Jun 17 2009
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:
PresidentÂ Barack ObamaÂ 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 heâ€™s confident an expansion will begin â€œshortly.â€ 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, aÂ 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.Â The left most is the column of budgeted funds in the stimulus package. As can be seen, the bulk of the â€™shovel readyâ€™ 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.Â
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.Â In the next figure we show the data as a percent of the budget, withÂ the left columns the percent of the budgeted money allocated to programs. The money canâ€™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.Â The totals and percentages for the all the money budgeted, obligated and dispersed Â across these 6 entities, as of 6/5/09, are as follows:
- $105,335,650,000 budgeted (~1/3rd total stimulus â€˜job creatingâ€™ part of the stimulus)
- $20.8Â billionÂ obligated (20% of the budgeted total)
- ~$275 millionÂ 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 Â ThanksgivingÂ 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.Â
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.