The Non-Stimulus

IBD Editorials ^ | May 26, 2011 | Staff

[Kaslin]

Big Government: Getting sold a stimulus bill of goods was bad enough. Now we learn that price tag was $43 billion bigger than advertised, and that billions of stimulus bucks went to tax cheats.

According to a Congressional Budget Office report this week, the stimulus actually cost taxpayers $830 billion, not the $787 billion promised in early 2009, a 5.5% increase. And this figure has been steadily rising. The CBO put the stimulus's cost at $814 billion last November, and $821 billion in February.

But who cares? After all, the stimulus "saved or created" as many as 4.6 million jobs and boosted GDP by as much as 3%. And, given the Keynesian economic models the CBO employs — which simply assume more federal spending boosts economic growth and leads to more jobs — the bigger the stimulus the better.

Of course, the 13.7 million people out of work now might disagree with these models. And even the CBO admits that "a key disadvantage of the model-based approach is the considerable uncertainty about many of the economic relationships that are important in the modeling." Translation: We're pretty much guessing.

As we've pointed out in this space before, other economists have used actual empirical data and found zero job creation, or net job losses, from the stimulus.

In any case, while things could have been worse, as the CBO suggests, they most definitely could have been better. It's no coincidence that, after the 1981-82 recession, President Reagan's policies of tax cuts, deregulation and spending restraint produced a recovery that positively smoked, while Obama's opposite approach of massive spending, massive new regulation and the promise of massive tax hikes to come has produced one of the worst recoveries ever.

[Ken in Eastman]

“Saved or created” may be the most phony statistic created by a government agency - and that says a lot.

[Son House]

Democrats were told many times their Stimulus bill wasn’t going to grow the economy.

[RedMDer]

Snip: In one of his many efforts to sell the stimulus to a skeptical public, President Obama said that "at a time when everybody is tightening their belts, the last thing the American people want to see is that any of this money is being wasted."
Unfortunately, the scale of the stimulus waste just keeps growing.

[Son House]

Democrats wouldn’t listen to their critics even when they were trying to help improve that opportunity for economic growth.

[Son House]

Thank the Democrat’s Economist, just like that, Democrat first.

[Tzimisce]

And the crooks who did this too us will be rewarded with re-election or golden retirement packages.

Think about that while you’re job hunting. :)

[Ken in Eastman]

Sad, but true.

If anyone wonders about whether the stimulus was effective or not, they can ask a simple question:

“Was the money spent by the government more effective in creating real jobs than it would have been spent by the private sector?”

Anyone who believes government is more effective than individuals motivated by profit is being unrealistic or vastly ignorant of economics.

As the stimulus waste grows, more financial resources are being siphoned out of the private sector.