Three years ago today, President Obama signed into law the $825 Billion "stimulus" package passed by Nancy Pelosi and Harry Reid's Democratic Congressional super-majority. This enormous expenditure of borrowed money was sold and justified as a means to jump-start the American economy and "save or create" four million jobs. It has failed on its own terms (updated from a previous post):
(1) The president's economic advisors projected that in the stimulus would halt unemployment at eight percent. In its absence, they warned, unemployment could reach as high as nine percent. This was a major selling point of the bill. Two years and hundreds of billions of dollars later, the national unemployment rate remains above eight percent, and isn't even close to where it "should" be (six percent), based on the administration's projections. If the active labor force were the same size as it was when Obama took office (it has shrunk considerably due to discouraged workers), the national unemployment rate would be 11 percent. The true "U6" unemployment rate remains above 15 percent.
(2) The president said the stimulus would "lift two million Americans from poverty." US poverty levels have now reached all-time highs. In the year after the stimulus passed, 2.6 million Americans fell into poverty. Overall, 6.3 million more Americans are living in poverty today than when Obama took office.
(3) The president said middle class family incomes would soar by thousands of dollars thanks to his stimulus. As reported above, the national median income (a good measure of the middle class' collective financial standing) has dipped to its lowest level since 1997.
(4) The president incessantly trumpeted the promise of countless "shovel-ready" projects to sell the public on the stimulus. Earlier this year, Obama himself joked that such projects didn't really exist. Hilarious!
(5) The president guaranteed "unprecedented transparency" in the process of doling out stimulus dollars. Funds were then released to phantom Congressional districts and tax cheats, and were used to subsidize wasteful, redundant, and useless pork projects. As we now know, this "unprecedented transparency" also entailed rushing approval for reckless multimillion dollar loan guarantees to a politically-connected "green" firm, ignoring internal warning flags, and deliberately concealing evidence of impending failure until it was too late for Congress to intervene. Unprecedented!
(6) As I've discussed on several occasions, even if you *fully accept* the White House's own "jobs saved and/or created by the stimulus" numbers, the math works out to nearly $300,000 per job. Early analysis suggests that the president's 2012 jobs plan would likely trigger a reprise of that breathtakingly inefficient undertaking. Also, an independent on-the-ground study that doesn't rely on flawed government multipliers and formulas to measure the stimulus' true employment impact reveals that OMB and CBO's numbers are way off. To wit, CBO's latest estimate -- again, based on multipliers, not observations -- shows that the stimulus may have "saved or created" as few as 600,000 jobs.
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