Jul 05 2009
VP Biden Admits Stimulus Bill Was Never Going To Stimulate Jobs This Year
Updates Below
Most people knew that Vice President Joe Biden would be one of President Obama’s major handicaps throughout his inexperienced administration’s first years. It’s not because Joe is incompetent, in fact he was selected to be the wise old man of experience. No, it’s because Joe has trouble shading the truth. He is no good at spin. He is a blunt, ‘tell it as it is’ type.
On Sunday, VP Joe Biden played to this role and admitted to the country that the liberals’ stimulus package passed in February was never meant to stimulate job creation until after this fall and well into next year:
Biden noted that the $787 billion economic stimulus package was set up to spend the money over 18 months. Major programs will take effect in September, including $7.5 billion for broadband Internet service, plus new money for high-speed rail and the nation’s electrical grid, he said.
More here, including the video. In the video Biden admits ‘no one’ seriously thought the stimulus package would be stimulating jobs at this time (comes in around t – 4:50 minutes). But that is of course a lie, since the administration has claimed jobs have already been created (or saved) and the predictions they put out showed the bill creating jobs almost instantaneously (see chart at end).
Later Biden promised job creation is coming now that the needed contracts are finally being put in place (t- 3.50 minutes). This is the third 3rd admission that there was no way the stimulus bill could create jobs any earlier than September, and not in any great number until after that.
There you have it – the administration’s mea culpa. They knew damn well the government bureaucracy was too sluggish to get the money out into the economy quickly. They had to rush the bill before the media exposed their little white lies.
Why did they go the long and arduous route of government spending for stimulus verses the quick and effective path of tax cuts? Biden has the answer there too, but this time it really is all about incompetence:
“We misread how bad the economy was, but we are now only about 120 days into the recovery package,” Biden added. More jobs will be created in coming months, he said.
See, the Democrats did not understand the seriousness of the problem. That is why they passed off a pork projects bill as a stimulus bill. And because they did not think the economy needed any real stimulus, they just lied through their teeth pretending, knowing all the while the money would not start coming out of the government for months – as I have been saying and showing for months!
To date, in the government organizations I am tracking, less than 1% of the money budgeted in February for job creating stimulus has been spent. That is basically zero! No wonder we keep sinking deeper into recession. All the dems have been doing so far is taxing the hell out of us and holding the money back. Sort of a stupid economic plan if you ask me.
So how bad is it, since Obama and Biden have admitted they are still clueless? One thing people need to understand is the government and its lap dog news media do not tell the complete (or sometimes honest) picture when it comes to unemployment. The data is there for people to see if you know where to look. It’s not pretty.
Here is a graph of the full unemployment picture, which is a lot worse than has been reported (click to enlarge).
These are all government data from the latest unemployment report. I just graphed them. The various reporting levels are defined as follows:
- U1 =Â Persons unemployed 15 weeks or longer, as a percent of the civilian labor force.
- U2 =Â Job losers and persons who completed temporary jobs, as a percent of the civilian labor force.
- U3 =Â Total unemployed, as a percent of the civilian labor force (official unemployment rate).
- U4 =Â Total unemployed plus discouraged workers, as a percent of the civilian labor force plus discouraged workers.
- U5 =Â Total unemployed, plus discouraged workers, plus all other marginally attached workers, as a percent of the civilian labor force plus all marginally attached workers.
- U6 =Â Total unemployed, plus all marginally attached, plus total employed part time for economic reasons, as a percent of the civilian force plus all marginally attached workers.
I have highlighted U3 (the reported number) and U6 in the graph.  U6 is the total percentage of people ‘out of work’, whether they are working part time to make ends meet or not. BTW, ‘Marginally Attached‘ is defined by the government as: “Marginally attached workers are persons who currently are neither working nor looking for work but indicate that they want and are available for a job and have looked for work sometime in the recent past. Discouraged workers, a subset of the marginally attached, have given a job-market related reason for not looking currently for a job. Persons employed part time for economic reasons are those who want and are available for full-time work but have had to settle for a part-time  schedule.”
The U6 level for June 2009 is a stunning 16.4%! And it is this high because the stimulus, as VP Joe has pointed out, has yet to kick in.
The Vice President just admitted to the nation that his administration let the economic situation get this bad because they did not take the problem seriously. Â He admitted their plan had no expectations of kicking in before September 2009. He admitted their rosy projections were almost all ‘hope’ that things would turn around on their own and they could claim credit later when the money did start flowing. This is now established and admitted fact.
The record of their failure is captured in this graph of the dems BS promises verses the tragic economic reality.
Â
It can be argued the liberal experiment by Obama-Pelosi-Reid actually made things worse, since the expected path without a stimulus bill would be better than what we ended up with!
Joe, this is not some marginal mistake of judgement, this is a royal screw up which deserves to be answered by the cleaning out of Congress with competent, new people.
Update: Bruce Bartlett and Paul Krugman join the confessional chorus today in admitting there never was an intent to stem the job losses until later this year. Krugman, however, still seems to have problems reading graphs and doing simple math. He tries to use the graph above to note:
The predicted impact from the stimulus is indicated by the difference between these two curves. We’re now at the very beginning of 2009Q3; they predicted that the unemployment rate right now would be only a fraction of a percent lower now than it would otherwise be. The impact wasn’t supposed to be really noticeable until late this year, and wasn’t supposed to peak until late 2010.
A fraction lower does mean the stimulus plan was to have taken effect – at least that is what the Democrats implied. Check Obama’s speech after passage and all the uses of the word ‘now’ for confirmation:
“Earlier this week, I signed into law the American Recovery and Reinvestment Act – the most sweeping economic recovery plan in history. Because of this plan, three and a half million Americans will now go to work doing the work that America needs done.
Because of what we did together, there will now be shovels in the ground, cranes in the air, and workers rebuilding our crumbling roads and bridges, and repairing our faulty levees and dams.Â
Krugman is being dishonest as he calls for more of the same failures. In fact, you can look at the chart and SEE that the Democrats were banking on the economy turning itself around because the delta for the supposed plan happens well before the stimulus passed (if Q109 is January). Maybe people should have read the fine print – ya think?
Krugman should note we are now 2% points higher than the plan predicted, not some fraction of a percent.
Then there is Bartlett, who just comes out and admits the lie:
The problem is that the Obama administration was much too optimistic about how quickly stimulus spending would affect the economy. Christina Romer, chair of the Council of Economic Advisers, and Jared Bernstein, chief economist to vice president Joe Biden, forecast in January that the stimulus would reduce unemployment almost immediately.
The forecast also showed the unemployment rate peaking at 8 per cent with the stimulus and 9 per cent without. Obviously this was wrong. Yet it would be incorrect to conclude that the stimulus was doomed to failure, as many Republicans and conservative economists argued.
I don’t have to argue facts dude. I am simply showing the promises verses the results. I mean Bartlett is so poor at this he thinks the government creates money out of thin air (and I am not talking printing it):
Tax cuts and government transfers are slow to have an effect and have a low multiplier, raising GDP less than $1 for every $1 increase in the deficit even when fully effective after two years.
By contrast, government purchases stimulate growth much more quickly and have a higher multiplier, raising GDP by $1.57 for every $1 spent. Unfortunately, the low-impact spending has been the fastest to come online while the high-impact spending is dribbling out very slowly.
Got that? Tax cuts are slow, but spending is slower? and how does the government create a $1.57 for every dollar spent when it is chews up 40% of the dollar in wasted overhead? The guy is mathematically certifiable.
I am exposing the lies sold the America when everyone on the left said we needed to rush this through without debate. This is the Democrats’ mess and they deserve all the credit for its failure.
Ronald Reagan said something very appropriate.
“A recession is when your neighbor loses his job. A depression is when you lose your job. And a recovery is when Jimmy Carter loses HIS job.”
The principle is still true. Want a recovery? Sack the Democrats.
I recommend that everyone read Amity Shlaes book The Forgotten Man. It is an updated retelling of the Great Depression. No one gets all the blame or all the credit, but reading the book makes plain that the New Deal did not fix things.
Somethings that came out of the New Deal helped, such as banking reforms…but a lot of the make work projects actually hurt.
It is a good book and begins in the years leading up the Depression and includes the rise of the Soviets and the effect their revolution had on the left..very informative.
After reading it I have to wonder how much good these kinds of programs will really do.
This trillion dollar package was nothing more then a give away to Democratic special interests, mostly low income or those who have periodically worked. To poor areas of the cities. Yes it gave to the unemployed and to help those who lost their jobs have medical insurance. But any stimulus bill would have had to help the unemployed. Don’t forget the $33 billion to enhance the SCRIPS program, and others that I can’t even remember. And this weekend a bridge falls down? These guys in Washington are crazy and as usual Obama tells us he has never had to budget his own money or set priorities.
He leapt into closing Gitmo before he had a plan. He spent a trillion before he understood what was happening to the economy. Now he wants us to believe passing cap and trade and public medical insurance are going to create jobs. What a crock.
Any smart person would first have written banking rules so that this problem wouldn’t happen again. Then they would have cut the federal budget to bear bones. And then bullied the States to do the same. American’s would then have had confidence that we were heading in the right direction. Then if a stimulus was needed he should have instructed congress that the bill could not have one pork project. EVERYTHING OBAMA HAS DONE SCARES US TO DEATH. We will spend the next 4 years in this mess……you can take that to the bank.
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[…] man of experience. No, it’s because Joe has trouble shading the truth. He is no good at spin VP Biden Admits Stimulus Bill Was Never Going To Stimulate Jobs This Year – strata-sphere.com 07/05/2009 Most people knew that Vice President Joe Biden would be one of […]
Biden and everyone else misses the point of why it was so critical to get the stimulus right the first time. The *real* danger which called for a stimulus was that we didn’t dare let unemployment go over 10%, because that’s about the point where the negative reinforcement becomes self sustaining and a decade long disaster would be inevitable.
By passing a false “stimulus” which actually did nothing to stop the decline when it still could be stopped, this government has guaranteed economic disaster. There is no point to a “second stimulus”, which Krugman wants. It also now doesn’t matter that the first “stimulus” is going to begin to spend money. It is too late for the damage to be stopped – it is akin to adding plasma to an accident victim after he’s bled to death. And really, how many jobs are going to be created by “broadband internet access”? Sure, it’s a nice idea, but seriously, is that the kind of thing that is going to make even one job? Productive people already have such a thing – and unemployed people are not going to be helped by it. The so-called “stimulus” is nothing but a pile of these jobless giveaways piled on top of each other.
What’s worse, any attempt at a second stimulus will bust the dollar, spike interest rates, and cause for more economic damage than it helps.
We are on a nose dive into an economic black hole, and there is now no way out.
The Rasmussen president tracking poll is now negative for every day
last week. But I wonder about Mrs. Palin.
I have read some things that say she has committed suicide and
other things say she will really fight now. But I think a lot of people
who vote, and I mean a lot don’t read blogs or the newspapers or
even watch TV news.
These kind of voters will be easy to tell that Mrs. Palin is a “quitter”
and the charge will stick.
I guess she could answer back that she has more experience than
the Obama had when he was elected, but I do not think
that will win the argument.
What will happen for her?
The “misreading of just how bad an economy we inherited” will setup things for the “misreading of just how expense Obama-care would be”, so moderates can cover their a$$es later when they simply lie about the costs now.
[…] VP Biden Admits Stimulus Bill Was Never Going To Stimulate Jobs This Year […]
OK–so who needs more proof that the Democrats are completely incompetent and corrupt—and their cronies across the aisle are no better, although they do put up a stink when cornered.
This government is so broken that the best course of action would be to not allow them back into Congress after their next recess. A mob should descend on Washington and exercising their first and second amendment rights, prevent the returning miscreants from entering. Give them the choice of going home or to G Bay. Then tell each state to send new representatives—one teacher, one doctor, one nurse, one construction worker and yes even one lawyer and so on and so on, until a truly representative government is formed. They can then use the newly crafted legislation to see what is good and what is bad and enact responsible and responsive legislation. And then hold trials for all the former congress critters for gross negligence at a minimum.
Unfortunately, this country is too focused on making a freak pedophile into a saint.
I don’t know how bad the economy is going to get, but I know for sure that there is a CRISIS OF CONFIDENCE. You can blame the whole thing on Bush, the down turn that happened between September 2008 and January 2009, not that I do, but you can. But it is the policies that Obama has offered that caused the crisis. From the Stimulus spending, to nationalized health care, cap and trade, the budget passed to finish out the year, and the volumes of other money promised to the many. Not to mention the decision to close Gitmo before there was a plan. He keeps leaping, hurrying, condemning, taking over, with out fixing the fundamentals, and telling us that everything is going to be ok, jobs are coming. It will not happen, human nature says if you have anything left, hunker down, withdraw, and protect.
No business person in their right mind would expand or hire, no citizen should spend a penny on a credit card that can’t be paid off at the end of the month.
If his monetary policies aren’t crazy enough, the guy can’t decide who is a friend and who is a foe. He must believe the talking heads, that every problem we have internationally is the fault of Bush, so Obama does the opposite. I feel like I’m going crazy, trying to figure out who this guy our President is.
Do any of the writers on the left think Obama is crazy?
There will be no second “stimulus” bill because there is no money. It is gone. The treasury is empty. And it is worse than empty because now with higher unemployment, more people are going on Social Security retirement years earlier than they had planned. This means that the social security shortfall must be made up by congress … in cash … when the social security administration presents bonds from the trust fund for redemption.
So in years past the government could run a deficit and make up the difference by mostly borrowing from the Social Security surplus. They can’t do that anymore. Now they need to hit the credit markets for ALL their deficit PLUS the amount needed to make Social Security solvent. Social Security has gone negative cash flow two decades earlier than expected.
We are in a heap of trouble but it apparently still hasn’t hit home yet. It will in about 5 more months.
Uh, oh. We might be looking at 14% unemployment within a year.
[…] The Democrats decided on a faux stimulus plan. They would yack up how great it was, expecting the recession to be at its peak and turning around normally (many recessions would have by now), but pass a bunch of pork and pet projects. To get the people used to the idea of government intervention and assistance. Paving the way for the take over of health care and taxing energy into oblivion. That was the plan, at least from what we can tell from what the VP said last weekend. […]
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