Obama 862 Billion Dollar Stimulus Package - Three Years Later. February, 2012 marked the third year anniversary of Obama's stimulus package. Has the stimulus delivered on Obama's promises?
Obama 862 Billion Dollar Stimulus Package - What was the Stimulus for?
The stimulus, also known as the American Recovery and Reinvestment Act of 2009, is an economic stimulus plan that was signed into law by President Barack Obama on February 17, 2009.
The main objectives of the stimulus were to 1) save and create jobs almost immediately; and 2) provide temporary reliefe programs for those most impacted by the recession and invest in infrastructure, education, health, and ‘green’ energy.
The original, approximate cost of the economic stimulus package was estimated to be $787 billion at the time of passage. The Act included direct spending in infrastructure, education, health, and energy, federal tax incentives, and expansion of unemployment benefits and other social welfare provisions. The Act also included many items not directly related to economic recovery such as long-term spending projects (e.g., a study of the effectiveness of medical treatments) and other items specifically included by Congress (e.g., a limitation on executive compensation in federally aided banks added by Senator Dodd and Rep. Frank).
The rationale for ARRA was from Keynesian macroeconomic theory which argues that, during recessions, the government should offset the decrease in private spending with an increase in public spending in order to save jobs and stop further economic deterioration.
Obama 862 Billion Dollar Stimulus Package - How is it being paid for?
The stimulus is being paid for, in a nutshell, by printing more money. This, in turn, equals MORE debt:
"Even before Obama walked through the White House door, there were plans for $1 trillion of new debt," said Niall Ferguson, a Harvard University historian who has studied borrowing and its impact on national power.
He now estimates that $2.2 trillion in new government debt will be issued this year, assuming the stimulus plan is approved.
"You either crowd out other borrowers or you print money," Ferguson added. "There is no way you can have $2.2 trillion in borrowing without influencing interest rates or inflation in the long term."
Ferguson was particularly struck by the new borrowing because the roots of the current crisis lay in an excess of American debt at all levels, from individual homeowners with subprime mortgages to Wall Street banks who let their balance sheets balloon.
"This is a crisis of excessive debt, which reached 355 percent of American gross domestic product," he said."It cannot be solved with more debt."
The other option Obama has brought forward to help pay for the stimulus is to tax the "rich" (those making $200k and above).
As for the just as troubling question of who ends up footing the bill of this "fully paid" for stimulus act, here are the details.
Earlier today, the OMB director Jack Lew gave some so far largely missing information when he laid out how the president plans on paying for the Stimulus Act (http://www.c-spanvideo.org/program/WhiteHouseDailyBriefing1719). Specifically, Obama and his advisors believe they are "over achieving" by raising more ($467 bn) over 10 yrs to pay for the jobs package now. So on an annual basis, tax increases will be as follows:
Per Year (Beg Jan 2013)
1) Itemized Deductions (ie $250k or higher income $40.0 bn
2) Hedge Fund managers $ 1.8 bn
3) Oil & Gas Industry $ 4.0 bn
4) Corp Jet Depreciation $ 300 mm
The answer: THE JOBS BILL WILL BE PAID FOR EXCLUSIVELY BY TAX INCREASES (NO SPENDING CUTS)
So, the stimulus is being paid for by printing more money, that will someday become worthless, and by increased taxes.
Obama 862 Billion Dollar Stimulus Package - What did Obama promise?
- americanelephant.com
“Today does mark the beginning of the end.”
“This is the most sweeping economic recovery in history.”
“This package is the right size, it is the right scope, and it has the right priorities to create 3 to 4 million jobs!”
“The Federal government is the only entity left with the resources to jolt our economy back to life”
This sounds amazing! We will get people back to work and jolt the economy!
Obama 862 Billion Dollar Stimulus Package - What is Obama saying now?
“I didn’t over promise.” “Shovel ready was not as shovel-ready as we had expected.”
Yes, that comment got a good laugh out of some, but was it funny?
Obama 862 Billion Dollar Stimulus Package - What Didn't Happen?
Here are the promises and the results, to date, of the Obama stimulus:
- Unemployment was supposed to top out in the summer of 2009. Didn’t happen, did it?
- Unemployment was supposed to be at 6% by today. Didn’t happen, did it?
- We were supposed to have a new and thriving green energy industry that would be flourishing. Didn’t happen, did it? Just opened up more corruption and showed even more incompetence.
- We have nearly 13 million Americans out of work today. Didn’t happen the way he said it would, did it?
- We have the longest period of unemployment since the Great Depression. Didn’t project that, did he?
This is worse than the Great Depression. Didn’t tell us that would happen, did he?
- We have the worst string of long term unemployment in history and 40% of those unemployed have been without a job for 27 weeks or more.
- Including the under-employed there are 26 million people out if work and are in poverty now. That’s deplorable and it is an embarrassing shame, isn’t it?
- And, the 50% rate of unemployment among young people is the highest rate since we began breaking unemployment out by age in 1948.
We tried to tell him, time and again over the three years, but he didn’t listen, did he?
- We have proven you cannot spend your way to prosperity, especially when you have a bill that was poorly designed and as stupidly organized as this one was.
- Today we have corruption all around us – like Solyndra and Sun Power and all the other “green energy companies”, don’t we?
Feature image courtesy of politics.blogs.foxnews.com
Obama 862 Billion Dollar Stimulus Package.
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