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Friday, January 23, 2009
Donald Lambro :: Townhall.com Columnist
Obama's Jobless "Jolt"
by Donald Lambro
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Was the Copenhagen Global Warming Summit Walk-Out a Win for the U.S.?


WASHINGTON -- It's going to take a lot longer than almost anyone thinks for the Obama administration to get the $825 billion stimulus money into the economy. Don't believe me? Read the Congressional Budget Office's recent analysis of the Democrats' plan.

President Obama has said he intends to give the economy "a jolt" by quickly injecting stimulus funds into the nation's economic arteries in the hopes of creating more than 3 million jobs. But according to the nonpartisan CBO, which crunches budget numbers for Congress, only a small fraction of the proposed $274 billion in infrastructure spending to jump-start the economy will be spent by the end of this fiscal year and the rest won't be disbursed until 2010 or later.

I've written in previous columns that the critical flaw in pump-priming spending programs is the length of time it takes to get money through the bureaucracy and into the pipelines at the state and local levels -- often after the recession is over. But the outlook seems grimmer than that.

Among CBO's findings:

-- Only about $26 billion, or 9 percent of the infrastructure stimulus, will be spent by Sept. 30, the end of fiscal 2009.

-- Less than half of the $30 billion in highway-construction money will be circulated over the next four years.

-- Incredibly, CBO says only about $4 billion in highway-construction funds will get into the economy by September 2010.

-- Obama talks about creating thousands of "green" jobs by pumping billions into biofuel, solar, wind and other technology. But most of those jobs are not going to be seen for many years. Only about one in seven dollars of the stimulus plan's $18.5 billion investment in renewable-energy resources and energy-efficiency programs will be spent by 2010, according to the CBO.

Its findings reaffirm Obama economic adviser Jason Furman's warning last year that infrastructure spending is one of the "less-effective options" for boosting jobs and economic growth. In an economic paper evaluating all the ways to end the recession, Furman doubted that any infrastructure spending "would generate significant short-term stimulus," because all too often the money is not spent "until after the economy has recovered."

Obama's advisers acknowledge the lengthy time it will take to get the money working on job-producing projects, but they say most economists believe this recession will last a lot longer than past downturns.

In fact, many economists now estimate the recession will be coming out of its slump sometime near the end of the year.

But this is only part of the story in this huge public-works boondoggle that experience tells us cannot and will not get the economy growing again. Here's where much of the money is going:

-- Government-run programs at the federal, state and local level. This stimulus bill will pour billions into 150 different federal programs, from the money-losing Amtrak rail service to the Transportation Security Administration.

-- $15.6 billion goes into Pell Grants to increase each student grant by $500, though the added money ends in two years. This may be a worthy thing to do, but it's not going to create any new jobs.

-- $54 billion will go to 19 programs that the Office of Management and Budget has rated as "ineffective" or "results not demonstrated."

-- Much of the money will go to federal programs that still have unspent funding in their accounts. For instance, the bill will pump another $2 billion into the Army Corps of Engineers' water-construction program that still has $1.5 billion in unobligated funds.

The Department of Housing and Urban Development's homeless-assistance program would get $1.5 billion despite an unobligated balance of $1.5 billion.

The General Services Administration has $3.3 billion of unspent funds, but GSA would get another $7.7 billion from the stimulus package.

-- Billions will be dished out under this so-called stimulus bill mostly to protect or create government jobs -- including money to renovate federal buildings, and $600 million for the government to buy brand-new cars and vans.

Overall, the stimulus would spend $16.4 billion on federal agencies that, among other things, will buy new computers, new office furniture for the Public Health Service, and add $50 million to the National Endowment for the Arts budget.

The money is being spread around like a slush fund, going out to every nook and cranny of the federal bureaucracy. This will not create a single new job, let alone stimulate the economy. Everyone from the Bureau of Indian Affairs to the Smithsonian Institution will get a piece of the action.

As for the plan's "making work pay" tax credit that will lower withholding taxes for low- to middle-class workers, it is estimated that this would add $10 to $20 per paycheck for those below the median income level.

That's far from the much-hyped economic "jolt" that Obama is promising beleaguered taxpayers.

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About The Author

Donald Lambro is chief political correspondent for The Washington Times.

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Sounds good
Sounds good to me! Why don't we just save all that money and let the free market correct the things which have gone awry due to government meddling. This would be the perfect solution.

TAX HOLIDAY, HELLO!
Give every taxpaying household a holiday from all income taxes and payroll taxes
each month until the end of 2009.
Give all companies a tax holiday during the same time period. No corporate taxes.
The nation's economy would snap back and jobs would be created. Many jobs would not be lost in the meantime.

Tax Holiday is an Excellent Idea
And would facilitate the free market recovery. I would pick a nit with the idea that the Congressional Budget Office is truly non-partisan. The CBO is a creature of the House of Representatives. It might have been pretty much non-partisan during the Republican dominance of the House, since it was still staffed mostly with people who voted Democrat, but the CBO serves the House in general - and the majority (and necessarily Speaker) are the major "boss" of the CBO. Is anyone really under the illusion that Pelosi allows anyone, or any office, under her control to be non-partisan?

WHY
If the leading economist say the recession will rebound at the end of the year and yet it will take two years to get federal money to (supposedly) get us out of the recession, WHY do anything. Let the free market correct itself.

I am willing to a four year holiday
The best thing this president and congress can do is give the citizens of the United States a four year holiday. No stimulus checks, no bailouts, no welfare, no tax refunds by people who paid no taxes.

Taxes & the Free Market
we need to revamp our entire tax system. Starting with Ending Income and payroll taxes and going to a Fair tax like a federal sales tax. More money in your pocket more to spend. We also need to stop the out of control spending by the govt, and end regulation on the market. If a market is regulated it is not free, with every regulation that is placed on the market the capitalist system dies a little, and socialism/communism grows.

End Corporate Income Tax
That would provide an immediate jolt to the economy by increasing employment, increasing salaries, increasing dividends, increasing exports, and increasing corporate investment. Within a year, lost tax revenues would be replaced by increased individual income taxes.

It would also help to eliminate all regulations on corporations. The main reason for regulations and the double-tax corporate income tax is so that the federal govwernment can meddle.

I suspect
that we DO need to spend quite a bit of money on infrastructure. However, spending it on GSA and Amtrak and calling it an 'economic stimulus' is not exactly what I had in mind.

Obama
has got to quit believing Al Gore and the Green idiots.

Wake up Obama. There's a reason why Rush wanted you to fail... so America can succeed.

I hope Obama
takes note of the polls revealing voters put global warming initiatives down at the bottom of a long list of possible uses of the "recovery" package.

Now that the dust has settled
and the blind hatred the media stirred up within the American people starts to die down I am willing to bet people will start the rationalization process. Beginning with the fact that instead of the economy, the first acts of office under Obama where to ensure liberal agenda items like gitmo and abortion. He signs a document calling for the closing of gitmo and then repeals a band on funding for abortion in foreign countries. Please tell me where the economy is his first priority? It is not, it is to sink this country in a pit of despair and dependence. God help us because our president isn’t going to.

Let the free market correct itself.
Seems to me that the unfettered free market is doing just what it should do, find the cheapest source of labor that is possible. Tax cuts to most (2/3) domestic and foreign businesses that paid no federal taxes to begin with over the last decade, won't do anything to stop the downward employment spiral in the US.

Everything that is not nailed down by physical necessity is vulnerable to outsourcing and offshoring, and what remains here in the US is vulnerable to H1-B visas, automation, technology, and illegal immigrants.

The amount of former working taxpaying US citizens that will become victims of the global economy will likely continue to multiply and most will become members of the "entitlement" portion of society that conservatives so despise, even if many are/were conservatives themselves. Losing your job and becoming unable to find another for long periods resulting in receiving any government assistance must mean that you can no longer considered to even be a conservative any longer. Survival of the fittest and most fortunate=Social Darwinism.

GOOD NEWS
The slow pace of the "stimulus" is the good news. The bad news is that we will be a permanently socialist country in its wake>
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