In a recent Op/Ed piece in the Wall Street Journal (The Stimulus Evidence One Year On, February 22, 2010 ) Professor Robert Barro an economist at Harvard University asked if the Obama stimulus package had a positive impact on the US economy. On the first anniversary of the Obama stimulus package (originally estimated at $787 billion but now priced at $862 billion), Prof. Barro evaluated whether, and how, such deficit spending actually moderated the recession. To be quite fair, these are complex questions, and their answers require more than merely counting the quantity of goods and services that the government purchased or the number of people that the government hired.

In order to answer these complex questions, as Prof. Barro writes, "We need to ask whether the government's spending reduced or enhanced private spending and whether public-sector hiring lowered or raised private hiring." In conclusion, Prof. Barro states emphatically, "Thus, viewed over five years, the fiscal stimulus package is a way to get an extra $600 billion of public spending at the cost of $900 billion in private expenditure. This is a bad deal. The fiscal stimulus package of 2009 was a mistake. It follows that an additional stimulus package in 2010 would be another mistake."

I would agree with Prof. Barro's analysis, as good as it is; however, it probably underestimates just how ineffective the Obama stimulus was - as an economic stimulus. However, it was very effective in rewarding the public employee unions that represent a large number of policemen, firemen, and other public employees at the state and local level of government. Plus, the Obama stimulus rewarded the teachers unions.

And we hear almost daily from the megaphones of the Obamacrats how important it was that we saved all of those public employee jobs. After all, unemployment would most certainly have been higher if those public servants had lost their jobs. However, very little consideration has been given to the value of those jobs and whether it was necessary to keep them employed.

It is an economic truism that during the good times when tax revenues and other public revenues are plentiful, such as during the Bush administration from 2002 until 2006, public employee roles increased dramatically. Here in San Francisco, I did not perceive any improvement in services even with the massive increases in public employees during the past 8 years from 2002 to 2010. Now that tax revenues have fallen precipitously, we do not see any political will or willingness of the public employee unions to cut the roles of public employees, who have more generous salaries, retirement plans and other benefits than do employees in comparable positions with private sector companies. In fact, the disconnect is so great that many more municipalities face the same fate as Vallejo which has been operating in bankruptcy now for nearly three years.

My question is, if Prof. Barro could perform a similar analysis of the Bush tax cuts enacted in 2002, can you determine if these tax incentives had an appreciable, positive stimulus impact on the US economy?

Anecdotal evidence would suggest that the Bush tax cuts, which have been vilifies as favoring only the rich (but then who else is paying income taxes), had a very favorable impact on capital formation, productive private sector investment, increased employment, and increased tax revenues. In fact, here in California, and San Francisco, in particular, tax revenues were so high that the State actually had a surplus that Gov. Schwarzenegger tried to "save" as a "rainy day fund." But to no avail, since we long ago spent the modest $4 billion that was saved. We are no facing a state budget deficit of nearly $40 billion and here in San Francisco we are facing a budget deficit for 2010-2011 of $550 million.

So, I would ask if Prof. Barro, could please provide an analysis of the Bush tax cuts. Did these actually work to stimulate the US economy that had slipped into recession as a result of the bursting of the Internet Bubble and the September 11, 2001 attacks that disrupted the financial markets?