Feb 18 2010
Updates At End
The government cannot generate economic stimulus. Being a leech that lives off the general economy it is always a drag on the economy, not a force to create rapid growth (technology investment creates long term growth potential). Sometimes a needed one to ensure things do not run out of control or people are enslaved by the greed of others. But it is a drag on the economy, taking money from everyone who works to fund its missions – and its mistakes.
When the economy dips or stumbles the proven method used by George W Bush, Ronald Reagan and John F Kennedy was to lower taxes and reduce government spending to give some air to the economy so it can pick back up. This proven approach is evil incarnate to the liberal mind – one wrapped in fairy tales of left wing superiority. It is false to say nothing else could have been done. All the money wasted in the stimulus bill would have had an impact if taxes and spending were cut.
It is only the extremely naive and gullible who think the leech of government can stimulate the economy and create jobs. This weekÂ a very naive, young President came out to tout his liberal stimulus bill, to put lipstick on his bloated and lethargic pig. It truly was one of the dumbest political moves I have ever seen.
We all know the ‘stimulus’ bill failed to stimulate anything. That is because the 80% spent to date has all gone to cover state deficits, unemployment, food stamps and medicare. No one should buy the myth bloated state governments had no room to cut bureaucratic waste, salaries and services before the teachers, fire/rescue and police.
To date very, very little has been spent on job producing make-work projects. That is because even the builders of our vast and bloated bureaucracy (i.e., Congress) have never understood how slow and ponderous this federal leech has become. The fact is it takes years to move money from a congressional budget line to an actual spending project which is creating jobs. That is why this liberal mirage was doomed to fail before the ink dried on the bill – the jobs were not going to show up within a year.
We have the government generated data here to prove it. First, here is a reminder of the unemployment picture since January 2008, with a highlight of when the stimulus bill was passed. It illustrates the unaltered trajectory of the U3 (general unemployment) and U6 (all unemployed, underemployed, etc) – click to enlarge.
As anyone can see the trajectory of unemployment did not divert at all. It kept rising and apparently slowed naturally. The liberal lie that unemployment would not surpass 8% was meant to sell the package, since anyone with even modest math skills would know 8% was going to be broken in February or March based on the trajectory of the previous months. That was a lie, the stimulus bill was a lie.
The real damage to the job market can be seen in another federal statistic, and that is the number of poor souls clinging to the Emergency Unemployment Compensation (EUC) life line. These are people who have been out of work so long they have used up all the normal unemployment and extended unemployment benefits and are trying to stay alive on EUC. Unlike the slowly stabilizing curve of U3 and U6, EUC is skyrocketing to never before seen heights.
This is the true measure of lost jobs. Jobs lost so long that the EUC rolls have been expanding by 796,000 in January, 776,000 in December and 604,000 in November. If the stimulus bill was actually creating jobs this would not be the case, people would not be running out of unemployment assistance.
Right now the EUC rolls are a staggering 5,797,875 – which is nearly 3 times the number of people on the EUC rolls when the vaunted stimulus lie was passed a year ago.
As I said, these are all government numbers. And the most damning numbers come from the organizations that were directed to create all those jobs in all those make-work programs. Of what was the original $787 billion (now well over $800 billion due to the higher unemployment than ‘expected’), $300 billion was targeted to make-work programs. I have been monitoring 6 government organizations which represent 1/3rd of the make-work money. And here is what the stimulus bill has achieved in terms of spending on jobs one year after it was rushed through Congress:
The far left column is what each organization was authorized in the bill. Interestingly, the government stopped advertising this number on its website after a few months when it became apparent that the progress would look horrible if the value budgeted stayed up for comparison. You can find these numbers on the very early weekly report spreadsheets.
The next column (center-left) captures how much of the total has been applied to legal programs or projects. The government has to go through a lot of hoops to approve the spending program/project before they can even begin to spend. The next column (center-right) shows how much of the total budget has been actually spent. This usually kicks in once the contracts are let and the work really starts up (some planning, mostly doing). This is the job creating spending – and it is truly pathetic to date. The last column (far-right) is the money left unspent.
Since these budgets range from half a billion to 50 billion dollars the chart is not easy to read. So I have a second chart which shows the last three columns as a percentage of the organizations’ total budget. Here we can see the general progress in terms of percent complete:
So, we have percent of the total budget committed to programs/projects in the left column, percent of total budget spent creating jobs in the middle, and percent of the total budget stuck in the bowels of the federal bureaucracy in the far left column.
As we can see the spending to date on jobs has been meager. Â On average only 11.6% of the total budgeted a year ago has been spent ‘creating or saving‘ ‘shovel ready‘ jobs. 88.4% of the $105 billion allocated to these organizations has done nothing! In other words $93 billion failed to make it out of the bowels of the bureaucracy to address unemployment. Is it any wonder the EUC rolls are climbing when all the stimulus money for jobs is stuck in DC?
Which makes you wonder, out of that $1.4 trillion dollars of debt racked up last year where did this money get spent if it was not spent creating or saving jobs?
All the hoopla about the stimulus bill working is nonsense for the easily duped. The government’s own data shows that the stimulus bill did not change the trajectory of unemployment one bit. This is supported by the government’s data showing skyrocketing rolls on the EUC and the fact 88+% of the job creating money is still left unspent – one year later.
This is not an anniversary to celebrate, but a memorial for time wasted and lives financially destroyed by liberal ignorance.
Update: And of course today’s weekly unemployment report showed ‘unexpected’ declines.
Update: As further proof the liberal stimulus bill based on government spending failed is the fact the Democrats are scampering around trying to pass a new one. If the old one had worked we wouldn’t need a new ‘jobs’ bill.