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Morning Bell: Don't Celebrate First Failed Stimulus with a Second One
Posted By Conn Carroll On February 16, 2010 @ 9:29 am In Ongoing Priorities | Comments Disabled
Tomorrow is the one-year anniversary of the American Recovery and Reinvestment Act , or as it is more accurately described, President Barack Obama’s Failed Stimulus. When President Obama signed the now $862 billion  deficit-spending bill into law, the unemployment rate stood at 7.6%  and the U.S. economy employed 133.5 million people . At the time President Obama promised the American people that, thanks to his stimulus, unemployment would never go higher than 8.2%  and the U.S. economy would support 138.6 million jobs by December 2010 .
At the one year mark unemployment is now 9.7% , after rising above 10% , and the U.S. economy has lost 4 million jobs leaving the White House 9 million jobs short of the 138.6 million they promised to deliver by December of this year. By any objective measure President Obama’s $862 billion stimulus must be judged as a complete failure. Undeterred by these facts, the White House Council of Economic Advisers (CEA) published a report  on the economic effects of the Administration’s economic stimulus plan claiming that there are 2 million more jobs in the economy than there otherwise would have been had the President’s stimulus not become law. But as Heritage Policy Analyst Karen Campbell has documented , the CEA report relies on completely arbitrary benchmark projections that fail even basic standards of economic analysis. If the Administration had used other economic forecasts, the results would not have been as impressive – in fact, some would have shown that the economy lost more jobs after the stimulus package was implemented .
Armed with their CEA propaganda, President Obama is dispatching his Cabinet officials to 35 communities across the country  this week to try and convince the American people that his Failed Stimulus is in fact, a success. The President faces an uphill climb: according to the latest poll from The New York Times  only 6% of Americans believe the stimulus has created jobs and 48% of Americans believe it never will.
One might hope that after $862 billion in failed stimulus spending, that liberals in Washington would take a break from spending other people’s borrowed money. No such luck. The House has already passed a new $154 billion stimulus package and Majority Leader Harry Reid (D-NV) is pushing a$15 billion plan in the Senate, $13 billion of which  is a temporary Social Security payroll tax exemption for new hires. This temporary tax break will further increase our Social Security system’s existing deficits , will cost $1 million per only eight temporary new jobs according to the Congressional Budget Office , and will do nothing to decrease long-term unemployment.
While this would be President Obama’s second stimulus, it would actually be this recession’s third. In February 2008, President George Bush passed an equally useless mix of temporary tax cuts  and mortgage grantees for Fannie Mae and Freddie Mac totaling $168 billion.  That stimulus did nothing to stop the recession and neither will President Obama’s second stimulus. Our nation simply can’t afford wasting hundreds of billions of dollars and deficit Keynesian stimulus spending every February. Now is a good time to stop.
Article printed from The Foundry: Conservative Policy News from The Heritage Foundation: http://blog.heritage.org
URL to article: http://blog.heritage.org/2010/02/16/morning-bell-dont-celebrate-first-failed-stimulus-with-a-second-one/
URLs in this post:
 American Recovery and Reinvestment Act: http://en.wikipedia.org/wiki/American_Recovery_and_Reinvestment_Act_of_2009
 now $862 billion: http://www.washingtontimes.com/news/2010/jan/27/stimulus-price-tag-soars-as-jobless-rate-rises/
 unemployment rate stood at 7.6%: http://www.bls.gov/news.release/archives/empsit_02062009.htm
 133.5 million people: http://www.bls.gov/news.release/archives/empsit_02052010.htm
 unemployment would never go higher than 8.2%: http://otrans.3cdn.net/45593e8ecbd339d074_l3m6bt1te.pdf
 the U.S. economy would support 138.6 million jobs by December 2010: http://www.foundry.org/2009/06/09/morning-bell-the-obama-jobs-gap/
 after rising above 10%: http://www.foundry.org/2009/11/09/obamas-failed-stimulus-in-pictures-102-unemployment/
 report: http://www.whitehouse.gov/sites/default/files/microsites/100113-economic-impact-arra-second-quarterly-report.pdf
 documented: http://www.heritage.org/Research/Economy/wm2799.cfm
 35 communities across the country: http://thehill.com/homenews/administration/81067-dems-try-to-avoid-overselling-jobs-bill-
 The New York Times: http://www.cbsnews.com/htdocs/pdf/poll_Obama_Congress_021110.pdf
 $13 billion of which: http://www.csmonitor.com/USA/2010/0211/Harry-Reid-scales-back-Senate-jobs-bill-reflecting-voter-anger
 further increase our Social Security system’s existing deficits: http://www.foundry.org/2010/02/15/payroll-tax-holiday-misguided-reform-to-social-security-financing/
 will cost $1 million per only eight temporary new jobs according to the Congressional Budget Office: http://news.yahoo.com/s/ap/20100211/ap_on_bi_ge/us_what_jobs/print
 temporary tax cuts: http://blog.heritage.org../2008/01/08/morning-bell-18/
 $168 billion.: http://www.bloomberg.com/apps/news?pid=20601087&sid=aMljy8GxkKoc&refer=home
 the Taliban’s top military commander was captured: http://blog.heritage.org http://www.nytimes.com/2010/02/16/world/asia/16intel.html?ref=todayspaper
 dropped by about half: http://www.nytimes.com/2010/02/16/world/asia/16afghan.html?ref=todayspaper
 European Union bailout of Greece: http://www.nytimes.com/2010/02/16/world/europe/16germany.html?ref=todayspaper
 frustrated by the lack of amnesty: http://blog.heritage.org http://www.sacbee.com/topstories/story/2539376.html
 Rasmussen poll: http://www.rasmussenreports.com/public_content/politics/general_politics/february_2010/59_favor_letting_states_opt_out_of_federal_programs
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