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2009 “Stimulus” Cost Far More than Iraq War (CBO)

Wednesday, September 1st, 2010

Obama’s Failed Stimulus Program Cost More Than The Iraq War

“The economy is in a shambles because of Bush’s economic policies and his war in Iraq.”  As American Thinker’s Randall Hoven points out, that’s the message being peddled by the political Left.  The key point is an alleged $3 trillion cost for the war.   Well, it was expensive to be sure, in both blood and treasure, but, as Hoven notes, the Congressional Budget Office (CBO) puts the total cost at $709 billion. 

To put that figure in the proper context of overall spending since the war began in 2003, Hoven summarizes and highlights key points from the CBO data: 

  • Obama’s stimulus, passed in his first month in office, will cost more than the entire Iraq War — more than $100 billion  (15 percent) more.
  • Just the first two years of Obama’s stimulus cost more than the Iraq War under President Bush,    or six years of that war.
  • Iraq War spending accounted for just 3.2 percent of all federal spending while it lasted.
  • Iraq War spending was not even one-quarter of what we spent on Medicare in the same time frame. 

Also: 

  • Iraq War spending was not even 15 percent of the total deficit spending in that time frame. The cumulative deficit, 2003-2010, would have been four-point-something trillion dollars with or without the Iraq War.
  • The Iraq War accounts for less than 8 percent of the federal debt held by the public at the end of 2010 ($9.031 trillion).
  • During Bush’s Iraq years, 2003-2008, the federal government spent more on education than it did on the Iraq War.  

Source: Mark Tapscott, “Little-known fact: Obama’s failed stimulus program cost more than the Iraq war,” Washington Examiner, August 23, 2010. 

For text:

http://www.washingtonexaminer.com/opinion/blogs/beltway-confidential/Little-known-fact-Obamas-failed-stimulus-program-cost-more-than-the-Iraq-war-101302919.html#ixzz0xUpw9hxv  

Posted in Government, Perspectives, The Debt, The Economy | No Responses »

“Shovel-Ready” Jobs: An Over-Priced ILLUSION of “Recovery”

Sunday, July 18th, 2010

Posted in Government, Media Coverage, The Debt, The Economy | No Responses »

Government Cannot “Create” Jobs: Only Businesses Can Do That!

Thursday, July 15th, 2010

THREE MILLION IMAGINARY JOBS

It may be that the last people in America who believe that the $862 billion economic stimulus of February 2009 created millions of net new jobs are Vice President Joe Biden and the staff economists in the White House.  Yesterday, President Obama’s chief economist announced that the plan had “created or saved” between 2.5 million and 3.6 million jobs and raised gross domestic product (GDP) by 2.7 percent to 3.2 percent through June 30. 

Christina Romer went so far as to claim that the 3.5 million new jobs that she promised while the stimulus was being debated in Congress will arrive “two quarters earlier than anticipated.”  The official White House line is that the plan is working better than even they had hoped. 

However: 

  • Since February 2009 the U.S. economy has lost a net 2.35 million jobs.
  • Using the White House “created or saved” measure means that even if there were only three million Americans left with jobs today, the White House could claim that everyone was saved by the stimulus, says the Wall Street Journal.  

The White House also naturally insists that things would be much worse without the stimulus billions spent on the likes of Medicaid payments, high speed rail projects, unemployment benefits and windmills.  President Obama said recently in Racine, Wisconsin, that the economy “would have been a lot worse” and the unemployment rate would have gone to “12 or 13, or 15 [percent]” if government hadn’t spent all of that money. 

This is called a counterfactual: a what would have happened scenario that can’t be refuted.  What we do know is what White House economists at the time said would happen if the stimulus didn’t pass, says the Journal: 

  • They said the unemployment rate would peak at 9 percent without the stimulus (there’s your counterfactual) and that with the stimulus the rate would stay at 8 percent or below.
  • In other words, today there are 700,000 fewer jobs than Romer predicted we would have if we had done nothing at all.  

If this is a job creation success, what does failure look like, asks the Journal? 

Source: Editorial, “Three Million Imaginary Jobs,” Wall Street Journal, July 15, 2010. 

For text:

http://online.wsj.com/article/SB10001424052748703394204575367421573463984.html

Posted in The Economy | No Responses »

Learning from our Neighbors to the North

Thursday, June 3rd, 2010

BUDGET LESSONS FROM… CANADA?  YES!

Canada was called an “honorary member of the Third World” by the Wall Street Journal in 1995, and for good reason.  Out-of-control spending, soaring debt and the government’s bite of the country’s gross domestic product (GDP) growing at a furious pace prompted the Journal’s harsh putdown.  Sound familiar?  Those are exactly the trends that endanger America’s economy and standard of living today, says Fred Barnes, the executive editor of the Weekly Standard. 

Only with Canada, there’s a difference.  Beginning in the mid-1990s, Canadians came to grips with their fiscal crisis: 

  • They cut spending at both the national and provincial (state) level, reduced the size and payroll of government, slashed debt, and produced what Paul Martin, then finance minister and later prime minister, called smaller, smarter government.
  • Canada is now in a far better economic situation than the United States — its unemployment rate is lower, its budget deficit breathtakingly smaller (after nearly a decade of balanced budgets), its debt burden far lighter, its banks more stable.
  • The Canadian dollar, once worth as little as 62 cents, is currently nearly at parity with the American dollar. 

One lesson from Canada is that major fiscal reform requires bipartisanship, with the initiative better coming from liberals than conservatives.  It was the left-of-center Liberal party, facing what David Frum, a Canadian and prominent political commentator who lives in Washington described as “nightmarish debt and deficits,” that led the way with an austere budget in 1995.  Conservatives, divided at the time, were supportive. 

There is a simple explanation for the need for liberal leadership.  If conservatives propose to cut spending and downsize government, reflexive liberal opposition can be expected.   However, if liberals advocate a similar approach, they’re likely to be supported by many of their liberal allies and by almost all conservatives. 

At least it worked that way in Canada, with impressive results.  In Washington, however, the liberals in charge — that is, President Obama and Democrats in Congress — are moving in the opposite direction.   Rather than retrench, they want to spend and borrow more, says Barnes.   

Source: Fred Barnes, “O Canada,” Weekly Standard, June 7, 2010. 

For text:

http://www.weeklystandard.com/articles/o-canada 

Posted in The Debt, The Economy | No Responses »

Government Spending Squeezing Out Personal Earnings

Wednesday, May 26th, 2010

Paychecks from private business shrank to their smallest share of personal income in U.S. history during the first quarter of this year, a USA TODAY analysis of government data finds.

At the same time, government-provided benefits — from Social Security, unemployment insurance, food stamps and other programs — rose to a record high during the first three months of 2010.

Those records reflect a long-term trend accelerated by the recession and the federal stimulus program to counteract the downturn. The result is a major shift in the source of personal income from private wages to government programs.

The trend is not sustainable, says University of Michigan economist Donald Grimes. Reason: The federal government depends on private wages to generate income taxes to pay for its ever-more-expensive programs…

Economist Veronique de Rugy of the free-market Mercatus Center at George Mason University says the riots in Greece over cutting benefits to close a huge budget deficit are a warning about unsustainable income programs.

Economist David Henderson of the conservative Hoover Institution says a shift from private wages to government benefits saps the economy of dynamism. “People are paid for being rather than for producing,” he says.

~Dennis Cauchon, USA TODAY

Posted in Socialism, Taxes, The Economy | No Responses »

Houston, TX and Its Thriving Economy: HOW?

Monday, May 24th, 2010

MODEL CITY SHOWS  US HOW IT’S DONE

Politicians in big cities talk about jobs, but by keeping taxes, fees and regulatory barriers high they discourage the creation of jobs, at least in the private sector.   A business in San Francisco or Los Angeles never knows what bizarre new cost will be imposed by city hall.  In New York or Boston you can thrive as a nonprofit executive, high-end consultant or financier, but if you are the owner of a business that wants to grow, you’re out of luck, says Joel Kotkin, the Chapman University presidential fellow in urban futures. 

Houston, however, has kept the cost of government low while investing in ports, airports, roads, transit and schools.  A person or business moving there gets an immediate raise through lower taxes and cheaper real estate.  Houston is just better at nurturing jobs, says Kotkin. 

For example: 

  • Last year Houston added 141,000 residents, more than any region in the United States save the city’s similarly sprawling rival, Dallas-Fort Worth.
  • Over the past decade, Houston’s population has grown by 24 percent — five times the rate of San Francisco, Boston and New York.
  • In that time, it has attracted 244,000 new residents from other parts of the United States, while older cities experienced high rates of out-migration.
  • It is even catching up on foreign immigration, enjoying a rate comparable with New York’s and roughly 50 percent higher than that of Boston or Chicago.
  • Between 2000 and 2009, Houston’s employment grew by 260,000; greater New York City — with nearly three times the population of Houston — has added only 96,000 jobs.
  • In contrast, the Chicago area has lost 258,000 jobs, San Francisco 217,000, Los Angeles 168,000 and Boston 100,004. 

Houston, perhaps more than any city in the advanced industrial world, epitomizes the René Descartes ideal — applied to the 17th century entrepreneurial hotbed of Amsterdam — of a great city offering “an inventory of the possible” to longtime residents and newcomers alike.  This, more than anything, promises to give Houstonites the future, says Kotkin. 

Source: Joel Kotkin, “Houston: Model City,” Forbes Magazine, May 20, 2010. 

For text:

http://www.forbes.com/forbes/2010/0607/opinions-houston-immigration-job-growth-on-my-mind.html

Posted in States, The Economy | No Responses »