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How Is That Stimulus Working Out For You?

I found the chart below over at Innocent Bystanders. The original chart is the work of Christina Romer (Chair of President Obama's Council of Economic Advisers) and then Vice President Elect Joe Biden. It was released on January 10, 2009. The black dots for March, April and May of 2009 illustrate the difference between what the President and Democrats were selling and what the public actually got:

View image

During the heady days of early January, when the Congressional Democrats and President Obama were selling the stimulus spending legislation by trying to incite full scale panic, a lot of ridiculous promises were made. Among them was the promise of stemming the rising tide of unemployment. As the chart above indicates, the effect of stimulus spending on unemployment has been negligible (to put the best Democrat spin on it). The unanimous Republican minority opposition to the spending bill is finally finding a voice now that the data is coming in:

Republicans noted that a report by the Obama transition team in early January said that without a large stimulus plan, unemployment would go above 9%. It is now above that level, despite passage of the stimulus plan, though less than 5% of funds have been spent.

Total job losses in May were 345,000 which put the unemployment rate at 9.4%. You have to dig a little further to find out that there were 70,000 jobs created in May by the government, not the private sector. Private sector employment fell by 611,000.

How's that stimulus working out for you?


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Comments (32)

And are there ANY Republica... (Below threshold)

And are there ANY Republicans out there calling for a pullback of Obama's ineffective stimulus in favor of doing things that would stimulate the economy?

Given the softballs Obama is serving up (stimulus, bailing out GM, bailing out deadbeat homeowners, closing Guantanamo, chasing Bush officials, traipsing around the world apologizing for the US and so on) it is unfathomable why guys and gals with an (R) next to their name aren't elbowing each other out of the way in their rush to the plate, oops I mean, microphone.

The GOP has a wonderful opportunity to use these issues to solidify the public perception that while Obama might be a nice guy, he is in way over his head and his policies run counter to the interests of the public at large and won't make things better... and with battles coming up over health care and taxes, the sooner Obama's image in set in a unflattering way, the better.

But just like the tree in the forest, if no one moves to marshal public opinion against Obama, then he's going to keep screwing us.

Oh, you mean massive govern... (Below threshold)
Brett:

Oh, you mean massive government spending plans *don't create net job growth*?! I am incredulous, I was told the exact opposite by that charismatic and dashing Mr. Obama.

After all, it worked fantastically well in 1932. That depression cleared itself right up by early December 1941. Oh, and it was Hoover's fault anyway.

I'd say we're pretty much l... (Below threshold)
ExSubNuke:

I'd say we're pretty much locked in for at LEAST 1 Lost Decade with the way Obama's steering the ship of state. Sadly, we're heading into even more perilous waters with Universal Heathcare as well as Cap and Trade on the horizon.

Scary stuff we've got going on.

Steve -- the American publi... (Below threshold)

Steve -- the American public has ADD. Madame Speaker went flying around the globe for a couple of weeks with supreme confidence that the voters, with the attention span of a gnat, wouldn't recall anything that happened in May. Unfortunately, she is absolutely correct.

Why should any brave Republicans fire off what little ammunition they have now? It's as useless as holding a Tea Party on this upcoming 4th of July.

The (R) folks might as well rest, re-organize, position to purge the party, and let the libs shoot themselves in both feet and their private parts. Conservation of energy. Fire when you see the whites of their eyes, etc.

MUCH of the electorate is bought and paid for by the looting of the treasury earlier this year. In 2010 it will be an interesting fight for those voters who have not sold their souls.

How's that stimulu... (Below threshold)
Mac Lorry:
How's that stimulus working out for you?

Business is slow, but I'm investing in several product improvements and R&D that should give me a good return on investment when (if) the economy recovers. The only direct benefit from the stimulus money I'm seeing is as an individual. I plan on taking advantage of the 30% tax credit for investing in energy saving products up to the credit's limit of $1,500. I figure I'm justified in feeding from the trough because, as a taxpayer, I'm going to be paying for the stimulus bill the rest of my life even if I don't get a share of the slop. This is not the first time the government has subsidized energy saving products such as home insulation, but given the growing debt, one can only hope it's the last time.

For those who have significant savings the best economic news is that China is raising red flags (pun intended) over attempts to monetize the debt, which if done to excess, causes inflation. Banana republics have used that method to make foreign held debt nearly worthless and the Chinese are trying to cut off that escape route for Obama. The bad news is that means Obama has to raise interest rates to borrow the debt and those higher interest rates eat up a lot of the budget. I said from the start the Obama made an all in bet with his Stimulus bill. If it works he'll be reelected, if it fails he won't and democrats will be swept from power and kept out of power for years to come.

Most voters vote their pocketbook before their ideology, so democrats will try their hardest to fix the economy, and if they can't, they'll try to blame republicans. I think that's why republicans are offering alternatives, but not putting up much of a fight. They are given the democrats enough rope to hang themselves.

They're bizzzzy at the Reic... (Below threshold)

They're bizzzzy at the Reichstag White House trying to figure out how to un-suggest their original estimate. hold please... :)

I'm sure Der Fuhrer will de... (Below threshold)
GarandFan:

I'm sure Der Fuhrer will decree shortly that only GOOD economic news will be dispensed to the general public by his worshipers in the MSM. And if they can't find any GOOD news, they'd better damned well make it up.

Allow me to point out a key... (Below threshold)
Jim x:

Allow me to point out a key point for you:

...though less than 5% of funds have been spent.

Guess what? Money that hasn't hit the economy, doesn't have an effect on the economy.

Stimulus?Yep, the ... (Below threshold)
914:

Stimulus?

Yep, the higher cost of everything under this "hope for pocket change" administration has really stimulated a lot of spending from Me.

How's that stimulus working... (Below threshold)
irongrampa:

How's that stimulus working out for you, you ask?

Why, not at all,thanks.

"We have tried spending mon... (Below threshold)
Pretzel Logic:

"We have tried spending money. We are spending more than we have ever spent before and it does not work. I want to see this country prosperous. I want to see people get a job. I want to see people get enough to eat. We have never made good on our promises. I say after eight years of this Administration we have just as much unemployment as when we started and an enormous debt to boot!"
-Henry Morgenthau, FDR's Treasury secretary

Guess what? Money that h... (Below threshold)
cirby:

Guess what? Money that hasn't hit the economy, doesn't have an effect on the economy.

And guess another what? Money that's spent on stupid things that won't affect the economy in the right way, won't affect the economy in the right way. For example, taking future money out of the economy and dumping it into government programs that don't accomplish squat will do nothing except slow down any future recovery. And taking out massive loans against the economy does nothing much except keep you from accessing that credit for IMPORTANT things in the near future...

Two possibilities re: Henry... (Below threshold)
jim x:

Two possibilities re: Henry Morgenthau

1. FDR's policies never did get us out of the Great Depression, and so the late 40's, 50's, 60's, and 70's never happened.

2. Morgenthau was wrong.

And before you say "FDR's policies didn't get us out of the Great Depression! World War II did!" remember this:

World War II was a massive government spending program that raised taxes on the wealthy while creating jobs and providing services to nearly all of the middle and lower economic class.

So who should we go to war ... (Below threshold)
Harmon:

So who should we go to war with Jim?

Two possibilities ... (Below threshold)
Nicholas:
Two possibilities re: Henry Morgenthau

1. FDR's policies never did get us out of the Great Depression, and so the late 40's, 50's, 60's, and 70's never happened.

2. Morgenthau was wrong.

3. The Great Depression ended like recessions and depressions normally do, with a normal economic recovery as the markets started functioning again?

Did you think of that, or does it not suit your agenda?

Great post Hugh.By... (Below threshold)

Great post Hugh.

By the way, anyone notice that Lee Ward's "The Recession is over!! The economy is recovering!! Republicans LIED to us!!!" posts over at WizBlue have curiously subsided?

Sorry Jim X. Nothing was mo... (Below threshold)
Pretzel Logic:

Sorry Jim X. Nothing was more massive to date then when GWB built homeland security and enacted the Iraq resolution and lowered taxes all at the same time. Go go economy in 04, 05 and 06 ensued.

jim x: "World War II ... (Below threshold)

jim x: "World War II was a massive government spending program that raised taxes on the wealthy while creating jobs and providing services to nearly all of the middle and lower economic class."

Yesterday was the 65th anniversary of one part of that "massive government spending program". The job that was "created" for my Dad just happened to be on a beach nicknamed "Omaha"...and the "services provided" DID include:
- "medical care" (if you hollered "MEDIC!" loud enough)
- "Free transportation" (though he had to swim the last 50 yards or so)
- "Government housing" (a shelter-half)

yup, jim x, you sure put the anniversary of D-Day in the proper perspective: "a massive government spending program". On behalf of all the Veterans of that day, let me invite you to kiss my ass!

3. The Great Depre... (Below threshold)
Jim X:
3. The Great Depression ended like recessions and depressions normally do, with a normal economic recovery as the markets started functioning again?

Did you think of that, or does it not suit your agenda?

If it's your theory that this recovery spontaneously "just happened", and it also "just happened" to occur as a pure coincidence, rather than as a result of FDR's policies which *predicted* it would occur - well that's an interesting theory.

If you could even call it a theory, as it posits no actual cause-and-effect, but simple coincidence.

However, as (a) Hoover's conservative, deregulating, tough-love laissez-faire policies produced the exact **opposite** trend, **and** (b) as it makes sense that middle-class and lower-class workers have to spend money, and thus are far more certain to release money back into the economy - this "just so happened" theory doesn't hold much water for me.

Sorry Jim X. Nothi... (Below threshold)
Jim x:
Sorry Jim X. Nothing was more massive to date then when GWB built homeland security and enacted the Iraq resolution and lowered taxes all at the same time. Go go economy in 04, 05 and 06 ensued.

Just because Federal money is spent, doens't mean it can't be misspent. So mere spending is nowhere near the whole of the solution.

Our deficit under GWB resulted in an increase in defense spedning which **did not** put the lower and the middle class to work, **and** from a decrease in tax revenue **coming from** tax cuts for the wealthy.

When the wealthy get tax cuts, they aren't certain to spend that money. Quite the contrary, they may save it, place it in overseas banks, or even spend it overseas.

When the poor and middle-class get tax cuts, they are far more certain to spend it AND spend it in the US, because they need to.

See what I'm saying?

Justrand, I'm not entirely ... (Below threshold)
Jim x:

Justrand, I'm not entirely sure what kind of high horse you're attempting to climb on.

Rest assured that referring to one aspect of WWII which is undeniable - its economic aspects and results - in no way diminishes and is in no way **intended** to diminish the bravery of those who served in it. Who helped all of humanity by defeating the twin evils of a fascist Germany and an imperially fascist Japan.

And, as any adults know - inlcuding you - discussing WWII's economic aspects in no way diminishes the moral debt we owe those of our nation who fought in it.

My grandfather and uncles fought in WWII also. So you can kiss MY ASS, for climbing on your false high horse, and accusing me of insulting them and their sacrifices, so YOU can avoid an adult discussion of economics and reality.

To sum up, you throwing out this "Don't you dare mishonor our brave soldiers!" card, is plainly despicable and beneath you.

well there Jim x, I guess y... (Below threshold)

well there Jim x, I guess you're gonna make me re-examine your ASSININE comment again...ok.

"World War II was a massive government spending program that raised taxes on the wealthy while creating jobs and providing services to nearly all of the middle and lower economic class."

(1) World War II was a "WAR"! (hint: it's in the title). As a consequence of fighting for our lives and freedom the Government spent a lot of money, and yes, taxes were raised...though not just on "the wealthy. In fact over the course of the war while we spent and aproximately $306 billion, over $185 billion of that was raised NOT by taxes, but by War Bonds. 85 million Americans purchased them!

Again, as a consequence of fighting for our lives and freedom the Government spent a lot of money but that does NOT make it a "spending program".

(2) "...while creating jobs...". Well, ya see...when a vast majority of your workforce puts on a uniform and leaves the country to fight, there's gonna be a vacuum created called: "JOBS". Further, when you realize you've been neglecting your defense for a LONG time (as Obama wants to do now), and you have to play "catch up", then you need to build a bunch of "stuff" (airplanes, etc). Also, WAR (see: "massive spending programs") tends to use "stuff" up real fast...meaning MORE jobs to replace it! Get it?

(3) "...providing services to nearly all of the middle and lower economic class." The "services" were not "provided". People WORKED!!! "Welfare" was practically unknown in its "modern" form. The Civil Works Administration (CWA) and the Civilian Conservation Corps (CCC), for example, did NOT "provide services"...but rather provided JOBS. No work...no "welfare". And these programs PRECEDED World War II by nine years!

I can't make you smarter...that's genetics and you apparently got a raw deal. Sorry. But hopefully you're better educated now!

The posts on this blog seem... (Below threshold)
mfellion:

The posts on this blog seem to want the depression to last. Doing nothing got us in this fix. When only 5% of the stimulus has been spent everything is supposed to be all better? How can you expect the sun to come out, the birds to sing and the harps to play when he has been in office 6 months?

People, it doesn't matter whether you like Obama or not, what matters is this country. I don't see the Republicans offering anything to end the depression they created. When they put something forward more positive than "I don't like it, I told you so etc. etc etc." perhaps more people will pay atention. People know that under Bush and the Republicans the country went from no deficeit spending to the largest deficeit spending in history with a depression to boot and still they whine when Obama trys to fix the countryes ills.

If Obama does as well as FDR he would be one of the greatest Presidents in our nations history so I don't think comparing Obama to FDR does anything to help the Republican message. So what is your message?

STRAWMAN ALERT!!!<br... (Below threshold)

STRAWMAN ALERT!!!
mfellion: "doing nothing got us in this fix."

Obama (and you, apparently) like to describe the choice as being between:
(a) what Obama is doing
-or-
(b) Doing NOTHING!

Kinda like explaining to a Police Office why you pushed your car off a cliff.
"It had a flat tire...I had to do something!"

Next time just change the tire...or call the AutoClub!

"well there Jim x, I guess ... (Below threshold)
jim:

"well there Jim x, I guess you're gonna make me re-examine your ASSININE comment again..."

You mean, actually respond to them for the first time, instead of lamely trying to grandstand? Go for it.

"World War II was a massive government spending program that raised taxes on the wealthy while creating jobs and providing services to nearly all of the middle and lower economic class."

"(1) World War II was a "WAR"!"

And that means money *wasn't* spent? And therefore I'm wrong because...?

Oh, that's right - you admit I'm right in all of your following comments, here:

"...the Government spent a lot of money, and yes, taxes were raised..."

So, why are we arguing?

But you go on to quibble:

"though not just on "the wealthy.""

No, their taxes were only increased to an unbelievable %91 over $25,000. Go ahead, look it up.

" In fact over the course of the war while we spent and aproximately $306 billion, over $185 billion of that was raised NOT by taxes, but by War Bonds. 85 million Americans purchased them!"

And?

That money was then invested into programs that gave Americans money - by putting them to work.

Which is what helped us finally shake off the remaining effects of the Great Depression.

"Again, as a consequence of fighting for our lives and freedom the Government spent a lot of money but that does NOT make it a "spending program".

What's your logic here?

Money was spent. Taxes were raised. Sure, bonds were sold too. Almost all of this money went into programs which benefited the lower and middle classes, by putting them to work.

But because this was a spending program entered into on a grand scale to win a war...somehow that means it wasn't a spending program?

"I can't make you smarter..."

Don't worry about me. Worry about yourself. And while you're at it, educate yourself by actually providing a sensible answer as to why a government spending program is not a government spending program if the spending program funds a war.

That's like saying a purchase is not a purchase if you're buying a gun. That is, it makes absolutely no sense.

So you're saying we need to... (Below threshold)
ExSubNuke:

So you're saying we need to be on a war footing with a wartime economy (with all the rationing that goes with it) to get out of this?

Is that what you're saying?

ExSubNuke - you're joking, ... (Below threshold)
jim:

ExSubNuke - you're joking, right?

No, that's not what I'm saying.

What I'm saying is that a stimulus program which puts the poor and the middle class to paid work, and keep people paid money, is what we need.

What we also need is industry in this country, so we can start making things here again. Which is why public transit jobs are a particularly good idea - those are manufacturing, construction, production and maintenance jobs which can't be outsourced to another country.

I'm just making the larger point that the same sorts of solutions have worked before.

See, jim, I just wanted to ... (Below threshold)
ExSubNuke:

See, jim, I just wanted to make sure that wasn't what you were trying to say... because it keeps getting repeated that all the same "Shovel ready" construction and maintenance jobs were tried with the Great Depression (any bets on this becoming the "New" Great Depression?).

And then you state that we pulled out of it because of all the gov't spending associated with WW2.

That's why it sure sounds, to me anyway, that you're arguing we need to be (at least on the economic side) on a wartime footing. Cause it's been demonstrated in the past, that the sort of stimulous being tried (and magnificently fumbled) by this current admin, DOES. NOT. WORK.

Oh my God.1. It is... (Below threshold)
jim:

Oh my God.

1. It is proven historically and statistically that FDR's policies efforts pre-WWII helped the US out of the Great Depression.

The only dip in our climb out of the Great Depression occurred when FDR tried out other policies, and reduced the amount of programs in order to try and reduce the national debt.

2. FDR's policies were, specifically, to raise taxes on the wealthy and go into debt if necessary in order to put the lower and the middle economic class to work.

3. WWII was, *in addition to* something we fought because it was the right thing to do **and** in our own self-defense - a spending program whereby we raised taxes on the wealthy, went into debt if necessary, and put the lower and middle economic classes to work.

DO you get that WWII's **economic** organization and effect was exactly that of a stimulus program?

IF you do not get this, please tell me exactly what part of it you do *not* get, so I will explain that part.

Perhaps this is the key:</p... (Below threshold)
jim:

Perhaps this is the key:

The US does not have to go to war, in order to put as high a percentage of people to work as were put to work for WWII.

All that is really needed is that enough people be put to work that they have money to spend, and thus reinvigorate the economy.

So an infrastructure development plan will work just as well.

In economic terms, it almost doesn't matter what they make. But I'd much prefer it be something useful, too.

DO you get that WW... (Below threshold)
ExSubNuke:
DO you get that WWII's **economic** organization and effect was exactly that of a stimulus program?

IF you do not get this, please tell me exactly what part of it you do *not* get, so I will explain that part.

Oh, I get it. I "get" what you're saying. You're obviously missing what I'm trying to get across, so I'll spell it out very clearly.

What FDR did, didn't work to get the US out of the depression as it was. The exact same actions DID work when used on a wartime economy. So it's a question of SCALE.

It sure sounds to me (and I'll be generous and allow you might not be your thinking) like you're advocating that Obama adopt similar policies to what FDR did during the YEARS that the depression didn't get fixed. As opposed to the GREATER spending (as well as rationing, recycling, draft, etc...) associated with the WARTIME economy... that pulled us out of the depression.

I'm stating that, for the policies that you're advocating to work, we need a FAR GREATER commitment than what he's showing. One associated with a wartime footing. Else it's just wasteful "stimulus spending" that isn't going to work. Just like it hasn't worked EVERY, OTHER, TIME, it's been tried.

Doing nothing got us in ... (Below threshold)
Speller:

Doing nothing got us in this fix. When only 5% of the stimulus has been spent everything is supposed to be all better?
~mfellion | June 7, 2009 6:30 PM

What caused this recession was forcing banks, through accusing them of racism if they didn't, to give massive numbers of sub-prime mortgages to people who couldn't repay the loans. This caused a housing bubble and the bursting of that bubble caused the recession.

And who forced the banks to issue those sub-prime mortgages?
Obama and the Democrats, that's who.

Only 5% of the stimulus has been spent you say?
Why is that? Didn't the Democrats scare the daylights out of the nation saying that the stimulus bill had to be pass immediately and that the money had to flow RIGHT NOW?

Why has only 5% been spent 4 months later if they were telling the truth?
Why is 95% of that borrowed money sitting idle and accruing interest against American taxpayers?




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