Romer: Impact of stimulus will level off
WASHINGTON — A top White House economist says spending from the $787 billion economic stimulus has already had its biggest impact on economic growth and will likely not contribute to significant expansion next year.
Christina Romer, the chair of President Barack Obama's Council of Economic Advisers, said Thursday that the $194 billion already spent gave a jolt to the economy that contributed to growth in the second and third quarters of the year. She told a congressional panel that by the middle of next year, the impact of the stimulus will level off. Romer said spending so far has saved or created 600,000 to 1.5 million jobs but warned that unemployment will remain high, above 9.5 percent, through the end of 2010.
Now consider this released yesterday:
7 Months After Stimulus 49 of 50 States Have Lost Jobs
America Now Over 6 Million Jobs Shy of Administration's
The table below compares the White House's February 2009 projection of the number of jobs that would be created by the 2009 stimulus law (through the end of 2010) with the actual change in state payroll employment through September 2009 (the latest figures available). According to the data, 49 States and the District of Columbia have lost jobs since stimulus was enacted. Only North Dakota has seen net job creation following the February 2009 stimulus. While President Obama claimed the result of his stimulus bill would be the creation of 3.5 million jobs, the Nation has already lost a total of 2.7 million – a difference of 6.2 million jobs. To see how stimulus has failed your state, see the table below.
Click on article to see chart for the individual states.
Although I do believe that the stimulus has "saved" jobs primarily teachers, police, fireman and other public sector jobs, that is not what a stimulus is supposed to do. Saving jobs is really not rel event at all. A recession is a slow down in the economy which causes unemployment. The purpose of a stimulus is to "stimulate" the economy which will increase employment.
Saving jobs does not stimulate the economy, at best it can help stem the recession because more people will have more money to spend than if they were unemployed-obviously. The same is true with unemployment benefits, giving unemployment to the unemployed does not stimulate anything, in fact it inhibits people from actively seeking employment, why work when those that are working pay for you not to work? which is exactly what happens when someone collects unemployment. Not that we should do away with unemployment benefits but the idea that it is somehow stimulative is ridiculous.
Now consider this graph:
Now looking at the above graph it appears like the more of the stimulus they have spent the more unemployment rises. Is there a correlation? Perhaps slightly since unlike government businesses live in a reality based world, not a hypothetical one. All that spending which sucks money from the private sector along with all the bailouts, health care reform plans, regulatory reform plans,cap and trade and all the other uncertainty thrown into the business world has frozen prudent business planning and everyone is waiting to see what will happen. When businesses are hunkering down, they are not employing, they are laying off.
The other important item on the graph is that black dotted line. That Projected Unemployment Without Stimulus. As you can see we have blown right by that with stimulus. The 8.8% projection which was to happen if we did nothing is now 9.8% so we have spent or are on the way to spending 787 billion dollars to be worse off than we would have been had we done nothing. Who came up with that worse case if we do nothing number? Christina Romer, the same Christina Romer who is now telling us (see story 1) that all that debt we incured to keep ourselves from reaching that terrible 8.8% unemployment "has already had its biggest impact on economic growth and will likely not contribute to significant expansion next year" and that "unemployment will remain high, above 9.5 percent, through the end of 2010"
It would be bad enough if we had spent our children's future away to keep unemployment just one percent above what we would have, based on the projections of the "smartest people in the world", but that doesn't even show how far off they are .
As you can see our 787 billion was spent in order to keep us at a maximum of 8% unemployment and by now we should have begun to gain jobs. But the facts are that we are still losing jobs and the very same people who said that spending that tremendous sum to "stimulate" the economy would stop the recession and the job losses are now telling us that not only will it not do what they told us, we are stuck with the current conditions (minimum) for another year (minimum).
Why isn't this administration being excoriated in the media? Why does anyone have any faith in their ability to manage an economy, which isn't their job anyway but we Americans seem to to have abdicated that right to a bunch of academics to do so.
This isn't a small thing, this is a very big thing. Ask yourself this, what if they had not spent any money to stimulate the economy, what would have happened?
Well Christine Romer the architect of this disaster says that spending all this money "has saved or created 600,000 to 1.5 million jobs", which of course is nonsense and totally unprovable and something no other Administration would get away with. Now we are being told "well that's about it don't expect much more stimulus from all that money". That means that since there is still more than a half a trillion to spend it basically is not going to do much of anything at all! "[the] economic stimulus has already had its biggest impact on economic growth and will likely not contribute to significant expansion next year" So why are we going to spend it? For kicks and giggles? Or so that we can make the graph below look worse than it already does and totally impoverish my grand kids.
As remarkable and patheticly inacurate as these predictions and projections are. The ineptitude the waste and outright stupidity of all this debt is. There are elitist nincompoops who say we need to spend more money. The reason , they reason in their little minds that the stimulus is not working is because it is not big enough. We must create more debt, more waste, more corruption and then the economy will be sufficiently stimulated to recover. Insanity.