Ifat first fiscal stimulus doesn't succeed, spend, spend again. That'sthe motto President Obama embraced yesterday, even if he didn't use theword "stimulus," which has managed to set a political record in thespeed with which it has become unpopular with voters. This time, thespending is being called "Proposals to Accelerate Job Growth and Laythe Foundation for Robust Economic Growth."

But wasn't that also supposed to be the point of last February's$787 billion stimulus, or for that matter of the Nancy Pelosi-George W.Bush $165 billion stimulus of February 2008?

Nearly two years after that first Keynesian stimulus that wassupposed to prevent a recession, and nearly a year after the secondthat the White House said would keep the jobless rate below 8%, thePresident now feels obliged to propose a third. Like the joke aboutPaul Krugman having predicted seven of the last two recessions, sooneror later the White House is bound to get the political timing right.

This time around, the President is at least suggesting a couple ofgood ideas. One proposal would revive his 2008 campaign promise for azero capital gains tax on new investments in small business stock. Mr.Obama dropped the idea from his first stimulus because liberals onCapitol Hill hate the words "capital gains," but yesterday he proposeda zero rate for one year.

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Associated Press

Eightof the 18 California Conservation Corps workers were hired by the U.S.Forest Service as part of the federal stimulus plan.

Anotherdecent idea would extend enhanced expensing for small business that wasotherwise set to expire at the end of this year. This will allowbusinesses to immediately expense up to $250,000 of certaininvestments, which should help with business cash flow.

Both ideas would reduce the cost of capital, and thus wouldpartially counteract the many tax increases coming from the House andSenate that would raise the cost of capital and hiring. These taxreductions also recognize that the only source of real long-term jobcreation is private business.

Most of the rest of Mr. Obama's proposals are unfortunately agrab-bag of greatest Congressional mis-hits. They include a "new" taxcredit for small business hiring that looks suspiciously like JimmyCarter's jobs tax credit that led to few net new jobs and was abandonedafter a year.

There's also a flood of new spending, with the amount presumably tocome later from Congress (oh oh!), on highways and other public works.Perhaps you thought these "shovel-ready" projects had been included aspart of Stimulus II. Alas, that was merely the sales pitch. In theevent, the bulk of that money was shovel-readied to such transferpayments as Medicaid, welfare, community block grants, and cash for theclunkers who run failing public schools. This time, we're told, roadsand bridges really will get the money—and you can bet they'll all bebuilt with higher Davis-Bacon wage rates that will balloon their cost,too.

Howwill this all be paid for? Well, there are the huge tax increases tocome in 2011, if not earlier, as well as more federal borrowing. Thistime, however, Mr. Obama is also proposing to use funds repaid by banksto the $700 billion Troubled Asset Relief Program. When Congress passedTARP a year ago, the Democrats who ran the joint vowed that the cashwas intended to save the financial system and that any returns wouldpromptly go to pay down the debt. As Candidate Obama put it, "everypenny" would go "directly back to the American people." That was then.

Now, we're heading into a new election year and Treasury says itexpects the bailout to cost $200 billion less than expected, and thatit should be able to recover all but $42 billion of the $370 billion ithas lent to financial firms. That ought to be cause for rejoicing—andfor using the cash to reduce a federal deficit that reached $1.4trillion in fiscal 2009 and after two months is on pace to be evenhigher in 2010.

Instead, TARP is now morphing into a revolving line of Democraticpolitical credit. Barney Frank wants to divert at least $4 billion tobail out more home owners. Virginia Senator Mark Warner wants $50billion for loans to small business. Mr. Obama proposed yesterday touse TARP to finance his own ideas as part of Stimulus III, and if heand fellow Democrats succeed the taxpayers will never see this cashagain.

The President tried to recast his "every penny" promise yesterday byarguing that recycled TARP cash would create jobs and thus revenue tobring down the deficit. This is also Speaker Nancy Pelosi's new talkingpoint. They're right that a strong economy is the best way to reducedeficits, but their spend and spend again policies only make closingthose deficits more difficult.

One note of hope here is that the White House admits that the TARPstatute restricts its use to the "stabilization" of the financialsystem. The law also specifies that repaid money must go to deficitreduction, a fact that allowed Mrs. Pelosi to gather enough votes topass TARP last year. This means Democrats are going to have to rewritethe law to spend TARP on pork and green jobs, giving Senate Republicanssome leverage and Blue Dog Democrats another chance to write the adscripts for their 2010 opponents.

As the President gladly admitted yesterday, the economy isrecovering and even the job market is healing. If Congress won't reducetaxes, the best stimulus now would be for Congress to stop scaringprivate job creators by promising to help them. Just do nothing at all.