Jun 17 2009

The Obama-Pelosi-Reid Liberal Economic Stimulus Scheme Myth Busted

Published by at 9:25 am under Measuring The Recovery

Destroying liberal myths economic myths doesn’t get any more simple than now with the rising job losses and the failed liberal economic stimulus plan. Obama finally admitted to what people were predicting back in February – that the unemployment situation is going to get much worse in the coming months:

President Barack Obama said the U.S. unemployment rate will reach 10 percent this year, even as the economy begins to emerge from the recession.

Obama acknowledged that unemployment lines may keep growing despite government efforts to boost economic growth, saying he’s confident an expansion will begin “shortly.” His outlook mirrors the forecasts of private economists who predict a jobless rate of 10 percent — a level unseen since 1983 — by the final three months of the year.

Emphasis mine. The problem with the failed liberal economic stimulus plan cooked up by Obama, Pelosi and Reid is that they naively believed (or falsely claimed – take your pick) that the bloated federal bureaucracy could be a nimble positive force on the economy. It is, in fact, a gluttonous, ponderous drag on the economy competing with the free markets for talent, investment resources and goods and services (not to mention its requirements on paperwork and taxes).

Here is the reality as of June 5, 2009 – 4 months after the stimulus bill was rushed through Congress. In most cases, over 99% of the stimulus money HAS NOT BEEN SPENT! See the charts below for the status of stimulus spending as reported by 5 federal departments and one agency on their very own websites.

The first chart shows four sets of columns. The left most is the column of budgeted funds in the stimulus package. As can be seen, the bulk of the ’shovel ready’ jobs money was going to be inthe Departments Energy and Transportation. The middle-left columns show the amount of money that has been allocated to specific programs. The middle-right columns show the amount spent to date. The far left columns show what is unspent. 

These 5 entities make up 1/3rd of the total money planned for stimulating jobs, and each has spent less than 1% of their budget on creating jobs so far. In the next figure we show the data as a percent of the budget, with the left columns the percent of the budgeted money allocated to programs. The money can’t even begin to be competed against until it hits this stage. And once contracts are in place the second columns come into play, showing the percent of the allocated funds actually spent (creating jobs). The final set of columns show the percent unspent – basically what is stuck in the federal bureaucracy.

 

You can click both charts to enlarge. The totals and percentages for the all the money budgeted, obligated and dispersed  across these 6 entities, as of 6/5/09, are as follows:

  • $105,335,650,000 budgeted (~1/3rd total stimulus ‘job creating’ part of the stimulus)
  • $20.8 billion obligated (20% of the budgeted total)
  • ~$275 million dispersed to actual work (0.26%).

The only way to stop the job losses and turn this economy around is to just stop this failed liberal experiment and go to tax cuts. Right now every individual is paying Uncle Sam each week taxes through withholding. Same thing with every company. If the government were to cut taxes in a serious manner (not that lame $13 bucks we all got and spent at McDonalds) then that money would be going into peoples’ pockets to spend, and into companies to expand (create new jobs).

Envision a summer where more companies fail, more people line up for unemployment and assistance, more homes (read families) foreclose, more business close up. Picture this massive failure continuing into the new school year. Picture this economic mess as the center piece of  Thanksgiving dinners across this nation. Picture a disastrous Christmas season were families skimp to get buy and retail stores experience their blackest prime shopping season in decades. 

Picture all this, because that is what President Obama just admitted is going to happen. That is the Hope and Change of the failed liberal economic experiments.

Update: Reader Steve sent me this article about how the stimulus money is NOT being spent on job creation in New York:

The image of economic stimulus spending in New York so far is one of politicians in suits and hardhats posing in front of orange barrels and talking about new jobs. But so far, the stimulus spending has paid for more social services than public works.

New York state expects to spend 84 percent of its $26 billion in federal money on Medicaid, unemployment benefits, school aid, nutrition, public health programs, one-time Social Security payments, Head Start, college grants, and other social and school support.

The money is going to pad our gilded cages – not to set us free to explore and enjoy our lives.

7 responses so far

7 Responses to “The Obama-Pelosi-Reid Liberal Economic Stimulus Scheme Myth Busted”

  1. kathie says:

    As Obama said in his campaign, it’s not fair that some have little or nothing and some have too much. So he transfered the wealth of those who have (those who paid taxes), to those who have little or nothing. How is it working Obama? Have you killed the wealthy yet?

  2. WWS says:

    “New York state expects to spend 84 percent of its $26 billion in federal money on Medicaid, unemployment benefits, school aid, nutrition, public health programs, one-time Social Security payments, Head Start, college grants, and other social and school support.”

    Even the article writer misses (or avoids) the point of this list. This list – 84% of the money – will not create even ONE SINGLE JOB! Maybe they are nice things, maybe not, but they do NOT CREATE ANY JOBS! That’s the real problem with this so-called stimulus – it stimulates nothing! After all of the money from this bill is spent, what will be left to show for it? NOTHING. No growth, no jobs, NOTHING.

    And how about the spending that does go to create jobs?

    “The state awarded its first Central New York road project May 7. It’s a $5.95 million contract to replace the Bartel Road bridge over Interstate 81 in Cicero…. Maffei explained at a groundbreaking ceremony that the new bridge would be taller and wider and would accommodate pedestrians. The project is expected to employ 26 workers.”

    That’s about $230,000 per job – jobs which are gone as soon as the bridge is built. Nice.

    Gotta love the pol’s name, Maffei. Plural of ????

  3. Neo says:

    With unemployment at 9.4% and a slope that has it going up by about 0.45%/month, the idea that we might to to 10% should be fulfilled around the time the next number come out in about 3 weeks.

    Let me project (guess) that unemployment will go above 11.4%, especially if next months unemployment is 9.8% or above.

  4. Neo says:

    they naively believed (or falsely claimed – take your pick) that the bloated federal bureaucracy could be a nimble positive force on the economy.

    I think they and many economists believed that this was a physiological recession (AKA a panic) that would reverse itself when their “great minds” came on the scene, so since only their presence was required to end the recession, they spent the money not to actually stimulate the economy but rather just to satisfy themselves and their political allies.

  5. AJStrata says:

    Neo,

    Agree 100% I think they thought a little PR and all would be right.

    The left sometimes suffers from seriously naive (almost childish) thinking.

    And I too agree we could hit 10% well before the end of the calender year. Of course one has to wonder if they meant the government fiscal year, which ends in 3 months!

  6. kathie says:

    AJ….just thought I would pass this on. It doesn’t make it less stupid, but a Senator was not responsible.

    Aide rebuked for Obama e-mail
    06/17/2009 4:04:24 PM PDT · by Pinkbell · 17 replies · 374+ views
    Chicago Sun Times ^ | June 17, 2009
    A Tennessee senator’s aide has been reprimanded for an e-mail regarding President Obama sent from a statehouse account. Sherri Goforth, an aide to Sen. Diane Black (R-Gallatin), was issued a written rebuke for forwarding a picture that made light of Obama’s race. The picture showed portraits of the nation’s 44 presidents. Obama is depicted as a black box with only a pair of cartoonish white eyes visible.

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