October 22, 2014

Creighton economist says U.S. now a “bail-out” nation

This week marks one year since passage of the federal economic stimulus package. Creighton University economist Ernie Goss isn’t celebrating the anniversary, as he says the legislation helped to create a “bail-out” nation. 

“Now we’ve got California and New York saying well, it’s our time to step up, it’s our time for a bail-out,” Goss says. 

According to Goss, the bailout mentality has spread to individuals, as some people are waiting for the next “Cash for Clunkers” program before they buy a car. Officials claim the stimulus package put two million people to work. Goss disputes that number yet agrees more people are working, but at a cost. 

“It has created jobs but I think the cost of that job creation is more than the benefits we’ll ever get,” Goss says. 

Goss isn’t painting a rosy picture for Iowa and for the nation is the year ahead. “We’re not going to be adding any significant jobs,” Goss says. “There’s too much uncertainty out there. We’re still dealing with health care, cap and trade, the 2001-2003 tax cuts that are going to be gone at the end of this year. All that uncertainty is really putting businesses and individuals on the sidelines so that’s the chief problem, at least in my judgment.”

Goss says much of the bailout money is likely gone for good. He says funding given to AIG is likely gone, too, and he doubts Chrysler and G.M. will be able to pay much back either.

(Reporting by Karla James in Omaha)