STIMULUS BUST • ‘The problem with the first stimulus was more its composition than its size.’
Remember back in January and February how imperitive it was for Congress to pass the $787 billion economic stimulus package? President Obama constantly repeated his refrain that the U.S. had to move “swiftly and boldly” to get the economy back on track. He told us it would quickly create millions of jobs.
Now the White House is walking all of that back, claiming the “stimulus” was never actually intended to “stimulate” anything.
You can’t blame the president, really. The numbers show that, clearly, the stimulus hasn’t provided any kind of measurable boost to the economy thus far. The U.S. is still hemorrhaging jobs — the very thing the stimulus was supposed to provide, to the tune of 3 million or so, according to the presidet at the time.
The walk-back began last weekend, during the president’s weekly address. He said:
Now, I realize that when we passed this Recovery Act, there were those who felt that doing nothing was somehow an answer. Today, some of those same critics are already judging the effort a failure although they have yet to offer a plausible alternative. Others believed that the recovery plan should have been even larger, and are already calling for a second recovery plan.
But, as I made clear at the time it was passed, the Recovery Act was not designed to work in four months – it was designed to work over two years. We also knew that it would take some time for the money to get out the door, because we are committed to spending it in a way that is effective and transparent. Crucially, this is a plan that will also accelerate greatly throughout the summer and the fall. We must let it work the way it’s supposed to, with the understanding that in any recession, unemployment tends to recover more slowly than other measures of economic activity.
It’s a lie to say that he “made clear at the time it was passed” that it would not work in four months. In fact, he repeatedly said it would create jobs “immediately,” as this ad from congressional Republicans illustrates:
Then, in off-camera interviews on Thursday (off-camera so they couldn’t be used in ads like the one above, maybe?), administration officials attempted to say the stimulus was only meant to soften the economic fall. As the president’s chief spinner, Robert Gibbs, said:
This legislation was designed to cushion the downturn. That’s why we have always talked about this as one function of economic recovery.
Please. When the president was pitching the bill, he said:
That is why I have moved quickly to work with my economic team and leaders of both parties on an American Recovery and Reinvestment Plan that will immediately jumpstart job creation and long-term growth.
What’s more, the White House continued to refer to it as a “stimulus” up until Thursday’s off-camera interviews.
Is it any wonder that Larry Summers uses Google trends to judge how well the stimulus is working?
The fact is, congressional Republicans were right. The stimulus bill had very little to do with stimulating the economy, and more to do with funding pet projects, expanding the size of government and rewarding Democratic contributors.
The question for everyone now is: Should we continue to believe the Obama administration and Democrats in Congress as they proceed to “reform” health care? The Congressional Budget Office — which typically underestimates the cost of new government programs — says the health care bill will end up increasing costs, not lowering them, as Obama says his “reform” will do.
Should we believe the administration when it says cap-and-trade will create jobs and “stimulate” the economy?
The answer is “no.”
The vice president famously said the adminsitration misread the economy. Not only did they misread the economy, they prescribed a solution that did nothing but help create the largest U.S. deficit in history.
We shouldn’t have any confidence in their health care promises. President Obama and his administration have shown they don’t know what they’re talking about or what they’re doing.
After the health care plan doesn’t work, will the president tell us it was never meant to “reform” health care?
‘I SLOWED DOWN IN THE SCHOOL ZONE, CREATING OR SAVING THREE CHILDREN’ • Also, ‘Deciding against serial killing, I created or saved upwards of 33 people.’
Recalled California Gov. Gray Davis didn’t waste time in sending a message to Democrats cheering about Sen. Arlen Specter doing the ol’ party swap.
“That’s excellent,” he told the San Francisco Chornicle’s Spin Cycle Blog, and then he offered some advice from a politician who knows first hand about “the slings and arrows of outrageous fortune.”
Yes, Democrats, heed the advice of Gray Davis. It’s not that the people will overwhelmingly reject your incompetence, it’s just that the “slings and arrows of outrageous fortune” will hit you.
Only a self-absorbed, delusional fool would think that it was mere “fortune” that put the nail in Davis’ political coffin. And only such a fool would think the GOP’s challenge to Specter and the conservative backlash against the Obama economic agenda is anything similar.
Let’s recall (pun intended) that Gray Davis created his own misfortune — by passing bogus state budgets (with the help of Democrats in the state Legislature), calling them balanced, skating to re-election, and then crying “crisis” when the books didn’t balance.
When he took office, the state of California was running a budget surplus of $15 billion. Instead of giving that money back to the people, investing in one-time projects such as new roads or schools or simply stashing it away for a rainy day, Davis oversaw an alarming expansion of the state government. Ultimately, he was the father of a $38 billion budget deficit in 2003, and voters justifiably fired him.
All of that could have been avoided. During his last four years in office, California’s combined rate of inflation and population growth was 21 percent and state revenues increased by 28 percent. All should have been good — the state was taking in money at a greater rate than it was growing. But no, government spending ballooned by 36 percent; eight points ahead of revenue and 15 points ahead of growth. Davis lacked the fortitude to look out for the state’s long-term, financial interests (this is not say the goon we replaced Davis with has done any better).
But, according to Davis, it was “outrageous fortune” that did him in.
I’m always conscious that we live in a cyclical world. You’re up one day, and you’re down another. So people shouldn’t get carried away thinking about their good fortune.
The tide goes in, the tide goes out. Times change, attitudes change. …
It’s great news for now — but no one should get complacent.
One would think Davis would know by now that you can’t spend taxpayer money like crazy, bankrupt the government and get away with it. One could guess that Davis would warn the party against exploding the size of government, especially during a recession.
But no. His advice is to not get too excited.
Specter himself admitted that his vote for the stimulus package was the tipping point, prompting a conservative to offer a serious challenge in the Republican primary that Specter would likely have lost.
Specter, like Davis, hasn’t learned that you can only run-up the taxpayers’ tab for so long before they start to notice.
Assuming Al Franken takes the Minnesota seat, Specter gives the Democrats the filibuster-proof 60 seats in the Senate (62 if you count Sens. Collins and Snowe) — so it’s all on them. As Obama pushes through his government expanding plans in the arenas of education, health care and energy, they won’t be able to shift the blame onto anyone else.
And as taxpayers begin to realize the bill for those programs is one we can’t afford, perhaps Specter can sit down with Gray Davis and ask him whom they will hold accountable.
Federal Reserve Bank of Minneapolis President Gary Stern told the Wall Street Journal today:
My forecast is actually for some improvement beginning around the middle of the year. That doesn’t mean we’re going to take off to exceedingly rapid growth.
Improvement around the middle of the year? That’s long before the vast majority of the stimulus money will hit, even for those so-called shovel ready projects. So did we even need it? What will Barack Obama’s argument for this reforms in education, health care and the environment be if he can’t take aim at the “economic crisis?”
He also slammed those alarmists who constantly compare this economic downturn to the Great Depression (which seems to always be the left’s mantra: “The worst economy since the Great Depression” was used during the 1992 presidential campaign even though economic data show the economy turned around before we elected Bill Clinton):
For those of us who were around for ‘80-’82 and ‘73-’75, what’s happening in the economy and a lot of the rhetoric that goes with it rings more familiar.
There’s a familiar ring to Stern’s statements. To quote myself:
According to the National Bureau of Economic Research, of the 12 recessions since the Great Depression, the longest two lasted a mere 16 months, from November 1973 to March 1975 and from July 1981 to November 1982.
Our two most recent were half as long, spanning eight-month periods from July 1990 to March 1991 and from March 2001 to November 2001. The average recession length since the Great Depression is just under 10 and a half months.
THERE’S GOT TO BE ROOM IN THE STIMULUS FOR THIS • We can fund STD testing but not surfing Internet porn? That’s just mean.