Wednesday, July 1, 2009

Let The Judging Of The Stimulus Begin

As the White House Press Secretary instructed yesterday . . .

Obama promised that if we passed his economy-busting stimulus package, all would soon be right with our economy and unemployment would top out at 8.6%. So how are we doing?

Unemployment, which long ago burst through the ceiling Obama promised us, has again increased. Another 437,000 jobs were lost in June. This from Tim Blumer at Bizzy Blog, doing the math on the pace of the stimulus:

ADP’s reported June drop of 473,000 is a whole 12,000 jobs below May’s revised 485,000.

At that steady rate of “improvement,” the economy will start adding jobs in October 2012, after having lost over 9,000,000 jobs in the meantime

Hmmmm, that is pretty bleak. Is there any good news on the tax receipts for June? . . . Ummmmm, nope. They continue to fall, also.

Has there been any good news of late out of Washington.

Oh yeah . . . Obama is going to save the planet by massively taxing our economy and driving our energy sector to its knees. I think you can call that doubling down on the stimulus. That's not too good.

Neither is the fact that the the left is trying to figure out how to massively increase taxes to pay for this non-stimulating stimulus.

Hold it, hold it. There is some good news. As Steny Hoyer wrote a few days ago, "Democrats won't be the part of deficits." They plan to require Congress to fully fund all of its newly enacted goodies via pay-go legislation. Well, the legislation does allow massive borrowing to enact Obama's pet projects, but right after that, by God, our socialist overlords are going to be the paragons of fiscal responsibility.

Update: James Pethokoukis, blogging at Reuters, wonders how Obama, with his rosy scenarios, got it all so wrong.

It’s not so much that a more negative forecast would have prevented Obama from spending large amounts of money, it’s that he would have been forced to tilt the stimulus more in favor of tax cuts which work a lot of faster than government spending (though both are pretty inefficient as “stimulus”).

And Obama wanted to spend billions on his “investment agenda (healthcare, education, infrastructure), not tax cuts. (And if he had spent the $2 trillion that some liberals wanted on stimulus, it surely would have crowded out the rest of his agenda, plus rattled the bond markets.) So he gambled that monetary policy would keep the economy from getting as bad as it has. And he lost. Did Team Obama purposely give a bad forecast, or did its old fashioned Keynesian approach merely lead it astray? Good question. Either way, it’s the Obamacrats’ economy now.

So how would you judge this stimulus?


billm99uk said...

I thought the whole lesson of the recession before last was that Keynesianism didn't work. What happened? Did someone demand a recount?

MK said...

And let me guess, hussein o is nowhere to be found now, or at least won't answer any questions about it.