Obama's Stimulus Events Are About Politics, Not the Economy
By Mary Kate Cary, Thomas Jefferson Street blog
In Washington, there's a phrase—"slow-walking"—to describe deliberately taking one's time in order to drag out the effects of a policy. That's what the Obama administration is doing with the massive $787 billion stimulus package. So far, only a fraction of the outlays has been spent, and according to a roundup in Politico this morning, the White House is leveraging every dime of that money in states that Obama won. In fact, 52 of 66 recent events to hand out stimulus money took place in states such as California, New York, Ohio, and Colorado—a "veritable map of Obama's election-night victories." Eamon Javers continues:
The stimulus bill has the potential to be a publicity bonanza for the Obama administration for years to come — through the 2010 midterm elections and beyond. As of mid-May, the administration had spent only 6 percent of the money Congress allotted for the program, and the White House says officials will continue to travel the country until all of the money is spent. The events generally come in the form of roundtable discussions, upbeat speeches and sweeping announcements of billions of dollars for local communities. Some have all the hallmarks of campaign events, featuring banks of television cameras, flag-bedecked stages and local politicians working the crowds. Many generate the kind of admiring local media coverage that politicians crave — and largely escape the attention of national outlets.
Politico also notes that at 14 additional events, Vice President Biden and cabinet members traveled to states that the Democrats lost narrowly and are hoping to turn into "blue" states in 2012. But here's the laugh of the day: "Politics plays no role in implementation of the Recovery Act or highlighting its successes. Period," said Liz Oxhorn, press secretary for the Recovery Act. Right.
The irony is that, according to Bloomberg columnist Caroline Baum, the economy is recovering without the stimulus money. With over 90 percent of it still unspent, she points out that the rate of decline in the real gross domestic product is slowing down from its previous highs—from 6 percent for the last two quarters to a projected 1.9 percent this quarter—due to actions by the Fed regarding monetary policy, not anything having to do with the American Reinvestment and Recovery Act. And yet, she points out, the amount of debt being handed off to future generations reminds her of the toxic "legacy debt" the government is worried about in the private sector:
This time around, a new president with solid majorities in both Houses of Congress was able to saddle future generations with trillions of dollars of debt less than a month after he took office. The Congressional Budget Office projects the debt-to-GDP ratio rising to 70 percent in 2011, the highest since the early 1950s, when the U.S. was winding down the war effort.
If you believe, as I do, that monetary policy is the more potent of the stimuli, that fiscal "stimulus" just transfers spending from tomorrow to today and from the private sector to the government, with no net long-term gain, then maybe it's time to stand up for the next generation.
Time for the administration to stop "slow-walking" all that debt to our kids.
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Tags: debt | Barack Obama | economic stimulus
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HOW THE STIMULUS PLAN HAS BEEN WORKING ALREADY AND WHY IT IS BOUND TO GATHER PACE
The stimulus plan in of itself has halted the dramatic plunge in business and consumer confidence with the very likely threat of an economic depression earlier in the year, and businesses and consumers taking a less weary and more upbeat attitude to the future. Maybe more than anything else this will be the most significant impact of the stimulus package in the long-run enabling a spectacular recovery from the real possibility of depression before its passage. Businesses and consumers have become more and more confident that spending from the stimulus in the upcoming months will provide a solid environment for economic activity thus encouraging investment, reducing the pace of job losses and encouraging consumer spending. In other words, the stimulus package has avoided “a cycle of economic downturn to depression” and is now about to engender “a cycle of economic upturn to recovery”.
The stimulus package cash handouts and other social initiatives have played no minor part in lessening the burdens on individuals of the economic downturn and the consequent increase in the number of people unemployed thus palliating the effects with regards to mortgage, health coverage and consumer spending.
The stimulus package has halted the lost of jobs in the areas of education and other state level services and enabled States to avoid budget bankruptcy (caused by the fall in revenues due to the economic downturn) with the result of avoiding indirect job losses in the private sector as well.
The stimulus package is bound to lead the way for new jobs creation to be followed suit by direct private sector investments with the consequence of increasing spending in the economy and accelerating economic recovery. It should be noted that jobs created by the stimulus will have a multiplier effect in the creation of jobs by private enterprises.
Perhaps more fundamental for long-term economic recovery, given the areas of investment of the stimulus package (infrastructure, energy and green jobs, education. etc.), it is the type of government investment required for renewing long-term economic growth. As was the case with FDR's New Deal in the 1930s and Eisenhower building of interstate highways and investment in the sciences in the 1950s, the stimulus package is bound to restructure the foundation of the US economy within which private enterprise will thrive.
The fundamental element in the criticisms levied against the stimulus package that it will increase the US deficit is the total disregard by most critics of what would have happened without the stimulus with respect to avoiding the real threat of a depression, raising business and consumer confidence and restructuring the economy. Thus providing a good foundation for real growth in the long-run (boostered by the Stimulus and led by private enterprise) with economic growth by itself and healthcare reform allowing for deficit
RE: Paul of MD
Re: South Carolina.
A little more info for you. Mark Sanford wanted to use the stimulis money to pay off our(SC) debt. well the Federal government said no you have to spend this money the way we tell you. So mark Sanford said keep it I don't want it. You want me to tell the people of SC to act fiscally responsable, and then tell me to do the opposite (when you have a debt and you get a little extra money you were not expecting iT IS FINANCIALLY RESPONSIBLE to pay off what you can of that debt. Now here's where our state legislature has stept in (and this is bullying at highest order) the federal government said fine we will give your money to another state but you still have to pay it back. you tell in what universe is this fair. So the state legislature decided well hell if we have to pay it back regardless if we get it or not then sure I guess we have no choice but to take the money. Puller is exactly right magic trick with this hand while steal your wallet with the other.
Politics as usual
This is an old trick. A President declares that a "stimulus" package is needed, and one is delivered. What actually takes place is that the administration counts the business cycle to run its' course, and they take credit for the recovery. The fact that the stimulus is mostly earmark nonsense is discounted by the voters who are emotionally invested in the President and party in power. Shell games and lipservice are the order of the day.
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