Friday, November 13, 2009

Down Memory Lane With Obama's Stimulus Package

When Christina Romer, Obama's top economic adviser, proposed the President's Stimulus Package, she summarized five primary objectives. I have extracted those objectives from the "Recovery" plan document (Click to View) and highlighted the key words contained within each:
  1. A package in the range that the President-Elect has discussed is expected to create between three and four million jobs by the end of 2010.
  2. Tax cuts, especially temporary ones, and fiscal relief to the states are likely to create fewer jobs than direct increases in government purchases. However, because there is a limit on how much government investment can be carried out efficiently in a short time frame, and because tax cuts and state relief can be implemented quickly, they are crucial elements of any package aimed at easing economic distress quickly.
  3. Certain industries, such as construction and manufacturing, are likely to experience particularly strong job growth under a recovery package that includes an emphasis on infrastructure, energy, and school repair. But, the more general stimulative measures, such as a middle class tax cuts and fiscal relief to the states, as well as the feedback effects of greater employment in key industries, mean that jobs are likely to be created in all sectors of the economy.
  4. More than 90 percent of the jobs created are likely to be in the private sector. Many of the government jobs are likely to be professionals whose jobs are saved from state and local budget cuts by state fiscal relief.
  5. A package is likely to create jobs paying a range of wages. It is also likely to move many workers from part-time to full-time work.
It doesn't take a lot of knowledge of what is going on in our economy to understand that almost every one of those five objectives has failed; and, failed miserably.

Now, Obama is claiming that he will "save or create" 2.5 to 3 million jobs. So, much for the very definitive objective to "create" 3 to 4 million jobs.

The tax cuts that were ultimately provided by the Stimulus Package were but a scant $13 a week; which hardly produced any growth in our economy.

Infrastructure spending hasn't hardly produced any construction and manufacturing jobs. In every jobs report, these sectors of the job market have been hurt the hardest. That's because 90 percent of the jobs that have been created and saved under the Stimulus Package were in the government sector; especially for police and education. And, this in direct contradiction to the President's promise that he would create 90 percent of the jobs in the private sector.

In terms of objective number 5, not only have full-time jobs been lost but, so have temporary help positions. So, Obama's last objective to move people to full-time positions from temporary ones, hasn't happened at all. In fact just the opposite is true. Workers who have been forced to give up full-time careers have, in some cases, found temporary work to just get by.

Lastly, that very same Stimulus Plan proposal also contains the now infamous chart (Page 5, Figure 1) that shows that the unemployment rate will be held to 8 percent and below if the President's plan gets "immediate" approval:

Well, as many have pointed out, that chart was plain hogwash.

All I know is that if someone in business had done such a poor job of proposing and implementing a similar kind of plan, they'd be out looking for another job. But, in politics, especially in this particular left-wing loving environment, this President is getting, at best, a slap on the wrist for doing such a poor job.

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