May 21 2009
I am swamped at work and awaiting the new state wide unemployment numbers (which should come out tomorrow while I am traveling), but we are already getting a horrid glimpse at the ever bleak economic situation. First, I want to refer to a report that was put out in January of this year explaining the benefits we would reap if we rushed to bankrupt our nation under the Obama-Pelosi-Reid stimulus plan (you can click the chart to enlarge):
(note: the graph was referenced a while back by one of our readers and I assume was created by someone over at Hot Air – sorry can’t find the original comment!)
As anyone can see the Obama-Pelosi-Reid liberal fantasy has turned out to be more leftwing snake oil. The stimulus plan was advertised as being able to stop the economic downturn and stem the tide of job losses. It has failed miserably. As the actual jobless numbers indicate, we would have been here without all the bankrupt mad spending by the liberals.
And as I have predicted many times before, this will continue to get worse because the federal government is too lethargic and bloated on bureaucracy to do rapid economic stimulus. The Â following chart shows the fact that – as of the end of April – none of the stimulus money is getting out of the constipated federal government (which is taking its overhead cut without Â a doubt:
The graph shows the status of 1/3rd of the stimulus money managed by 5 Federal Departments and 1 Agency (NASA). The left columns show the money budgeted to stimulus for each. The middle columns show the money obligated to programs or projects. The last column shows the amount of money going to create jobs. In terms of percentages of the budgeted amount moving through the government processes, the news is not good:
- $105.336 billion as been budgeted (left columns)
- So far $12.739 billion as been obligated to programs and projects (12.1%)Â (middleÂ columns)
- Only $0.031 billion has gone into the economy to create jobs (right columns)
There is no way to squeeze the money out of the federal carcass in time to stop the job losses. And now some elements of the political industrial complex (pols, media elites, power brokers and DC bureaucrats) are starting to tell the truth. According to the CBO, the job picture is not going to get any better until next year – at the EARLIEST!
The U.S. economy will likely start growing again in the second half of this year but unemployment will likely keep rising through 2010 to peak over 10 percent, the Congressional Budget Office said on Thursday.
“The growth in output later this year and next year is likely to be sufficiently weak that the unemployment rate will probably continue to rise into the second half of next year and peak above 10 percent,” CBO Director Douglas Elmendorf said in prepared testimony to the U.S. House Budget Committee.
That means the Obama-Pelosi-Reid economic disaster will continue through this summer, this fall, this Christmas season, the spring and into the early days of the federal election cycle of 2010. I expect to see a voter mood shift from benign support to outrage as these months of painful unemployment march by. And in some key regions, 10% unemployment will be looking pretty damn nice.
For example: Michigan (home of the US Auto Industry) is already pushing 13% unemployment:
Michigan’s unemployment rate rose to 12.9 percent in April, its highest mark since late 1983.
The state said Wednesday that Michigan’s seasonally adjusted jobless rate was pushed up by large job losses in manufacturing and construction.
Wait until the auto market hits come in. I firmly believe the hot button issue for this year going to be jobs, and answering the question of why we did not lower taxes to rapidly stimulate the economy and allow for more job creation. Stimulating economic growth and job creation through reduced taxes is not a theory – it has been demonstrated by John Kennedy, Ronald Reagan and George W Bush.
What was a fantasy is to look at that Obama-Pelosi-Reid chart and the amount of fantasy that went into it. The chart shows near instantaneous stimulus through government ‘shovel ready’ programs. As we now know that was not only unrealistic, it was naive. These people know more than anyone how long it takes to move money into action through the bureaucracy. They built the damn thing up to be sluggish and ponderous. They basically lied about what would happen – they knew what that graph showed was impossible.