Church got cancelled because of snow so I thought I'd
chime in here instead.
We are at the one year anniversary of the stimulus
package and there is a lot of talk about it. Obviously
every article that you read on the subject is going to be
biased based on whether a person is a democrat or
republican. Democrats claim that the
stimulus has created jobs and therefore was a success.
Republicans say that people don't like it and it increased
the deficit significantly so it was a waste of money.
I'd like to offer a different perspective as an independent.
The stimulus package was necessary on account that it gave
people hope. It was passed when the stock market was
spiraling downward and many people were scared. For
the time being, people needed to feel as if the government
had a handle on things and the stimulus package provided
that. It may have been just as effective with a
smaller price tag or could have been more effective if even
more money was spent, I don't know. The stimulus
package gave people hope however and the stock market soon
rebounded in March, giving people the impression that things
were on the upturn.
People are now turning against the
stimulus package because it was not everything that they had
hoped for. It is possible that the stimulus will
deliver absolutely everything that President Obama said it
would but the American people expected more. They
expected that unemployment would have dropped instead of
risen. And more importantly they expected that the
economy would be in better shape overall by this point.
What about actual numbers? The stimulus passed in 2009
was said to have a hefty price tag of $787 billion.
Recently this price was raised by $75 billion. To be
honest I'm not clear why the price was raised except it
seemed as if no one figured in the interest that this would
cost us on the deficit.
The first report that was issued by the government after
the third quarter stated that 640,000 jobs had been created
or saved as a result of the stimulus. The reports that
were received contained numerous factual errors including
many instances where reported congressional districts did
not ever exist. Because of this and other problems,
the accuracy of the jobs created was called into question.
The fourth quarter report claims that just under 600,000
jobs were created or saved as a result of the stimulus.
This gives us 1.24 million jobs that have been directly
saved or created as a result of the stimulus package.
The
Obama administration is touting a number of jobs created
between 1.5 and 2 million as a result of indirect jobs
created. The reports only reflect jobs directly
created with the money spent. It is only fair to
reason that these additional jobs created causes a need for
more supplies, construction equipment, fast food meals, etc.
This indirectly adds to the job total as those companies
must have more workers to deal with increased demand.
So
far $263.3 billion has been spent of the stimulus money.
Using the most optimistic 2 million jobs number, this means
that the cost of each job has been $131,650. Mind you,
this is not salary that has been paid to each worker for a
year's labor but reflects only what has been spent in six
months of reports. When projects are finished and
completely paid for, that number will likely rise. So
yes, the stimulus has created jobs as promised. And
yes, the stimulus has come at a tremendous price tag.
One would think that we could create jobs at a much smaller
price tag than $131k per job, especially considering that a
third of those jobs were indirect jobs with no official
government spending. It also looks like the proposed
$5,000 small business incentive to hire workers look like a
pittance even at an overall price tag of $33 billion.
Not
that a 10% unemployment rate isn't a big problem for those
who are out of work, but 90% of Americans are getting little
to nothing for their tax dollars. I believe that we
can provide stimulus and provide lasting value for
Americans. Our infrastructure is crumbling.
Bridges and roadways are in bad repair. The engineers
who inspect these things give our infrastructure a grade of
D. They estimate that it will take $100 billion to
repair our infrastructure to where it should be. I say
write the check. $100 billion to repair our roads will
provide real, tangible benefits to everyone as well as
lasting value. It will provide more jobs, even if they
are mainly construction and manufacturing ones. And
the price tag seems like a drop in the bucket compared to
what has been spent in the last six months and even smaller
compared to the overall price that hasn't even been paid
yet.
One final note on all of this government money.
Not that anyone is a fan of big banks these days but they've
mostly held up their end of the bargain. Of the $700
billion provided by the Bush administration in TARP funds,
only $99 billion is still outstanding. Granted this is
a huge chunk of change and would almost fully fund by
proposed infrastructure improvements, it is much better off
than the stimulus. As mentioned earlier, the price of
the stimulus package was just raised another $75 billion for
a total of $862 billion. The Obama administration
keeps blaming the Bush administration for the current
problems. What is never mentioned is that it was a
democratic congress that passed the bills and Bush just
signed them into law. Just comparing the two bills, it
appears that Bush was far more financially smart. That
doesn't account for anything else passed during his watch,
just that TARP looks like the better of the two bills right
now.
