued, stating that historically, government spending has done little to pull the country out of hard times. "It is a triumph of hope over experience to believe that more government spending will help the U.S. today."
The Cato Institute spearheaded the effort to put together the ad, targeting hundreds of renowned economists-including three Nobel Prize winners-to dispute the perception that government intervention is the obvious way out of the current recession, said Chris Edwards, director of tax policy studies for the Institute.
"A lot of people feel like that there's no other position, and there's a sense of inevitability and necessity to this stimulus plan," said Munger, chair of the political science department and former Libertarian candidate for North Carolina governor. "People can agree or disagree but they should recognize that there is another side, there is a debate among academic economists."
The economic philosophy behind the recovery plan is based on outdated and faulty logic, the Duke signatories said. The other Duke faculty members involved, Fuqua professor Coleman and Rubio-Ramirez, an associate professor of economics, could not immediately be reached for comment.
"It's too important an economic crisis to be dealt with misleading scientific evidence," said Rampini, a professor at the Fuqua School of Business. "The idea of the stimulus is based on ideas that are obsolete. The progress in economics in the 1970s show that simply expanding government in bad times does not make us better off. It can actually make us worse off."
Munger similarly equated the plan to pump billions into the economy through public projects to the medical practice of bleeding patients in the 19th century.
"We're bleeding the economy and we have this sense that we have to do something," Munger said. "This stimulus is not even a stimulus. It's a laundry list of interest group payments."
In addition, Tower said that there are better alternatives to the proposed stimulus that would favor the United States in the long run instead of short-term band-aids.
"The folks who do not like the stimulus package are worried that this is going to result in bridges to nowhere." he said. "Spending should be done when it's needed, not to jumpstart the economy. It should be done when government is needed-for roads, for education-not in order to create jobs.... I think you want to look carefully at government spending and ensure that it's better than private spending."
The signatories emphasized the need to look to the future when formulating economic policy.
"What we're doing with the stimulus is that we're adding an extra debt to the next generation and we believe that's really unfair," Edwards said. "There is a moral issue here in addition to an economic one."
The Cato Institute is currently running similar ads in smaller papers in Washington, D.C. in addition to those in national publications, Edwards said. Plans for future statements have yet to be determined.
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