Why the Obama Stimulus Failed

[JSM]

Why the Obama Stimulus Failed
Today, President Barack Obama will attend a groundbreaking ceremony in
Holland, Mich., for a South Korean-owned factory that will make
batteries for electric cars. The purpose of the trip is to highlight
the "success" of the President's $862 billion economic stimulus
package which the White House claimed yesterday has already "saved or
created" 3 million jobs. Specifically, this factory is being
subsidized by $151 million of stimulus funds from an even larger $2
billion honey pot of stimulus money set aside for electric car battery
investments. This one plant is expected to employ 300 workers. That
works out to more than $500,000 per job created. $500,000 per job.
This plant, in a nutshell, explains why the President's stimulus plan
has been an objective failure.

The American people know the President's stimulus has failed. A new
CBS poll out today shows that 74 percent of Americans believe the
Obama stimulus either damaged the economy or had no effect. And a
Washington Post poll released Tuesday again showed that a majority of
Americans disapprove of President Obama’s handling of the economy. So
how on earth can the White House claim they "saved or created" 3
million jobs? By rerunning the same economic models that predicted the
stimulus would prevent unemployment from ever rising above 8%. That's
right. The White House's 3 million jobs number is not based on any
real world data.

So what does the actual objective real world data show? When the
President first began selling his stimulus plan to the American people
in November 2008, he promised it would create 2.5 million jobs. But as
employment fell at the end of 2008, President-elect Obama increased
his employment promise by one million to 3.5 millions jobs created. At
the time, employment stood at about 135.1 million. Using these two
data points, one can objectively establish the Obama jobs target for
December 2010 at 138.6 million. Fast forward to July 2010 and the
latest jobs report shows total U.S. employment at almost 130.5
million. This means President Obama's stimulus has failed to meet its
own standard for success by 7.4 million jobs.

Why has the President's $862 billion stimulus failed by 7.4 million
jobs? Because government spending does not stimulate economic growth.
All it does is move resources away from one sector of the economy to
another. And government has a horrible track record at efficiently
allocating resources. All that really happens is that, on net, jobs
get destroyed in the transfer process.

That brings us back to Holland, Michigan. Maybe this new battery plant
is worth investing millions of dollars in. Maybe it will eventually
turn a profit. But maybe not. The issue is, "Why is this any of the
government's business?" We used to be a capitalist country. We're
supposed to have vibrant capital markets that make these decisions
using market principles. Instead we have the Obama administration
acting as a venture capital fund picking winners and losers not based
on economics, but on political priorities (in this case global
warming).

And this is where the President's war on the rule of law and audacious
domestic agenda come into play. The White House claimed yesterday that
the Obama stimulus has encouraged $280 billion in private sector
spending. The facts do not support this. In reality annual private
fixed nonresidential investment has fallen by $327 billion since the
recession started— a 19 percent drop. Businesses are not investing
because of the vast economic uncertainties the Obama administration is
creating.

Will secured creditor contracts be honored in court? Or will the Obama
administration rip up those contracts? How much does it cost to hire a
new employee? No one will know until thousands of pages of Obamacare
regulations emanate from the IRS and HHS. How much will energy cost?
That depends on how draconian the Obama EPA global warming regulations
are. What are the rules for financial markets? You better have the
cash for an army of good lawyers, because the 2,300-page Dodd-Frank
bill touches every aspect of financial markets and requires 243 new
rule-makings by 11 different federal agencies.

The Obama administration's massive spending and regulatory expansion
is not helping economic recovery. It is actively thwarting it.

[gb]

On Thu, 15 Jul 2010 10:10:51 -0700 (PDT), JSM <ekrubmeg@**********>
wrote:

>Why the Obama Stimulus Failed

It didn't.

[slide trombone]

On Jul 15, 10:12*am, gb <g...@amusenet.com> wrote:
> On Thu, 15 Jul 2010 10:10:51 -0700 (PDT), JSM <ekrub...@**********>
> wrote:
>
> >Why the Obama Stimulus Failed
>
> It didn't.

Yes it did.

[slide trombone]

On Jul 15, 12:34*pm, Bob LeChevalier <loj...@lojban.org> wrote:
> JSM <ekrub...@**********> wrote:
> >Why the Obama Stimulus Failed
>
> It didn't fail.
>
> >Today, President Barack Obama will attend a groundbreaking ceremony in
> >Holland, Mich., for a South Korean-owned factory that will make
> >batteries for electric cars. The purpose of the trip is to highlight
> >the "success" of the President's $862 billion economic stimulus
> >package which the White House claimed yesterday has already "saved or
> >created" 3 million jobs. Specifically, this factory is being
> >subsidized by $151 million of stimulus funds from an even larger $2
> >billion honey pot of stimulus money set aside for electric car battery
> >investments. This one plant is expected to employ 300 workers. That
> >works out to more than $500,000 per job created. $500,000 per job.
>
> Which isn't so expensive, if the factory stays open for 40 years, not
> an unreasonable amount of time for a factory to operate. *Furthermore,
> the plant will use products from other companies, and those companies
> will thus be hiring more people. *And the employees will spend money,
> which will result in more economic activity, and more employees.
>
> Microsoft has $60 billion revenue per year, and supports 93000
> employees worldwide. *This amounts to $650K per employee, and most
> people consider Microsoft a reasonably sound investment, and a general
> benefit to the economy.

Does Microsooft's revenue come from being productive and selling
things others want to buy, or do they just get $60B from the
government?

[Lobby Dosser]

"gb" <gb@amusenet.com> wrote in message
news:gcgu369ju84lkh35kklrpkma27nvi96ds3@********...
> On Thu, 15 Jul 2010 10:10:51 -0700 (PDT), JSM <ekrubmeg@**********>
> wrote:
>
>>Why the Obama Stimulus Failed
>
> It didn't.

Yeah, it did.

[Lobby Dosser]

"Bob LeChevalier" <lojbab@lojban.org> wrote in message
news:cgnu36dhql20i1mmg9c13s58t2o7mvllbf@********...
> JSM <ekrubmeg@**********> wrote:
>>Why the Obama Stimulus Failed
>
> It didn't fail.
>

Yeah, it did. Unemployment is still 17-20%.

[Lobby Dosser]

"Bob LeChevalier" <lojbab@lojban.org> wrote in message
news:cm4v365j4ok3ja82qj96eosvvpj521m1ke@********...
> "Sancho Panza" <otterpower@x***********m> wrote:
>>"Bob LeChevalier" <lojbab@lojban.org> wrote in message
>>news:cgnu36dhql20i1mmg9c13s58t2o7mvllbf@********. ..
>>> JSM <ekrubmeg@**********> wrote:
>>>>Why the Obama Stimulus Failed
>>>
>>> It didn't fail.
>>
>>What is the unemployment rate?
>
> Officially, 9.5%,
BZZZZZZZZZZZZZZZZZZZZZZZZZZZZTTT!! 17-20% adjusted for REALITY!!

> far lower than it would have been with no stimulus.

Prove it!

[slide trombone]

On Jul 16, 2:23*am, Bob LeChevalier <loj...@lojban.org> wrote:
> slide trombone <boomer_the_...@my-deja.com> wrote:
> >> > "slide trombone" <boomer_the_...@my-deja.com> wrote in message
> >> >news:548d2259-4f74-4f4a-a131-43e0ac78e3dc@k1g2000prl.************.com....
> >> >>On Jul 15, 4:04 pm, Bob LeChevalier <loj...@lojban.org> wrote:
>
> >> >>> Officially, 9.5%, far lower than it would have been with no stimulus.
>
> >> >>But far higher than it would have been if the money had used for tax
> >> >>cuts.
>
> >> > Baloney. *Employment stagnated under Bush with the tax cuts.
>
> >> Sauce Goose Gander
>
> >Bush's tax cuts saved or created 45 million jobs.
>
> Try that again
>
> ftp://ftp.bls.gov/pub/suppl/empsit.ceseeb1.txt
> <B-1. Employees on nonfarm payrolls
> < 2000..... 131,785
> < 2001..... 131,826 *
> < 2002..... 130,341
> < 2003..... 129,999
> < 2004..... 131,435 *
> < 2005..... 133,703
> < 2006..... 136,086
> < 2007..... 137,598
> < 2008..... 136,790
>
> The first tax cut, in 2001, saw a drop in employment over the next 2
> years. *The second tax cut, in 2003, saw employment increasing, but it
> took 2 years to get back to where it was in 2000. *And that wasn't due
> to the tax cut, but rather to the enormous increase in spending for
> the war.

Did Obama's stimulus see a drop in employment? Did it also "save and
create" jobs?

Seems you work off two standards based on you ideology.

[Bill Shatzer]

Bob LeChevalier wrote:

> slide trombone <boomer_the_cat@my-deja.com> wrote:
>
>>>>"slide trombone" <boomer_the_...@my-deja.com> wrote in message
>>>>news:548d2259-4f74-4f4a-a131-43e0ac78e3dc@k1g2000prl.************.com...
>>>>
>>>>>On Jul 15, 4:04 pm, Bob LeChevalier <loj...@lojban.org> wrote:
>>>
>>>>>>Officially, 9.5%, far lower than it would have been with no stimulus.
>>>
>>>>>But far higher than it would have been if the money had used for tax
>>>>>cuts.
>>>
>>>>Baloney. Employment stagnated under Bush with the tax cuts.
>>>
>>>Sauce Goose Gander
>>
>>Bush's tax cuts saved or created 45 million jobs.
>
>
> Try that again
>
> ftp://ftp.bls.gov/pub/suppl/empsit.ceseeb1.txt
> <B-1. Employees on nonfarm payrolls
> < 2000..... 131,785
> < 2001..... 131,826
> < 2002..... 130,341
> < 2003..... 129,999
> < 2004..... 131,435
> < 2005..... 133,703
> < 2006..... 136,086
> < 2007..... 137,598
> < 2008..... 136,790
>
> The first tax cut, in 2001, saw a drop in employment over the next 2
> years. The second tax cut, in 2003, saw employment increasing, but it
> took 2 years to get back to where it was in 2000. And that wasn't due
> to the tax cut, but rather to the enormous increase in spending for
> the war.

Don't confuse him with facts. His mind (such as it is) is already made up.

peace and justice,

[slide trombone]

On Jul 16, 1:08*pm, Bob LeChevalier <loj...@lojban.org> wrote:
> slide trombone <boomer_the_...@my-deja.com> wrote:
> >> >Bush's tax cuts saved or created 45 million jobs.
>
> >> Try that again
>
> >>ftp://ftp.bls.gov/pub/suppl/empsit.ceseeb1.txt
> >> <B-1. Employees on nonfarm payrolls
> >> < 2000..... 131,785
> >> < 2001..... 131,826 *
> >> < 2002..... 130,341
> >> < 2003..... 129,999
> >> < 2004..... 131,435 *
> >> < 2005..... 133,703
> >> < 2006..... 136,086
> >> < 2007..... 137,598
> >> < 2008..... 136,790
>
> >> The first tax cut, in 2001, saw a drop in employment over the next 2
> >> years. *The second tax cut, in 2003, saw employment increasing, but it
> >> took 2 years to get back to where it was in 2000. *And that wasn't due
> >> to the tax cut, but rather to the enormous increase in spending for
> >> the war.
>
> >Did Obama's stimulus see a drop in employment?
>
> Yes.
>
> >Did it also "save and create" jobs?
>
> Yes.
>
> >Seems you work off two standards based on you ideology.
>
> No. *I don't have an ideology.

Everyone has an ideology.


>*The claims of job creation are made by
> economists who know such matters a lot better than you or I.

then perhaps you can share the methodology used to define "created or
saved jobs". Surely this is a rigorously formulated standard.

*But they
> didn't make any silly claims about Bush's tax cuts creating jobs. *You
> did.

Yes, using the same economic process for defining such things as the
current regime.