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  • Stimulus Is Destroying, Not Creating Jobs

    Even as National Economic Council Director Lawrence Summers says the stimulus is working he also warned that he expects unemployment to remain unacceptably high for years to come. Unfortunately, Summers is half right: unemployment will probably stay high, but because of – not in spite of – the stimulus bill.

    The Obama administration claimed that the government spending in the nearly $800 billion stimulus bill would “create or save” millions of jobs. And in one limited sense it will. The enormous increases in government spending will directly employ many workers. But that does not mean the stimulus will increase overall employment in the economy. Just the opposite in fact.

    Academic research shows that increased government spending and government jobs crowd-out private sector employment. The government does not create wealth, it only moves resources around in the economy. Even now, with the economy in a recession, the money spent on government jobs is money that cannot be used by business to expand their own operations. Businesses are still investing, but at a lower rate than the recession began. The money the government spends on “stimulus projects” cannot be used by these same businesses to expand. So while government employment grows – private sector jobs shrink. Overall the jobs created by government spending are offset by losses in the private sector – and then some. One study of the Swedish economy found that for each government job created 1.15 private sector workers lost theirs. Government spending does not “create or save” jobs.

    Worse, higher government spending discourages private sector investment. A larger and more expansive government – and the taxes needed to fund it – reduce profitable business opportunities and deter investors from putting their money to work in the economy.

    Unemployment has primarily risen because of the reduced private sector investment and job creation since the recession started. The stimulus bill – and the taxes that will eventually need to be raised to pay for it –discourage investment and entrepreneurial job creation. No wonder that research shows that reducing government spending helps the economy while raising taxes harms it. Unemployment will probably remain unacceptably high for years to come – in part because of the misnamed stimulus bill.

    Posted in Economics [slideshow_deploy]

    18 Responses to Stimulus Is Destroying, Not Creating Jobs

    1. M Stone - Denver, CO says:

      This is just one of an ever increasing number of failed campaign promises. When the press gets over its infatuation with this President, they may start reporting on the many failed promises – creating jobs among them – that Obama has fallen well short of delivering on.

      Five of the more evident failures include creating a 'Post Racial' society, a middle class tax cut and on and on. (for the rest of this list; hit http://www.conservativeblog.thewebinfocenter.com/… )

      Voters are getting tired of excessive spending and want the Stimulus bill repealed.

    2. Bill San Antonio TX says:

      Why is it every President has to come up with some nonsensical phrase. With Billy we had words to the effect, "It depends what is is."

      Now we hear a non-provable description, which can be taken in either direction, about "saved" jobs.

      Good Grief, we must all be just a flock of lemmings.

    3. Pingback: » Financial News Update – 09/16/09 NoisyRoom.net: Where liberty dwells, there is my country…

    4. Pingback: AntiObamaBlog.com » Stimulus Is Destroying, Not Creating Jobs

    5. Pingback: Spare change we can believe in- Truth in Jobs

    6. Bobbie Jay says:

      If what they say they expect, is positive, it's only to appease. What they really expect is exactly what they're manipulating with their actions, cover-ups and proposals…socialism.

    7. Bob, Portland, OR says:

      Right you are Bobbie.

      A key factor in this socialist revolution is to intentionally run the economy into the ground.

      You see, it creates uncertaintly and fear amoung the citizens. When you add in all the Chaos this Obama administration has brought with it, people get stressed.

      To me, all of this is intentially designed to provoke something, and then they have us.

      All the crazyness, Acorn, SCIU, Health Care, Cap and Trade, Fairness Doctrin, Vale threats from our own representatives,(Rep Waters), dismissing us at town hall meetings, Foreign affairs, the media and on and on.

      This is exactly why we Americans must stay calm and teach our reps a lesson at the poll's in 2010.

    8. Grace, Florida says:

      The stimulus package was designed to throw money at projects because Obama didn't know what else to do. His lack of experience is what drove the stimulus package. It has done nothing except guarantee debt to our children and grandchildren. If it was working, people would be back on their jobs, and the economy would be growing. Neither of things are happening. People are holding on to the money they have and saving more in case they loose their jobs which tells me there isn't allot of confidence for our president and his ridiculous policies.

    9. Grace, Florida says:

      obama is doing exactly that – running the country into the ground. Agreed we do need to stay calm, take each day as it comes, pray for justice and God's mercy on a undeserving nation and vote all the bums out in 2010. This country is waking up. Thank God.

    10. ccd2, PA says:

      The polls of 2010 are the only refuge we have.

    11. Jeanne Stotler, wood says:

      Yes the Polls are one resort, elections on an off year as in governors of New Jersey and Virginia are as important as 2010. Public show of unity must continue, tea parties and Rallies are essential to bring home the fact that this administration is full of acts of treason and unconstitutional acts. They need to start with all those "Czars" who seem to be controling Obama. ACORN needs to be examined closely for all actions starting with Obama's staement that he was running. If Congress could overlook crimes to get him elected WE HAVE THE RIGHT TO KNOW and have him impeached.

    12. Jill, California says:

      The bailouts and stimulus package have HURT my business. They have HURT many of my peers as well.

      In part, this is because federal grant money that previously went to training and equipping emergency responders is being diverted to the senseless and expensive bailouts.

      But what can we expect from a president who believes there's no such thing as a war on terror? He wouldn't understand that training and equipment designed to help emergency responders respond safely to WMD incidents also help them respond safely to everyday incidents, such as chemical fires, chemical spills, or incidents involving home-grown bad guys that don't meet the definition of a terrorist.

      Why protect our emergency responders from these everyday threats? Why protect the public? Far better be it to bail out irresponsible financial institutions or pay people to exchange perfectly good clunkers for new vehicles.

    13. Jerry from Chicago says:

      Regardless of the millions of unemployed, who are now running out of unemployment compensation, Mr. Obama goes on TV and tells the country that the Stimulus bill of his is working. The man knows no shame. Just exactly where are all of those "shovel ready" jobs he was crowing about when he rammed through the Stimulus bill without posting it on the internet for 5 days (as promised during his campaign); without exercising line item veto authority on even one of the 9,000 pork barrel, "earmarks" (as promised during his campaign)' and without even bothering to read the 1,100 page bill (at least he didn't promise during his campaign to read the legislation he signs – which kind of makes the second promise of vetoing "earmarks" a moot point).

      The only "shovel ready" job available after the Stimulus bill was passed was given to Mr. Obama's Press Secretary, Mr. Gibbs. That job was to shovel lots of B.S. to the public about the success of Mr. Obama's policies.

    14. Bob, Portland, OR says:

      Grace, thanks.

      You see, they have grossly underestimated our ability to reason and think this through.

      When they intentionally dismiss us at town hall mettings and rallies we know exactly what they are doing. When they pretend to not know about the two young people and Acorn, "Nancy", we know it is a lie.

      One thing though to watch for. History has shown that when these types of revolution's have taken place, the revolutionaries themselves will perpetrate an "event" and then blame it on the people.

      They do this to seize control of all media and eventually the 2nd amendment.

      Sorry if this sounds crazy, but they are following a communist text book chapter and verse.

      Rise up America but be calm.

      Viva La 2010!!!

    15. Lynn B. DeSpain says:

      When you have permanent jobs shutting down at a regular rate, then you add a large amount of short term 'Stimulus Jobs' that run out, the total job loss for that period spikes and causes caution in futher market trade and new business opening.


    16. Ben Franklin, IN says:

      Don't underestimate the added effect of the huge increase in the minimum wage during the Bush years..

    17. Marshall,Michigan says:

      I'm with Bobbie and Bob!

    18. Pingback: that hero » The Obama Doctrine

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