Remember this wonderful special event, Comrades?
Back in 2009, the Obamas, our glorious, “historic” new 1st Couple, went out on a romantic Valentine’s Day date in Chicago. That was the day after, appropriately a Friday the 13th, when Congress passed Barack Obama’s $830 billion “stimulus,” which was guaranteed to fix our economy with “shovel ready” jobs, with hundreds of thousands going to work repairing roads, bridges and levees.
This steaming pile was shovel ready, though. It was another couple thousand pages that no one in Congress read. There was no time. It was an “emergency,” so big an emergency that the One didn’t even sign it until 4 days later at a Colorado photo op.
When Obama signed this bill, which was actually just a way to make sure one of his mascot groups, public employee unions, were protected from any layoffs and to funnel cash into cronies coffers, the labor participation rate was 65.9%. Now it’s 63%. What an awesome success!
Well, it’s not like they wasted all the money. From the Wall Street Journal:
Team Obama worked with Democrats in Congress to exceed his minimum request by more than 30%. But after the failure of the stimulus the same liberal economists who had enthusiastically supported the plan would claim that its main flaw was that it was too small.
Shortly after the passage of the Recovery Act in 2009, Vice President Joseph Biden urged local politicians not to spend the money on “stupid things.” They ignored his advice, and so did Mr. Biden. The federal government poured billions into the government and education sectors, where unemployment was low, but spent only about 10% on promised infrastructure, though the unemployment rate in construction was running in double digits. And some of the individual projects funded by the law were truly appalling. $783,000 was spent on a study of why young people consume malt liquor and marijuana. $92,000 went to the Army Corps of Engineers for costumes for mascots like Bobber the Water Safety Dog. $219,000 funded a study of college “hookups.”
In aggregate, the spending helped drive federal outlays from less than $3 trillion in 2008 to $3.5 trillion in 2009, where federal spending has roughly remained ever since.
The legacy is a slow-growth economy: Growth over the last 18 quarters has averaged just 2.4% — pretty shoddy compared to better than 4% growth during the Reagan recovery in the 1980s and almost 4% in the 1990s recovery.
The failure of the stimulus was a failure of the neo-Keynesian belief that economies can be jolted into action by a wave of government spending. In fact, people are smart enough to realize that every dollar poured into the economy via government spending must eventually be taken out of the productive economy in the form of taxes. The way to jolt an economy to life and to sustain long-term growth is to create more incentives for people to work, save and invest. Let’s hope Washington’s next stimulus plan is aimed at reducing the tax and regulatory burden on American job creators.
Of course, the stenographers in state-controlled media think that this “stimulus” was a smashing success. For example, Time Magazine’s Michael Grunewald, in his story about the report on the stimulus to be released this week:
Five years ago Monday, President Barack Obama visited the Denver Museum of Nature and Science to sign the American Recovery and Reinvestment Act, his $800 billion stimulus bill. At the time, the U.S. economy was losing 800,000 jobs a month. In the fourth quarter of 2008, it had contracted at an 8% annual rate, a Depression-level free fall.
“Today does not mark the end of our economic problems,” Obama said on Feb. 17, 2009. “But it does mark the beginning of the end.”
And so it did. The stimulus quickly became a national joke, mocked by the right as a massive boondoggle and by the left as a pathetic pittance. A year after it passed, the percentage of Americans who believed it had created jobs was lower than the percentage of Americans who believed Elvis was alive. But after an epic financial crisis, the Recovery Act did launch a recovery. The economy started growing again in summer 2009. It started adding jobs again in spring 2010.
Here’s the best part:
The main conclusion of the 70-page report — the White House gave me an advance draft (emphasis mine)— is that the Recovery Act increased U.S. GDP by roughly 2 to 2.5 percentage points from late 2009 through mid-2011, keeping us out of a double-dip recession. It added about 6 million “job years” (a full-time job for a full year) through the end of 2012. If you combine the Recovery Act with a series of follow-up measures, including unemployment-insurance extensions, small-business tax cuts and payroll tax cuts, the Administration’s fiscal stimulus produced a 2% to 3% increase in GDP in every quarter from late 2009 through 2012, and 9 million extra job years, according to the report.
“Job years?” So in other words, if the stimulus produced any jobs, they were part-time ones. Nice Orwellian language.
Mr. Grunewald explains why he loves the “stimulus.”
My obsession with the stimulus has focused less on its short-term economic jolt than its long-term policy revolution: I wrote an article about it for TIME titled “How the Stimulus Is Changing America” and a book about it called The New New Deal. The Recovery Act jump-started clean energy in America, financing unprecedented investments in wind, solar, geothermal and other renewable sources of electricity. It advanced biofuels, electric vehicles and energy efficiency in every imaginable form. It helped fund the factories to build all that green stuff in the U.S., and research into the green technologies of tomorrow. It’s the reason U.S. wind production has increased 145% since 2008 and solar installations have increased more than 1,200%. The stimulus is also the reason the use of electronic medical records has more than doubled in doctors’ offices and almost quintupled in hospitals. It improved more than 110,000 miles of broadband infrastructure. It launched Race to the Top, the most ambitious national education reform in decades.
Green technology? You mean like Solyndra and the many sons of Solyndra?