Apr 28 2010

Economy Improves, But Not Because Of Deficit Spending Spree By Democrats

The economy is finally starting to show small signs of improvement, but a recent study illustrates this is not due to the mad deficit spending of the Democrats in Congress & the White House:

The recovery is picking up steam as employers boost payrolls, but economists think the government’s stimulus package and jobs bill had little to do with the rebound, according to a survey released Monday.

In latest quarterly survey by the National Association for Business Economics, the index that measures employment showed job growth for the first time in two years — but a majority of respondents felt the fiscal stimulus had no impact.

This of course makes perfect sense. A vast majority of the ‘shovel ready’ stimulus money is still stuck in the bowels of the bloated federal bureaucracy:

As of the end of March, the government has made huge progress on the obligation front, as can be seen in the following charts (click to enlarge). 67.5% of the budgeted funds for these 6 organizations has been assigned projects. NASA has obligated 85% of its budget, Department of Transportation comes in second with 79%.

The first chart shows the actual dollar values for (moving left to right) the budgeted value, the amount obligated, the amount spent and the amount left unspent. The second chart converts the last three columns into percent of the budget (first column). But the government is failing miserably in the ’spending on actual jobs’ front. Only 14.2% of the $105 billion budgeted for these 6 government organizations has been spent since the stimulus bill passed over a year ago, leaving 85% doing nothing.

Moreover, the money has been spent on short term, do-nothing projects like dog parks, bike parks, etc. Unlike across the board tax cuts and spending cuts by the government – proven to work by Presidents Kennedy, Reagan and W Bush – which immediately free up money to invest and grow the economy, the liberal sugar daddy plan has been a failure. It also only went to companies capable of performing government contracts and following government contracting laws – which is actually not a large number of companies when you look at the entire economy. Further, the money was limited to unionized companies, further reducing its effect.

We spent our children’s future and got nothing in return but another lesson why liberal fantasies only make things worse, not better.

Which explains a couple of recent polls quite nicely. It is 1994 all over again – and probably worse. First from Gallup (click to enlarge):

Note the ‘enthusiastic’ voters run 20% points in favor of the GOP (basically anyone but the Dems).  This is NJ, VA and MA all over again. “Enthusiasm” = a strong need to throw everyone out of DC and start cutting back on the federal cancer invading everyone’s lives and ability to pursue their life of liberty and happiness.

But the GOP is not gaining in the current mood, it is simply hoped by voting out the Dems the new faces will do what the people want, and start dismantling the out of control federal behemoth. If the GOP had been seen as participating in this year of liberal madness, they too would be feeling the anti-incumbent heat

A third of registered voters are inclined to reelect their representatives in Congress, the fewest since the Republican Party rode voter discontent to control of the House and Senate 16 years ago, according to a new ABC News-Washington Post poll.

Nearly six in 10 said they’ll instead look for someone new come the fall elections.

I do believe the libertarian streak that runs deep across the entire conservative spectrum is what held the GOP coalition together (along with some defections from the Dems). So it was not pure political posturing that led the GOP to stay on the right side of history. But they too will be tested to make sure they follow that libertarian thrust and pull back government to its proper role and size, and allow the people to run America.

12 responses so far

12 Responses to “Economy Improves, But Not Because Of Deficit Spending Spree By Democrats”

  1. [...] This post was mentioned on Twitter by Adam Baldwin, AJ Strata. AJ Strata said: new: Economy Improves, But Not Because Of Deficit Spending Spree By Democrats http://strata-sphere.com/blog/index.php/archives/13269 [...]

  2. WWS says:

    “If the GOP had been seen as participating in this year of liberal madness, they too would be feeling the anti-incumbent heat.”

    This is almost certainly why “moderate” Senator Bob Bennett, R-Utah, is on the verge of being bounced out of office by his own party. (virtually unheard of for a sitting Senator) If he doesn’t get enough votes from the delegates in two weeks, he won’t even make the primary runoff which comes later in the year.

    His biggest sin? (besides doing next to nothing at all but collecting a salary and keeping a chair warm for the last 18 years) He proposed his own health care bill which included the Health Mandate, the most constitutionally suspect portion of the Dem’s health care bill. This was never meant to be a lifetime office – when someone gets out of touch with his constituents, it’s their duty to give him the boot no matter what party he’s in.

    Charlie Crist is learning the same lesson.

  3. AJ,

    How people feel unemployment is far more important to informing their votes than how government unemployment and economic statistics are spun.

    “It’s the jobs, stupid.”

    Unemployment over 9.2% in August 2010 is cave in time for Democrats in November 2010.

    The bottom line is Small Business won’t be hiring this year and neither the Federal Government nor Big Business sectors are big enough to take up that slack in jobs left by the Small Business strike.

    What we are seeing in the economy right now is Small Business and Big Capital moving forward as much 2011 demand as possible to avoid paying taxes due to the the expiration of the Bush Tax Rate cuts.

    Then the bottom really falls out on the U.S. economy.

    Riddle me this AJ, who is going to provide the jobs between now and Nov 2010?

    The very small black small business class is nothing but an appendage of the government contractor system via the SBA and minority set asides.

    The rest of the Small business community is not hiring.

    Every policy initiative pushed by the Obama Administration has convinced Small buiness and Big Capital to hide their capital and effort while he is in office.

    The Federal Census starts mass lay offs in August 2010 because the Federal fiscal year ends 31 September 2010.

    So who will fill those job voids?

    Orders of magnitude mean things.

    This is a 300 million person, $5 trillion a year, economy, an information age economy.

    Policy incentives — whose impact are fully dissected and distributed to small business owners in days due to the internet — that make 5 million small businesses not hire one more person each this year, matter a great deal more for the voters in November 2010 than $300 billion in “walking around money” thrown at public employee unions in the six months before the 2010 election.

    Between the cost of extended unemployment benefits and new health care mandates, Small Businesses are not going to hire any new full time employees and they will dismiss their part timers at the end of the year to avoid health care mandates.

    Where they can, small businesses are already moving to their homes from store fronts, to independent contractors and to barter for services too avoid tax liabilities.

    This is showing up in the decreasing income taxes at all levels and in the decline in state and local sales & property tax revenue.

  4. WWS says:

    Another “Centrist” is about to show his true colors tomorrow:

    “Fox News has learned that Charlie Crist has decided and plans to announce that he is running as an Independent for the U.S. Senate. The official announcement is scheduled at 5pm in St. Petersburg, Florida tomorrow.”

    http://gretawire.blogs.foxnews.com/governor-crist-news/

    After 24 years of raising money and claiming to be a Republican, he turns his back on them the instant it looks like his own personal career goals might take a hit. Another Arlen Specter. And this in spite of the fact that as recently as last month he swore he would never do such a thing. Well, good news is that not only is he NOT going to win a 3 way race, this should kill his public career forever. The more men like him who can be driven from public office for good, the better.

    And Crist points up my whole problem with the idea that “centrism” is a viable political stance. In liberal leaning states like Massachusetts, okay, I can see it, that’s the best you can get. But in solid conservative states like Florida and many others “Centrism” is simply the set of lies that liberals tell conservative voters to try and make themselves electable. (Funny, I never see any conservatives lying about their positions in order to try and trick liberal voters. Wonder why that is.)

    In a conservative state, it’s a safe bet that any “Centrist” is in fact a liberal who lies shamelessly about what he really believes and who thus can never be trusted. “Compromise” to these men is simply a code word for selling out all the people who trusted you, which they do at the drop of a hat just before they laugh about it. (reference Bert Stupak partying with the House leadership after he sold out on the health bill)

    Charlie Crist is proving my point for me as we speak.

  5. ivehadit says:

    Crist thinks he’s gonna be like the Brit, Klegg, attack both parties.
    Not gonna work, Charlie. We know you!

  6. BarbaraS says:

    The stimulus was never meant to create jobs. Some of the dims admitted this. It was all to pay off supporters and cronies and to bankrupt the country so that Obama could implement his crisises at opportune times.

    The stimulus was also meant to buy the votes of the crooked and greedy in congress to pass Obama’s anti USA bills. This was shown over and over again.

    If the people of this country don’t know by now that dims wreck the economy every time they are in charge, they never will after this debacle. Just look at GW Bush’s record on the economy after 911. Not only were we entering a recession but a good bit of the financial centers were destroyed in the twin towers. He rallied the people and the economy was good until the GSEs failed which was the fault of the dims and very opportune to the election. I think the dims manuevered this fall and bit off more than they could chew. Of course, the MSN reported the economy was bad but had no example to show us. They just repeated this lie over and over even though the gdp was in the black.

  7. BarbaraS says:

    I don’t live in Florida but Charlie Crist turned me off when I saw him hug Obama. I don’t care for republicans who cozy up to liberal traitors.

  8. kathie says:

    The only good thing so far is that the stock market is rebounding some what. State governments have blown through the stimulus or jobs money, and now they are going to have to let thousands of employees go. Maybe that’s a good thing too. The Feds are going to hire 700,000 census workers, Biden bragged the other day that the economy would start employing 200,000 a month, however he didn’t mention that he knew this fact because it was the Feds hiring for a temporary jobs program.

    The Dems don’t know what to do next to kill jobs. The oil explosion and the mine disaster make cap and trade so tempting, but then you have another crisis with the immigration bill just passed in Arizona. Obama thinks that Wall Streeters have earned enough, so maybe the Senate this week will kill Wall Street.

    If we get out of this mess we will beable to thank the character of the American people, accomplishing something inspite of Obama.

  9. ivehadit says:

    Barbara you are right on. Fifty-four quarters of record growth after the 9/11 attack. But, we all know that this group in the WH now know EXACTLY what they are doing and it has nothing to do with producing 54 quarters of record growth….quite the contrary, imho.
    Cloward and Piven must be proud and ecstatic with their progress.

    As I have said, don’t say we weren’t warned about ALL of this….highway robbery aka income and wealth redistribution.

    Did you all hear obama today, talking about the American way is to keep making money, lots of money…like it was distasteful to him.

    Just as a soothing reminder, his power is on loan.

  10. Fai Mao says:

    The final nail in the coffin could come from China.

    China has built its prosperity on cheap labor and an underpriced RMB and deficit spending.

    In doing this they have actually made a lot of Chinese rther wealthy and they have become wealthier investing the the Chinese stock and property markets. I have attended some investing seminars in Shanghai and Hong Kong where the brokerage says that a long term investment (The point where you double your money) is 2 1/2 years. A short term investment is 60 to 90 days and 90 days to two-years is medium term. Lots of Chinese are invested in EXTREMELY speculative ways that are only posible because of corrupt government officials and worse, incompetant officials. The people here are total knaves inthat they don’t think they will ever lose money because they actually believe the government propaganda

    For example I know an academic in Shanghai who owns a flat. He took out a second mortage on the flat to invest. He then went to a third bank and took out a third mortage for the full value of the flat to invest yet more in stocks. He has the entire value of his flat mortagaed 5 times! They are not suppossed to be able to do this. Yet a little “Tea Money” slipped to the loan officer and cadres allows it to happen. When the stock and propert markets fall in China the entire economy is going implode.

    At that point the PRC will have to cash in its US treasury bonds and wiill not be able to buy more. You want to see ugly? wait unti the US has to raise the yeild on treasury bonds to get others to buy them.

  11. WWS says:

    Fai Mao, that’s even worse than I imagined. But not entirely unexpected; the greatest book on financial bubbles is “Extraordinary popular delusions and the Madness of Crowds” by Dr. Charles McKay in 1841. No kidding – look it up and you will find that it is still the #1 reference work on financial bubbles – a very entertaining read, too.

    Amazingly, everything that has happened in the 170 years since that book was published have only served to confirm what he observed. The same old patterns keep getting repeated, because they are essential parts of human nature. What he writes about Dutch Tulipmania and the South Sea bubble is exactly what happened in the 1929 stock market, what happened in the 2007 housing market, and describes exactly what you are seeing in the Chinese real estate market.

    And *ALL* of these bubbles end the same way – there are no exceptions, because it’s human nature to *always* push a system like this until it breaks. We can’t help ourselves.

    What’s scary is to read how fast and how total the collapse is when it finally comes. I suggest getting away from soft assets and putting as much into gold as you can, and in a way that the government cannot confiscate it from you.

    Sometime in the next 5 years, those flats in China are going to be selling at 10 cents on today’s inflation adjusted renminbi, and buyers will still be hard to find. That’s always the end game for the great bubbles, and this may be the greatest ever.

  12. stevevvs says:

    I’ve been studying Austrian Economic the last several months. The Austrians predicted this economic meltdown correctly, and many were predicting it by 2005. Once I started studying their predictions, I started reading their books. A brilliant bunch let me tell you.

    But the Austrians don’t see this period as a recovery, but a calm before the real storm. I tend to agree. We are in another bubble, and it’s just waiting for a pin.

    I’ve been were impressed with the writings of F.A. Hayek [The Road to Serfdom], Murry Rothbard [The Case Against the Fed], Henry Hazlitt [Economics in One Lesson], Peter Schiff [Crash Proof 2.0], Edwin W. Kemmerer [Gold and the Gold Standard], Charles Goyette [The Dollar Meltdown], Thomas Woods [Meltdown], Ron Paul [End the Fed], Lew Rockwell [The Economics of Liberty], Thomas Dilorenzo [Hamilton's Curse], and Ludwig Von Mises [Human Action], all have taught me a lot I wish I’d known earlier in life.

    They all recommend purchasing Gold and Silver, and predict a fall of the U.S. Economy, the only question is when it will happen.

    It’s a shame how our Public Education System doesn’t teach proper economics. My eyes and ears are wide open now.

    And it’s a shame we left our Founds Vision of a Limited Federal Government slip away. Everything the Congress can do without ammending the Constitution is listed in Article 1, Section 8.

    Yet look where we are today. Program after program, agency after agency, Department after Department, layer after layer of Federal interference in the rights of the people and the States.

    Everything has been artificialy proped up for decades, and nothing is ever allowed to reset itself in the free market. And all this printing of Fiat Money over the decades has given us tons of inflation.

    Well, I gotta go, busy day. Hope all is well with you folks, take care.