You know what this is? This is Democrats realizing that their first stab at the stimulus was an utter disaster. Actually, this was the second stimulus, the first coming under Bush, and not including the TARP rescue.
First, less than 20% of the bill was real stimulus. The jobs that were created were not exactly efficiently created; for example, the Office of Legislative Budget Assistant in New Hampshire reported $413.6 million made its way to the state from the stimulus, creating 50 jobs…or over $8 million per job. The rest was pork, pure and simple (or as Rush Limbaugh has dubbed it, ‘porkulus’). The jobs numbers are now worse than the Obama Administration’s predictions…that is, predictions assuming there NEVER was any stimulus.
Even Democratic supporters are worried. Warren Buffett, an Obama supporter, has been attacking Democrats for weeks. You know it is bad when Larry Summers, White House advisor, says that the worst is YET to come. Ouch.
“Our first stimulus bill … was sort of like taking half a tablet of Viagra and having also a bunch of candy mixed in … as if everybody was putting in enough for their own constituents,” he said. “[the first stimulus] was like half a tablet of Viagra and then having also a bunch of candy mixed in — it doesn’t have really quite the wallop.”
A glowing endorsement, then. Buffett said that a 2nd stimulus may be needed, but it shouldn’t be watered down. What a joke; has he met the Democratic leaders in Congress? Their definition of leadership is ‘watered down’. For example, in the health bill being proposed by the House, legislators have place a provision that could provide billions of dollars for walking paths, streetlights, jungle gyms, and even farmers’ markets. Yes, streetlights are nice, no question; but what exactly do they have to do with paying for my colonoscopy?
O.K., Mr. Smarty Pants…take a step back, and tell us: What has been accomplished in stimulus 1?
Well, we have spent $56 billion of the $767 billion. Only about 10% was to have been spent by now…but even that means we are spending at a slower rate than predicted. And one record: we have a $1 trillion deficit for the first time in world history.
Of the money spent, most (some estimates go as high as 90%) went to states to shore up their balance books. That was necessary, but much of that money is not stimlulative in any sense of the word. After months of bragging about 150,000 jobs “saved or created,” the GAO admits that the states have done almost nothing with their portion of the funds to do anything but keep bureaucrats employed. Bailouts of states are much like bailing out companies like AIG and GM…you may be forced to do it, but it is unlikely to create any economic growth for the foreseeable future.
Billions were to be spent on road projects. So how is that working out? According to an analysis by The New York Times of 5,274 transportation projects approved so far, the 100 largest metropolitan areas are getting less than half the money from the biggest pot of transportation stimulus money, even though more than 2/3 of people live in these areas (not to mention, over 80% of the economic growth in this country). So where is the money being spent? In rural areas. Yup, in areas no one lives, no one works, and no one is really creating jobs in. Brilliant. Your government at work.
The dollars that have been spent form the Stimulus appear to be preferntially headed to districts that voted for Barack Obama. From USA Today:
Billions of dollars in federal aid delivered directly to the local level to help revive the economy have gone overwhelmingly to places that supported President Obama in last year’s presidential election.
That aid — about $17 billion — is the first piece of the administration’s massive stimulus package that can be tracked locally. Much of it has followed a well-worn path to places that regularly collect a bigger share of federal grants and contracts, guided by formulas that have been in place for decades and leave little room for manipulation.
“There’s no politics at work when it comes to spending for the recovery,” White House spokesman Robert Gibbs says.
Counties that supported Obama last year have reaped twice as much money per person from the administration’s $787 billion economic stimulus package as those that voted for his Republican rival, Sen. John McCain, a USA TODAY analysis of government disclosure and accounting records shows. That money includes aid to repair military bases, improve public housing and help students pay for college.
Sure…no politics involved. I don’t believe in coincidences when it comes to politics. Obama Supporting Counties– $69 per person; McCain Supporting Counties– $34 per person…nope, just coincidence.
So, where do we go from here? I think we go back to classic economic stimulus, such as my initial stimulus plan, which I posted in February and can be seen here. Ultimately, government cannot provide long term economic growth by growing the federal bureaucracy. It simply doesn’t work. You must give incentives to businesses to consider rehiring people, to make capital investments in new industries, and to have a reason to grow production. Having politicians handing out pork to their preferred constituents will not create jobs…Obama’s first stimulus proved that.
We will see if Obama is really as smart as he thinks he is. In all fairness, Obama is not pushing for a second stimulus right now…he is just asking for more time. But with unemployment numbers skyrocketing, there will soon be pressure from within his own ranks to do more to save the economy. If he does more of the same, you will know inherently that he is nothing more than a classic liberal idealogue. And that will mean that the tax revolts, including the Tea Party movement, will continue to grow. However, if he is willing to consider new growth measures, such as decreasing the corporate tax rate, capital gains, etc., maybe there is hope yet.
I am not holding my breath.
From Gateway Pundit:
Obama says the recovery will take months.
Barack Obama on July 2, 2009:
U.S. President Barack Obama said on Thursday there were signs that the “economic storm” that has made millions jobless was waning, but warned that it would still take the United States many months to recover.Ten days later…
The recovery will take years not months.
Barack Obama on July 9, 2009:
Obama: Recovery Will Take Years Not Months.
“It was, from the start, a two-year program, and it will steadily save and create jobs as it ramps up over this summer and fall.”Does this guy really know what’s going on?
And even scarier: