Obama’s Stimulus Is Failing…


I know…it has been only a few months. But still, Obama’s stimulus plan is looking less and less attractive as time goes on.  A relatively new blogger, Innocent Bystanders, has nicely shown how the unemployment numbers are worse after the stimulus, than they were predicted if we had never passed the stimulus.  I have been making this very same argument for months, but he clearly has graphically shown this very nicely.

The White House came out today, and promised that 600,000 jobs would be created  (or saved, whatever that means) this  summer.  That is just great.  If they had the solution to the jobs crisis, it would have been nice to see it earlier, don’t you think?  Liberals, such as the Nation, have also looked at unemployment numbers with dismay.

This cannot be easily defended.  And the public is starting to notice.  Rasmussen now shows Republicans favoring Democrats by 6 points, on the ECONOMY!  It is the first time in over 2 years Republicans have led on the issue.  Republicans also now hold a six-point lead on the issue of government ethics and corruption, the second most important issue to all voters and the top issue among unaffiliated voters.   That doesn’t even begin to talk about foreign policy, where Republicans are widening their already existing leads.  And 46% of people now feel the stimulus plan should be nullified all together.

The White House is in full crisis mode.

First, Barack Obama came out for Pay-as-you-go (or PAYGO), which would require Congress to, well, pay as they go.  Of course, nice in theory; Nancy Pelosi promised the same thing before the 2006 election as well.  This is obviously closing the barn door after the horses have escaped, considering that Obama has spent upwards of $2 trillion already that has not been paid for by any stretch of the imagination.  And since we are already in a $2 trillion hole, how exactly does Obama propose to pay for his other goals, such as health care reform, environmental action, etc.?  Actually, Obama added the caveat that he would exclude health care.  What good is the rule if you are going to exclude everything from it?In other words, this is more empty rhetoric.  It has gotten so bad, the New York Times is trying to blame Bush for deficits that Obama is creating.  What nonsense.

Jared Bernstein, Obama’s key economic advisor, in the last few weeks has tried to defend the Obama projections.  Bernstein, who predicted that with the stimulus unemployment would be below 8% right now, says his predictions were off because he didn’t have the numbers from the 4th quarter of 2008.  Fine.  If that is the case, why should we believe any of his projections more than 3 months from now?  For example, he says Obama will create 300,000 jobs this summer…without ever providing one shred of evidence to how he came up with this number.  I think he pulled it out of thin air, IMHO.

This week, Timothy Geithner pointed to the return of TARP funds from 10 banks as a sign of the recovery.  What he doesn’t tell you is most of those financial institutions were forced to take TARP money…and would have survived with or without that money.  And if the recovery is in full swing, why is Geithner planning on spending the TARP money for other uses, instead of returning it to the national treasury, say, to pay of the massive debt we are running up?  Intellectually, you all know this is dishonest.

Democrats have asked for more and more time.  That is fair.  But explaining how their Stimulus bill caused the economy to beworse than the baseline that they themselves had predicted…well, that is very difficult indeed.  Even if you use the rationale that the initial baseline was Bush’s fault, who do you blame for the uptick?

Only one person comes to mind.

UPDATE: It gets even worse.  Arthur Laffer (of the Laffer Curve) has a nice chart showing our exploding money supply…which eventually will lead to huge inflation.  Lovely.