President Obama’s “stimulus” package has been dogged by controversy since its enactment. There have been questions about the accuracy of reports of jobs “saved or created” by the stimulus spending, claims that the money really was used mostly to maintain public employee jobs and to allow state governments to defer their own deficit-reduction efforts, and an admission by President Obama that there were no “shovel-ready” projects to be funded, notwithstanding what was represented when the “stimulus” legislation was enacted.
The most recent analysis of the President’s Council of Economic Advisers, released Friday, estimates that the “stimulus” has cost $666 billion and produced between 2.4 million and 3.6 million jobs. The 2.4 million jobs estimate was developed using the “CEA Multiplier Model” and the 3.6 million estimate was based on the “CEA Statistical Projection Approach.” Republicans and The Weekly Standard have used the lower estimate, divided it into the total cost of the “stimulus,” and concluded that each of the 2.4 million jobs cost the taxpayers $278,000. The White House responds that such an analysis is biased because it uses the lower jobs estimate and does not consider the tangible items that were built using “stimulus” funds. Whose spin is closer to the truth? When you consider that both jobs numbers are based on theoretical economic models and undertake the slippery task of estimating jobs “saved,” you may as well argue about how many economists can dance on the head of a pin.
Outside the Beltway, I think there is general consensus that the “stimulus” legislation did not deliver much bang for the buck. The “stimulus” was sold as a way to massively jump start the economy, prevent high unemployment, and ensure a speedy recovery. Those things clearly haven’t happened. We’ve spent more than half a trillion dollars and we are still facing a stagnant economy characterized by high unemployment and low growth. It’s as if we’ve gone on a bender, the intoxication has worn off, and we’ve now awakened to a painful hangover and a gigantic bar tab that we really couldn’t afford in the first place.
“Investment” is, of course, just a code word for more government spending. The only reason the word “stimulus” isn’t used any more is that it has acquired deadly connotations for American voters, who recognize that the initial “stimulus” package was a leaden failure that grossly increased the federal debt without producing much in exchange. Doesn’t “investment” in “education” and “science” sound an awful lot like using our tax dollars to pay for more government jobs? And as for “investment” in “innovation,” is there really anyone out there who thinks that members of Congress or government bureaucrats could distinguish true innovation from a cracked pumpkin?
We may find out tomorrow that the President has a great plan — but until then, color me skeptical. Whenever I hear the argument that the way out of our ongoing recessionary doldrums is still more government spending, I have the same horrified and anguished reaction as the poor, lost soul Richard depicted on the wonderful bit of “kid art” accompanying this posting.
As the stimulus program winds down, we learn more about how our federal dollars were spent.
The latest story reports that the inspector general for the Social Security Administration examined the $250 payments made to senior citizens under the stimulus bill. The inspector general determined that 72,000 of the $250 payments — $18 million in all — were made to the dearly departed, and another $4.3 million went to 17,000 prison inmates. Nice to know that our frankensteinian government is seeking to stimulate the dead, and the imprisoned! Is anyone checking to see whether the trade in cigarettes and illicit goods at San Quentin has flourished as a result?
The article reports that a little more than half of the improper payments to those already dead were returned, and I suppose we should be grateful that so many relatives were honest. The article makes no mention of how many prisoners acted similarly, however.
There is no need to comment on the latter point, because the economic statistics and the common experiences of average Americans tell the tale. What I find humorous about this latest report is the suggestion that we should be grateful that the process of spending hundreds of billions of dollars was “relatively free” of claims of outright fraud. Well, thank goodness! We’ve managed to avoid rampant criminal behavior! Should that really be the standard by which we judge the effectiveness of a federal spending spree that has contributed mightily to enormous budget deficits and a sickening rise in our national debt?
With stories like this, will people please stop trying to convince us that the “stimulus” bill was anything other than a gross exercise in pork barrel spending that utterly failed to deliver what was promised?
It’s hard to see how this $50 billion stimulus proposal could have a significant immediate impact on the economy or unemployment. After all, last year’s much larger stimulus bill, which was supposed to target “shovel-ready” projects, didn’t deliver what was promised. In addition, the President’s latest proposal would have to go through the ponderous government contracting process, which means that the money would not be spent quickly. Cynics no doubt will argue that this proposal is a political gambit that is intended only to give President Obama and congressional Democrats a platform to criticize Republicans, who clearly will oppose more spending in view of the nation’s budget woes, as heartless and indifferent to the plight of the many unemployed.
Let’s take the President’s proposal at face value, however. In view of the apparent failure of the first stimulus package, isn’t it curious that more stimulus spending is all the President’s economic team can come up with? Polling data is showing that a broad majority of Americans think that the first stimulus legislation was a colossal waste of money. By going back to the well with another stimulus proposal notwithstanding the polls, the Administration is showing a remarkable tin ear. In view of this proposal, won’t voters in November be well within their rights in concluding that a vote for congressional Democrats really is a vote for still more borrowing and spending? Given the mood of the country, that conclusion probably won’t bode well for the President or his allies.
Times are tough on this Labor Day. You can’t pick up a newspaper or visit a news website without seeing discouraging reports on employment, manufacturing, housing, and other economic indicators. Labor Day marks the traditional end of summer and beginning of autumn — which means that the “Recovery Summer” has come and gone, with nary a recovery in sight.
What does it all mean? Different observers are reaching fundamentally different conclusions. This writer thinks our economic problems are attributable to the fact that American workers are not as unionized as their European counterparts and are powerless to stop capitalist employers from taking advantage of a bad job market. This writer thinks we need to cut taxes and cut regulations that may be hindering small business growth and job creation. Others say we need to cut government spending before the American economy becomes permanently crippled by unsustainable levels of government debt. In direct contrast, still others, like this columnist, urge the government to engage in even more stimulus spending.
It seems that the only thing everyone can agree on this Labor Day 2010 is that there is no consensus on how to proceed. This may be a good thing, however. We have an election coming up, and Americans will be presented with political choices that reflect different economic philosophies. With no “expert” consensus to bludgeon them, I think the average American will fall back on their common sense and be guided by their own experiences in deciding how to vote. The collective decision-making of average Americans, acting on their own common sense and practical experience, have tended to serve America well in the past.