Rock 'N' Roll 'N' Politics...EDITORIAL: Rewriting economic history The stimulus has made things worse
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"It was only after the [fourth]-quarter numbers came in ... that suddenly everybody looked and said the economy shrank 6 percent," President Obama said Tuesday. He was trying to defend his administration's predictions that the unemployment rate would peak at 8 percent if his $787 billion stimulus program was passed. The stimulus was passed in February, and the economy has gotten worse. "We and everyone else misread the economy," Vice President Joseph R. Biden Jr. said Sunday, defending the stimulus on ABC's "This Week." Backpedaling aside, it's not accurate to say the administration didn't know about the fourth-quarter data before officials made their predictions. On Feb. 28, the administration forecast an average unemployment rate of 8.1 percent for this year. This can be found in "Economic Projections and the Budget Outlook," which was published after gross domestic product results for the fourth quarter had been released to the general public. Unemployment is now pegged at 9.5 percent, and rising. What makes Democrats nervous is that the unemployment rate is going up faster under Mr. Obama than during the close of President George W. Bush's administration. From February through June, the unemployment rate has increased by .4 percentage points per month. During Mr. Bush's last five full months in office, unemployment rose by .3 percentage points per month. During that same length of time, 2.6 million jobs were lost under Mr. Obama, while 2.1 million were lost under Mr. Bush.
It should come as no surprise that the stimulus has made things worse. The government is not creating jobs so much as it is reallocating resources in the economy. The stimulus moves around almost a trillion dollars from what Americans would have spent it on to things that the government prioritizes. Naturally, such central direction of the economy also moves jobs. Moving people from one job to another temporarily generates unemployment. Administration officials simply made promises they couldn't keep. On Jan. 25, Lawrence H. Summers, the White House chief economic adviser, said that the economy would start improving "within weeks" of the stimulus plan being passed. "If we fail to act, we are likely to lose millions more jobs, and the unemployment rate could reach double digits," Christina Romer, chairman of the President's Council of Economic Advisers, warned on Feb. 4. At the end of May, President Obama was declaring that "we are already seeing results" from the stimulus working. We're not sure what results Mr. Obama sees, but even a slight uptick in the economy won't vindicate his massive government spending.
The yardstick isn't whether growth eventually appears, but whether it is smaller than what otherwise would have occurred. Until that uptick arrives, the problem isn't that administration predictions were made before people realized how bad the economy actually was. The problem is that the stimulus isn't working. It is making the economy worse, and politicians are pushing even more stimulus spending as a solution. With Democrats reaching a filibuster-proof majority, that losing strategy isn't likely to change any time soon.
From the The Washington Times:
http://www.washingtontimes.com/news/2009/jul/09/rewriting-economic-history/
Comments (12)
"The yardstick isn't whether growth eventually appears, but whether it is smaller than what otherwise would have occurred."
That is a total GOTCHA line. Just how does one measure hypothetical growth? That defies basic scientific method. If it was so clear and easy then the economy would be fixed already.
I fail to see how this rewrites any history. In fact it looks like the New Deal fully vindicates the administration's approach. What on Earth does the WP mean by the headline? If you are just calling the stimulus pork, then what about the collapsing bridges of Minnesota and strained infrastructure of Ohio, and the poorly funded community health centers for uninsured people all around?
The stimulus is not spent yet, and the markets are playing out a cycle that started well before Obama took office. So what's your point? He has three more years any way you slice it. The real thing that is going on here is a general effort to portray the Democratic majority as incompetent with an eye toward stalling HEALTH CARE REFORM and the upcoming election.
This is not newsworthy brother!
"The government is not creating jobs so much as it is reallocating resources in the economy. The stimulus moves around almost a trillion dollars from what Americans would have spent it on to things that the government prioritizes."
Hmmm, I was going to be spending Federal revenues? Spending is by definition an allocation of resources. It happens every year, stimulus or not, and is a reflection of what the House thinks is worthwhile. Don't get that one.
The government is spending future revenues in an attempt to "borrow" now and pay it back later when business is back up. If there had been a tax increase then this editorial point would have merit, but there wasn't.
That editorial doesn't even have a byline on it. Might as well have been written by Rupert Murdoch.
Ron Paul: Obama Stimulus Package Will Turn Recession Into Depression
"The markets are playing out a cycle that started well before Obama took office. So what's your point? He has three more years any way you slice it"
Obama is not helping, he's making things worst. It's like he's not even trying to fix things. He's as bad as GWB, if not worst. I have to ask what change as he talked about during his campaign. I think there's a name for him & GWB, Reprocrats. Other than his useless semantics, I don't see him any diffrent from Bush. I wish I had good things to say about Obama.
Well the jury is out, but the real revelation is that conventional politics has pretty much been jacked by the corporate/consumerist conventional wisdom. I agree that the major parties are not that much different, besides a few "social" issues.
I just don't know. The whole thing tires me. I have the unescapable sense that a certain way of thinking is ending in this world. Let's face it, our way of life is not sustainable on almost every level. The depression would have come one way or another, that's my opinion!
Then again, some people make it work on a community level.
Politics is just divide and conquer, so I will stop lighhting into your posts.
However that OP Ed was pretty lame! Haha.
Well whether I like it or not, we've got B.O. for another three years. I don't see him getting re-elected IMO. My bets are on Palin, although I prefer Ron Paul.
Thanks for posting!
If Palin is electable then my moral American compass is truly haywire. The reason that BO and GWB seem close is because Americans are close. The reason the average citizen is pretty cloe to the middle is because they are too busy to care about much more than their mortgage and stock portfolio. It is all an illusion of unsustainable proportions IMO. They convinced us that capitalism would go and go, but it is based on finding new property to leverage into new products. This the explosion of "intellectual property", "financial products", and the necessity to enter new markets with cheap labor, materials or newly enriched consumers. It is always more more more, and the "free market" that you seem to cherish is just another expression of unadulterated unsustainable consumerism. It may sustain the nation on the top pf the heap, but even that cannot last.
It is stressful to think about, but that is just due to my very deep connection to the world and an attachment to my way of life. But that is not who we ARE. Who we are is a much deeper question that economics.
"free market" that you seem to cherish is just another expression of unadulterated unsustainable consumerism"
It's us citizens controlling the market without government regulation. It goes beyond consumerism, it come downs to things like buying gas for your car to go to work, & vacation, groceries, paying the bills. I know all the problems that consurmerism can bring, but it does help sustain our economy, but free market is not just another term for consumerism. It's letting us citizens run the economic system without gov interference plain & simple.
"It is stressful to think about, but that is just due to my very deep connection to the world and an attachment to my way of life. But that is not who we ARE. Who we are is a much deeper question that economics."
I here ya, but I'll add that economics shows part of who we are. It's not everything, it's a fact of life I'd like not to worry about. But it sits there ready to make it's move into your life at the worst, & best of times.
Well, I don't think it is quite so easy to express my particular disatisfaction with the state of the world. Because it is so contradictory and full of irony, I refuse to hang my hat on the placebo of economic debate. I have never come accross a religion yet that puts economics as the figurehead for the meaning of life. But I see where you are coming from, and I think that statistically it can be revealing. But it is not a solution IMO.
"I have never come accross a religion yet that puts economics as the figurehead for the meaning of life"
Well know it is part of the sytem of religions, &/or acknowleged as a fact of life. You do have types of government in some religions. The church is considered a form of government, & in that you do have a type of economics the tithe for instance. And even that is a great debate within the church.
"Well, I don't think it is quite so easy to express my particular disatisfaction with the state of the world. Because it is so contradictory and full of irony, I refuse to hang my hat on the placebo of economic debate"
True, but sorry to say economics is sure as death, & taxes. Wish it was just a placebo.
Which is exactly why religion and spirituality are not the same thing.
Religion is a belief syetem, but I've never really understood sprituality. It seems like such a loose, & subjective term. you do have it used or mentioned in religion a lot. Anywhere from self-relization to Chritianity.