Diary

Stimulus Failed, As Expected

A recent report on the weeklystandard.com called Obama’s Economists: ‘Stimulus’ Has Cost $278,000 per Job by Jeffrey Anderson sums up what we capitalists have been saying all along about Obama’s leftist ‘Keynesian’ approach to the economy.

The Weekly Standard article was written about an unfavorable federal report that was “dumped” on Friday of the July 4 weekend so that nobody would notice it.

The Keynesian approach says that the economy can be stimulated by government cash. And this approach certainly can have marginal success when times are good, for instance by flooding a depressed part of the nation with federal dollars collected from areas that are prosperous.

But Obama now is relying on government stimulus to try and shock the entire American economy back to life. And Keynesian economics not only does not work but it is ruining the economy irrevocably with mounting debt that will never go away.

Said Anderson’s article:

‘The Seventh Quarterly Report on the economic impact of the “stimulus… provides further evidence that President Obama’s economic “stimulus” did very little, if anything, to stimulate the economy, and a whole lot to stimulate the debt. ‘The report … chronicles the alleged success of the “stimulus” in adding or saving jobs.

The council reports that, using “mainstream estimates of economic multipliers for the effects of fiscal stimulus” (which it describes as a “natural way to estimate the effects of” the legislation), the “stimulus” has added or saved just under 2.4 million jobs — whether private or public — at a cost (to date) of $666 billion.

That’s a cost to taxpayers of $278,000 per job. ‘In other words, the government could simply have cut a $100,000 check to everyone whose employment was allegedly made possible by the “stimulus,” and taxpayers would have come out $427 billion ahead.’

…Furthermore, the council reports that, as of two quarters ago, the “stimulus” had added or saved just under 2.7 million jobs — or 288,000 more than it has now. In other words, over the past six months, the economy would have added or saved more jobs without the “stimulus” than it has with it.

In comparison to how things would otherwise have been, the “stimulus” has been working in reverse over the past six months, causing the economy to shed jobs.

Again, this is the verdict of Obama’s own Council of Economic Advisors (end of excerpt)

This is shocking. And these are Obama’s own people talking. And they are simply restating in Washington-speak what common sense tells us is always true – that real growth in the economy comes from private-sector sources, and that taxes and debt are anathema to progress. Says the Anderson article:

‘The actual employment numbers from the administration’s own Bureau of Labor Statistics show that the unemployment rate was 7.3 percent when the “stimulus” was being debated. It has since risen to 9.1 percent. Meanwhile, the national debt at the end of 2008, when Obama was poised to take office, was $9.986 trillion. It’s now $14.467 trillion – and counting.’ (end of excerpt)

And don’t forget that the “9.1 percent” unemployment rate is fake. The real number may be twice as big. And thus Obama has wasted more than two-and-a-half years on his potemkin plan which is like a rusting bridge that is not repaired, but rather the money to fix it is wasted or stolen. And then the bridge is in worse shape than ever, and even closer to collapse.

In 1932, Democrat Franklin D. Roosevelt was elected president on the promise to fix the economic depression. But after 8 years of Keynesian spending, unemployment was higher in 1940 than it was in 1932. Here is a quote from Roosevelt Treasury secretary Henry Morgenthau talking in 1941 about years of heavy government spending for make-work jobs during the depression:

“We are spending more money than we have ever spent before, and it does not work. I want to see this country prosperous. I want to see people get a job. I want to see people get enough to eat. We have never made good on our promises. I say after eight years of this administration, we have just as much unemployment as when we started and an enormous debt, to boot.” (end of quote)

And Obama’s ‘stimulus’ spending was not even the “make-work” spending of the 1930s – to build highways, for example. It was mostly distributed to state employee unions to save their jobs, not create new jobs or even to build unneeded highways like the Taconic State Parkway in New York state.

There is proof everywhere from history that Obama-type policies do not work. The whole world debt crisis is a result of too much government spending. In Europe, where socialist policies are supposed to create utopia, everything is already taxed to the limit and the debts just keep growing and the outlook becomes more and more desperate.

Just look across America at the states with the biggest debts and the greatest population losses among their skilled and educated people and you find the three most liberal states – California, New York and Illinois – with the most dire outlooks. New York state has an 8.25% statewide sales tax among its myriad crushing levies. Chicago has an 11.25% city sales tax.

These Democrat measures ultimately do not gain more money for the state treasuries, just as Keynesian policies do not stimulate growth. They have the opposite effects. Businesses and citizens are fleeing these states, and shoppers go over state lines to avoid the sales taxes.

Economies are largely psychological. When people feel uncertainty, their entrepreneurial spirits are depressed. Obama and his policies are dark clouds over the economy. Only a new president in 2012 can change things. And he/she can change things quickly by changing the feeling in the nation, that we indeed do have a brighter future.

Please visit my website at www.nikitas3.com for more. Watch for the new and improved Nikitas3.com in the coming week!