New Evidence That The Obama Stimulus Was a Bust

powerline ^ | 8/22/10 | paul

[Nachum]

The debate in the popular press and on blogs about the efficacy of the 2009 stimulus bill generally has been superficial on both sides. Those who tout the bill point to a study by liberal economists Alan Blinder and Mark Zandi purporting to show that the fiscal stimulus enacted under Presidents Bush and Obama lowered the unemployment rate by approximately 1.5 percentage points. However, as Lawrence Lindsey points out in the Weekly Standard, this study assumed that the recent stimulus has been roughly as effective, dollar for dollar, as past programs. It then multiplied past measures of job creation by the number of dollars spent this time around.

[Republican Wildcat]

Let’s even say for the sake of argument that it had worked as it was sold - since it was debt financed it just transferred the hard times to a future date. That solves nothing.

Since it didn’t work at all - it just created even more hard times for a later date when the bill becomes due. Ridiculous policy.

[blam]

"blam, since you seem to be the economics guru here at FR, I wonder if you have heard of or read the book The Rational Optimist?"

Nah...not by a long shot. I'm a retired chip-maker and don't guru that much anymore either.

I post on the economy, stocks and finance because I know so little...I learn from everyones questions and the answers.

Look a little closer and you'll see that I never give any advice.(sorry)

[Liz]

[Liz]

$6.4 Billion Stimulus Goes to Phantom Districts
watchdog.org | November, 2009 | staff
FR Posted August 09, 2010 by bronxville

...Just how big is the stimulus package? Well for one, it has doubled the size of the House of Representatives, according to recovery.gov, which says that funds were distributed to 440 congressional districts that do not exist.

According to data retrieved from recovery.gov, nearly $6.4 billion was used to “create or save” just under 30,000 jobs in these phantom congressional districts–almost $225,000 per job. The web site operates on an $84 million budget and is tasked with monitoring the distribution of the $787 billion stimulus package passed by Congress–which, for the record, counts 435 members–in early 2009...

SOURCE http://watchdog.org/1530/6-4-billion-stimulus-goes-to-phantom-districts/

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Americans are awakening to the fact that govt insiders are mishandling trillions in "stimulus" that federal monies are being illegally directed to Democrat campaign coffers, and/or wire-transferred offshore into personal accounts......and being laundered in the states.

Keep in mind, much of the stimulus was sitting in Washington. Ohaha hoarded it (together with his several slush funds), doling it out to imperiled Dems' 2010-12 campaigns.

[FDNYRHEROES]

I see someone bent the curve afterall.....

[Pining_4_TX]

You are wise not to give advise, for predicting the future is a fool’s game.

I do think you would enjoy the book, The Rational Optimist. He has an interesting take on history and our current obsession with doom and gloom.

[Pining_4_TX]

*sigh* Of course, I meant advice, not advise. I need more coffee.

[DrC]

Can you imagine where the economy would be right now if Obama in fact had put $8700 into the hands of every American rather than steering it to favored interests? He could have easily done this through an extended payroll tax holiday, for example. The economy would have taken off like a rocket.

Each dollar of deficit-financed federal spending increases the economy by only 50 cents in the short run. In contrast, every dollar of tax reductions increases the economy by $1.50. But the latter finding also implies that each dollar of tax increases costs the economy $1.50. Thus, once you consider that deficit-financed federal spending eventually has to be paid for through higher taxes, the huge advantage that tax cuts have over deficit spending as a way to boost the economy becomes enormous. Sadly, it doesn’t fit into Democrat preferences to “share the wealth.”

Hence Obama has ended up giving us a perfect case study of the adverse effects of relying on deficit-financed stimulus as compared to the rapid recovery we enjoyed when Ronald Reagan sensibly lowered taxes rather than boosted spending to address very similar economic conditions to those inherited by Obama.

[DrC]

If you want a guru, try Kevin Hassett:
http://www.bloomberg.com/news/2010-08-23/bury-keynesian-voodoo-before-it-can-bury-us-all-kevin-hassett.html