Not that difficult. Consider a school system that had already handed out layoff notices to teachers, layoffs that were canceled when they got Stimulus money. I’m sure the accuracy of the numbers may be iffy, and there may be over-reporting, but the concept is not so tough.
Can’t argue with this, but remember the TARP money got handed out during the last administration, and it got handed out without enough strings attached. And I’ll agree that Geithner deserves some of the blame for it.
Why would AARP get TARP money? Stimulus money I can maybe see, but they are different beasts. Does AARP run a bank?
The stimulus money goes to different people for a different purpose than the TARP money. That was meant to improve the balance sheets of the banks sufficiently so that they could stay open (which it did) and encourage lending (which it didn’t). It was not directly targeted for job creation. I agree that creating jobs directly would have been a wonderful idea, but can you imagine the fit the Republicans would have over that? In any case, working through existing agencies accelerating existing infrastructure projects let the money be spent much faster than starting a WPA from scratch.
Oh, I know it’s flowing. I drive over more than a few of them myself on a weekly basis. I just wanted to know where the second stimulus idea came from.
Apparently it boils down to ‘End of 2010 the original bit will run out and we don’t want all the positive effects to be undone when we won’t be out of the woods yet’. Works for me.
It sucks, I agree, but that money was not handed out during the Obama Administrations (as others have already pointed out). My company actually thought (albeit tongue in cheek) of going for TARP funds, and we are a technology company. The 2008 Emergency Economic Stabilization Act, while needed (IMO), was passed too hastily. They should have done it in steps, first 100 billion to calm market fears with little or no strings attached, and then an intelligently targeted package of 600 billion with oversight. Anyway, none of that can be laid at the doorstep of President Obama.
According to recovery.gov (the website the Omaba Adminstration set up to track the money from the American Recovery and Reinvestment Act of 2009 (the Obama stimulus bill), Arizona has received over 2.8 billion in grants, loans and contracts that have saved or created over 12,000 jobs. For Colorado, it is slightly less than 2.5 billion and 8,100 jobs.
I am pretty committed to free market capitalism, and I am not sure if I agree with Keynesian Economics. That said, the theory is rational and it might be possible to compensate a recession with government debt spending, but it has never been proven. We are in the middle of a great (and risky, though less risky than ralph124c believes) experiment that may or may not prove whether Keynes was right. Probably we will never know and people will argue endlessly about prolonging the recession or shortening the recession with very little evidence either way.
We’re not going to know what truly happened and what effect these policies had for a long, long time. Hell, people are still arguing over what caused the depression and what ended it.
I can make cases for both sides. But I’ll take a different angle here and talk about Obama’s other policies besides the stimulus. And that would be cap and trade, the employee free choice act, and the health care bill. I think all three of these have contributed to the depth of the recession, because they inject tremendous uncertainty into the market today. A lot of businesses - especially small businesses - are spooked by the spectre of a whole raft of new regulations coming down on top of them. Small businesses haven’t been mentioned much in all the discussions of the stimulus and these other programs - talk seems to center around big business, the auto and financial industries, etc. But job growth comes primarily from small to medium sized businesses.
The worst-case scenario is that growth will stop for those busineses who are near the cutoff thresholds for the various plans in motion. For example, the health care bill requires that employers pay the health care premiums for their employees, or face an 8% addtional payroll tax. In the house version I last read, the cutoff for this was for businesses with annual payrolls above $250,000. Think about that. Let’s say your annual payroll is $200,000, and you want to hire another employee at $55,000. If you’re not currently providing health care and can’t afford to, that means the next employee will actually cost you $75,000: $55,000, plus 8% of 250,000 in new payroll taxes. This is like a marginal business tax rate of 26% on the salary of that next employee. That will stifle job creation.
Likewise, the Employee Free Choice Act puts businesses at risk of being unionized and having their ability to control their own business put at risk. Cap and Trade will be a huge tax on businesses.
None of these have passed yet, but the more Congress talks up these programs and promises to pass them, the more spooked the small business community gets. The problem is that these effects are extremely hard to quantify. But you can see some of the effect in the unemployment numbers - the number you usually see posted is from the payroll survey, which tracks job losses and gains in about 160,000 businesses who are big enough to report payroll data. This excludes the self-employed, the smallest businesses, sole proprietorships, and private contractors. And if you look at the numbers, the overall unemployment rate is still higher than the payroll survey alone would indicate.
This is an argument aside from the merits of these programs. Even if you think the health care bill and cap and trade are valuable on their own terms, you might agree that his is a really bad time to burden the economy with trillions of dollars in new taxes.
There’s also a missed opportunity here - government regulation costs the economy close to a trillion dollars a year. But it costs the government nothing to ease it. In an economy that can use more stimulus, but in which the government is already exploding the debt, it seems to me to be a no-brainer to take a hard look at regulations and implement some cuts or at least some regulatory holidays. Sarbanes-Oxley is extremely expensive and has had little positive value. It should be axed. The FDA’s drug efficacy regulation could be put on holiday for five years. New business construction could be exempt from ADA requirements for five years. The Wagner act could be suspended for five years to allow more low-wage employees to find construction work.
The big problem with the stimulus is of course the debt. The CBO has estimated that the interest on America’s debt will be 700 billion per year by 2019. That’s more than the entire cost of the Department of Defense, Department of Education, NASA, and the Department of Energy combined. That will be an ongoing, unavoidable drag on the American economy for decades. The logic of a Keynesian stimulus requires that the stimulus, through its multiplier effects, helps create such robust growth that the economy can afford to either pay back the money or outgrow the debt. If that doesn’t happen, and the U.S. is heading for something more like Japan’s lost decade, then this stimulus and the other big-spending programs of this government will be disastrous, setting the stage for a structural hole of epic proportions. That’s the point at which we’ll know whether or not it was worth it.
So in 2019 debt interest repayment levels will be back up to 1992 levels. How will we manage?
And blaming things like cap and trade which aren’t even through the Senate and won’t be enacted for years to come? Jeebus. Is that really the most constructive criticism the right can come up with?
Although stimulus spending is a shitty way to deal with a recession, and you can’t spend your way out of recession and deficits, I think conservatives should face the fact that we’re left with shitty policies only to deal with the recession because monetary policy got blown to bits, the bellows worked so hard they blew themselves up, over the last eight years. We responded to the bursting of the bubble caused by record low interest rates by traditional monetary policy, cutting interest rates, but the bubble and resulting crash were so big tht we ended up going into it with zero percent interest rates which is where we are now. Any kind of monetary policy stimulus wasn’t available to Obama because of the previous bunch of clowns so he did the only thing he could.
Besides this, when we had the opportunity to reduce the deficit caused by the war by raising taxes, the Republicans didn’t take it. Thus our necessary deficit is built on an unnecessary one. No one is advocating raising taxes now, which would be stupid. Of course Sam and company want to put it off until the Dems might lose their supermajority.
As for business reaction - dem old child labor laws are going to increase the cost of goods and drive the small businesses that make this country bankrupt. Oh, the horror!
I also forgot to mention how twenty years of Reagan, Bush, and Bush selling debt to China was a non-issue but one year of Obama doing it will destroy the country
I also agree that Obama’s stimulus plan is hardly perfect. But it really couldn’t be. The economic crisis was indeed a crisis - action was needed. It’s arguable that the economic crisis of 2008 and not the 9/11 attacks was the most serious emergency of the Bush presidency. In a situation like that you don’t have the luxury of calm study and reflection - a President has to act, even in the face of uncertainty. Bush and Obama had to act with what was available and the quickest way to stabilize the economy was to throw a large pile of money into existing financial organizations, even with the knowledge that some of these organizations had caused the problems. Later when the economy is more stable we can sit back and consider if changes need to be made in the long term in how those financial organizations do business to prevent future economic problems.
I hope to have more time tomorrow to post, but until then just a quick comment from me and my 3 glasses of wine:
You are right that the debt management is an issue, but pinning it on President Obama is bullshit. Most of the debt is preexisting and while the stimulus bill at 787 billion is massive, it pales compared to all of the other commitments coming from previous administrations (both Bush and Clinton, but mostly Bush). If President Obama had not pushed for the stimulus we still would have been in the same pot with a similar cooking time. Hell, the health care bill with its 1.5 trillion dollar price tag over the next decade cost almost exactly the same as President Bush’s Medicare Drug Benefit package (1.2 trillion over 10 years), yet I didn’t see many people of your stripe complaining about that.
Sam, I agree with you on a lot of things, but the partisanship is bullshit. There are many problems with American politics (which you know better than most Americans, never mind Canadians) but it is endemic to both parties. President Obama’s polices are pretty conservative when you really get down to it. President Clinton’s policies were probably, on the whole, more conservative than President Bush’s. But you don’t seem to give credit where credit is due.
I agree that the health care bill is crap and is probably just going to be another giveaway to corporations, but that is the stasis quo in Washington. Same with cap and trade. The free choice act is ugly, but I seriously doubt it is as bad as you think. It really seems to me that Corporations and those with money are running the show and no amount of regulation or reform is going to fix things because their are too many conflicts of interest.
I would love to see regulations like Sarbanes Oxley go. I would love to see less regulation and more enforcement. But I am not going to get that with either party. I think you probably know that, but you seem to go much easier on the Republicans is general, and the previous administration specifically, than you do on President Obama.
Exactly! I have a co-worker that would tell me I was overreacting with regards to the debt over the last 6 years. “As a percentage of GDP, it is not a problem” , “Getting other countries to pay for our capital investment and military is great, the money is cheap”, “lowering taxes and getting away from our balanced budget is great because it will spur economic growth and create wealth, the debt is not a problem because we will grow out of it”. But now all he can talk about is how President Obama is going to destroy our economy with these massive deficits and when I try to show him, with numbers, that most of the debt is legacy, he responds “la la la, I can’t hear you”. I usually am amazed that those that bill themselves as conservatives are less so than I.
There’s certainly nothing wrong with raising the taxes of the middle-class. Og only knows they aren’t paying nearly enough; certainly not their share of what it costs to keep a modern, advanced, industrial nation’s economy healthy.
Of course, the upper-classes and the lower-classes aren’t paying their fair share either. Our taxes in the U.S. are too low. Yeah, go ahead and bitch, moan, and hate. Look, I don’t like paying taxes either. And I’d like it even less if my taxes were to go up to the level they would be at if we were responsible about our economy.
I also don’t like going to the dentist, driving the speed limit, waiting in lines, or eating lots of vegetables. I’d like this whole world to be a fantasy that’s all about coddling me. But that would be silly, wouldn’t it? Silly, and insane.
One day we might join the ranks of the civilized countries. Or, we might drown in our own sloth. Personally I’m holding out for the Theocracy. Then it’s all on Jesus.
Was that the list that said how many jobs were created in Arizona congressional district #15? (Arizona has 8 districts) If you can’t count how many districts are in a state, how much should I trust your numbers?
Speaking of knee-jerk partisanship… You might notice that I didn’t blame Obama.
Speaking of assumptions about ‘people of my stripe’, it might interest you to know that I was one of the most vociferous opponents of Bush’s medicare plan and all the rest of his big spending ways. I’m no Bush fan - especially on domestic policy.
Then stop with the partisanship. You took a partisan stance, used it to put words in my mouth, then accused me of partisanship. Nice. You might like to know that I have been saying for years that Clinton was a good President. A better president than Bush, for sure.
Again with the words-putting-in-mouth thing. Before attacking me on my opinion of Clinton, why don’t you use the magic search button and actually read what I’ve actually said about the guy?
But the notion that Obama is ANY kind of conservative is laughable.
Look, I’m fully aware that Bush helped create this mess. Actually Presidents all the way back to LBJ helped create this mess. Medicare and Social Security have been ticking bombs for decades, and no one did a damned thing. The explosion in entitlement spending has been going on since the 60’s, and the writing has been on the wall ever since. But the spending kept going up, because the economy kept holding together allowing the debt to be pushed down the road. An asset bubble helped it along further - then the whole house of cards came down.
But the fact is, Obama is contributing greatly to the debt. That 1.3 trillion dollar health care bill is going to be a hell of a lot more expensive, because that number relies on finding $500 billion in unspecified cuts to medicare at some time in the future. This is exactly the kind of kick-the-can-down-the-road fiscal irresponsibility that got the U.S. into this mess. Obama has ratcheted up the budgets of numerous federal departments. The FY2010 budget is 600 billion dollars higher than the FY2008 budget. It’s only lower than the FY2009 budget because of all the stimulus money spent this year.
So let’s forget about the stimulus for a minute, and just look at the long-term budget of the U.S., without any bailouts, stimulus money, or whatever. These budgets go out to FY2019, and so are planned for long after the recession should be over. Government spending is slated to increase from 3.6 trillion in FY2010 to 5.2 trillion in 2019. As a percentage of GDP, it is going to climb from 21% in Bush’s last budget to 22.8%. The deficit in 2019 is projected to still be almost 800 billion dollars.
None of this includes the health care bill, or any additional stimuli or bailouts. It also assumes economic growth that is probably too high, and assumes that military spending can be reduced between now and then as a percentage of GDP, which seems unlikely to me.
In this atmosphere, Obama has increased funding for foreign aid by 2.9 billion. He’s about to propose 10 billion a year to fight global warming in Africa. He’s added 10 billion a year for ‘green’ technology. He’s put another 5 billion a year into ‘community development’ programs. He’s added 100 billion dollars to the discretionary budget for FY2010 over FY2009. It does not include a ‘placeholder’ for additional stimulus like this year’s budget had, even though some additional spending seems likely.
Of course, not everything is Obama’s fault. The real budget-breaker is Social Security. It will go from 675 billion this year to 1.1 trillion by 2019. And many presidents are guilty of deferring the pain of that (although Bush tried, and got shot down by Congress post-haste).
Nonetheless, these are the cards he was dealt, and with that crappy hand he has decided to ramp up domestic spending even more. This is not the action of a fiscal conservative. Obama may not be worse than the others, fiscally speaking, but he’s damned sure not any better. And the problem is that the problem can’t be deferred any longer. The cost of medicare after 2019 will make you weep for your budget. This is all coming to a head on his watch. And so far, he’s not up to the challenge. I’m not sure any president could be, given the dysfunctional political system in Washington, so I’m not laying all the blame at his feet, but he sure doesn’t seem to be trying very hard to stop it.
I wish the Democrats that hate corporations would wise up and realize that these regulations wind up getting perverted to their benefit.
Take Sarbanes-Oxley. Big corporations don’t fight it, because they are better capable of handling it than are the smaller companies gunning for them. Sarbanes-Oxley acts as a barrier against taking a private company public, and thus keeps the small businesses down and keeps venture capital from flowing to them. This benefits corporate America, but depresses small businesses and entrepreneurship.
Big government and big corporations go hand in hand, and they wind up colluding against the public good. If you’re really for the ‘little guy’, you should be for ‘little government’. Centralized power is bad for the common person, whether it’s held by corporations or government.
I have this rep of going easy on Bush because I supported the Iraq war, and that was the dominant conversation on this board for years. But on almost everything else the Bush administration did, I was a critic. I thought the steel tariffs were terrible. I thought the Schiavo circus was an embarassment. I thought Bush’s huge increases in the budgets of several federal departments like the Dept. of Education were wasteful and imprudent. I thought his handling of the Iraq war was poor after about 2 years in, until the surge.
I did defend the guy when I thought the attacks were unfair, as they often are on this board. So I guess I get put in the ‘Bush apologist’ corner here. But trust me, if I were posting on Free Republic they’d run me off as a crazy pinko.
Have you ever dealt with data from the field? I have. If there were no errors of this type it would be a sure indication that the data was made up. I’m sick and tired of this particular broken record, especially since the source of the problem (the number of a state district) is very clear. If this crap is all you have, you got nothing.
That’s the list., but let’s be clear, they’re not my numbers. I don’t know how trustworthy they are, but I am sure they are more trustworthy than you think. So here you have a website that has received more than 100,000 forms from stimulus recipients and a mistake is made re: Arizona 15. Claims that the Administration is making up districts so they can pretend that jobs are created a little excessive, but this is exactly what was claimed on the AM radio circuit. Meh.
Personally, I give credit to the administration for trying to be transparent with stimulus spending. Can you tell me what happened to the 150 billion in stimulus President Bush released in the summer of 2008. Can you tell me who one recipient was? At least President Obama is trying to be somewhat accountable. If you don’t like the numbers on recovery.gov, you can always go with recovery.org, a website run by the non-partisan company Onvia inc.
What advantage does creating districts do? The fact is they had 130,000 reports that were submitted and they compiled them. They have not had time to go through them all. They did not create. the districts.
It should be telling that they make all the reports available on line, unlike Bush who wanted us simply to trust them, the same guys who created the mess. A more open government is a good thing. It is the tax payers money after all.
The biggest flaw with the ‘jobs created’ number is that it counts only one side of the equation. We have no way of knowing how many of those jobs ‘created’ actually displaced other jobs. We have no way of knowing how many jobs were lost elsewhere because the jobs created made the other ones irrelevant. There’s no place for a company to report, “I had to lay off five guys because the job they were going to be contracted to do instead went to some guys being paid with stimulus money.”
There’s also no way to count the jobs lost because firms didn’t hire because of uncertainty about the competitive environment due to the distortion of the stimulus money.
In my own case, my company ‘created jobs’ with stimulus money by getting some contracts to do energy work. However, the focus on this work made them decide to lay off a bunch of people on other projects that suddenly went down in priority, because they needed their managers and other high-value resources on the stimulus projects where the big, easy bucks are. Those layoffs will never be counted against ‘jobs created by the stimulus’. It’s entirely possible that we reported job creation and yet the stimulus caused us to lay off more people than we otherwise would have.
So the numbers the government is promoting are misleading even if they are completely accurate as reported.