The Stimulus Seems to have failed

[lomiller]

New jobs report is out and over the last 12 months the private sector has created 1.7 million jobs while public sector jobs have declined by 400 thousand. Once again we see the biggest problem the US economy is facing is the fact the Stimulus was to small and ended too early

 

[michaelsuede]

New jobs report is out and over the last 12 months the private sector has created 1.7 million jobs while public sector jobs have declined by 400 thousand. Once again we see the biggest problem the US economy is facing is the fact the Stimulus was to small and ended too early

Stimulus spending assumes government can create jobs.

In order for the government to spend money, it must first take it from someone else. If not by force, then through devaluation.

No matter how the government gets its money, it is only spending money that it has first taken from the private sector of the economy.

By the government spending money, it is assumed that the people government gives this money to will know how to create more jobs than the people who originally had the money in the first place.

Clearly this is ridiculous.

 

[ideogram]

Do you know where the stimulus money went?

Let me spell it out.

http://online.wsj.com/article/SB124691958931402479.html

 

[Roger Ramjets]

Let me spell it out.

http://online.wsj.com/article/SB124691958931402479.html

"The U.S. Department of Agriculture calculates that for every $5 of food-stamp spending, there is $9.20 of total economic activity, as grocers and farmers pay their employees and suppliers, who in turn shop and pay their bills."​

That's an 84% 'return on investment', sounds good to me!

Though I'm sure michaelsuede will come up with some reason why it's actually bad.

 

[Roger Ramjets]

[qimg]http://www.fascistsoup.com/wp-content/uploads/2011/05/foodstamps.png[/qimg]

How to Lie with Statistics: Chapter 5. Truncated Graph!

 

[BeAChooser]

http://news.yahoo.com/s/yblog_thelo...t/employment-rate-for-black-men-at-record-low

May 10

If the election of America's first African-American president was expected to give blacks an economic boost, it hasn't emerged yet. Indeed, the percentage of African-American men with a job has dropped to its lowest level since records began in 1972, according to the government's monthly jobs report released last week.

How's that stimulus working? Hmmmmm?

 

[mhaze]

"The U.S. Department of Agriculture calculates that for every $5 of food-stamp spending, there is $9.20 of total economic activity, as grocers and farmers pay their employees and suppliers, who in turn shop and pay their bills."​

That's an 84% 'return on investment', sounds good to me!

Though I'm sure michaelsuede will come up with some reason why it's actually bad.

I'll save him the trouble.

No, it's not good. A dollar spent in the private sector generates four to five dollars of total economic activity, while on spent by the gov does about 1 1/2.

Basically, it is terrible. And it is not a "return on investment", rather it is a dollar that could have earned 4-5 times, taken from people so that it could earn 1.5 at the hands of the government chosen.

Got it now? A third of what should have and could have been.

 

[Kthulhut Fhtagn]

I'll save him the trouble.

No, it's not good. A dollar spent in the private sector generates four to five dollars of total economic activity, while on spent by the gov does about 1 1/2.

Basically, it is terrible. And it is not a "return on investment", rather it is a dollar that could have earned 4-5 times, taken from people so that it could earn 1.5 at the hands of the government chosen.

Got it now? A third of what should have and could have been.

Given that the private industry is unwilling to perform necessary welfare services like food stamps, I think $9.20 of economic activity for $5.00 is a good deal. Though I should note that your counter-argument is based on the strawman that liberals believe welfare spending can totally replace the private-sector.

 

[BobTheDonkey]

Given that the private industry is unwilling to perform necessary welfare services like food stamps, I think $9.20 of economic activity for $5.00 is a good deal. Though I should note that your counter-argument is based on the strawman that liberals believe welfare spending can totally replace the private-sector.

I wonder if "Gov't Money Spent" includes welfare type monies? That's not what the stimulus was supposed to fund.

In fact, given that public works projects are accomplished, by and large, by private industry via Gov't contracts, I find it hard to believe that the same kind of economic activity is not ultimately generated. It's only by confuscating the issue with added Gov't expenditures with no expected stimulating effect, such as welfare programs, Social Security, and Medicare/caid, that lower the "economic activity per Gov't dollar spent".

In other words, perhaps I am just naive, but I fail to see how a 1,000,000 project financed by the Gov't creates less economic activity than a 1,000,000 project financed by a private business.

 

[BeAChooser]

I fail to see how a 1,000,000 project financed by the Gov't creates less economic activity than a 1,000,000 project financed by a private business.

Well maybe the clue is in answering the question, "who gets the profit"?

 

[mhaze]

I wonder if "Gov't Money Spent" includes welfare type monies? That's not what the stimulus was supposed to fund.

In fact, given that public works projects are accomplished, by and large, by private industry via Gov't contracts, I find it hard to believe that the same kind of economic activity is not ultimately generated. It's only by confuscating the issue with added Gov't expenditures with no expected stimulating effect, such as welfare programs, Social Security, and Medicare/caid, that lower the "economic activity per Gov't dollar spent".

In other words, perhaps I am just naive, but I fail to see how a 1,000,000 project financed by the Gov't creates less economic activity than a 1,000,000 project financed by a private business.

Primarily this stems from the dichotomy between investment and capital decision making in business, and the similar process in government.

It's more common than not that government decides to invest in what business would consider extremely poor risk based on bad ideas and without consideration for return of capital.

For example the some 10,000 house trailers bought by FEMA for New Orleans after Katrina, never delivered, and left to rot at some small Arkansas airport.

Failure is the model, and stupid is the game!

So if you cannot see how project by the Government generate less economic activity than those by private business, my suggestion would be to simply get a government job, and then there would be a great many other things that it would not matter if you "failed to see".

 

[BeAChooser]

http://www.powerlineblog.com/archives/2011/05/029042.php

Economists Timothy Conley and Bill Dupor have studied the effects of the American Recovery and Reinvestment Act (the purported stimulus bill) with great rigor. Earlier this week, they reported their findings in a paper titled "The American Recovery and Reinvestment Act: Public Sector Jobs Saved, Private Sector Jobs Forestalled." [see http://web.econ.ohio-state.edu/dupor/arra10_may11.pdf ] … snip … Here, however, is the bottom line:

Our benchmark results suggest that the ARRA created/saved approximately 450 thousand state and local government jobs and destroyed/forestalled roughly one million private sector jobs. State and local government jobs were saved because ARRA funds were largely used to offset state revenue shortfalls and Medicaid increases rather than boost private sector employment. The majority of destroyed/forestalled jobs were in growth industries including health, education, professional and business services.

So the American people borrowed and spent close to a trillion dollars to destroy a net of more than one-half million jobs.

Anyone Obamaphiles out there still think the Stimulus wasn't a massive FAIL? Hmmmm?

 

[BeAChooser]

Even Harvard professors have confirmed Obama type federal stimulus programs don't work. Remember when Obama promised that 90% of the jobs that were created by the stimulus would be in the private sector? Well here is what the Harvard professors' study found:

http://hbswk.hbs.edu/item/6420.html

Stimulus Surprise: Companies Retrench When Government Spends

Recent research at Harvard Business School began with the premise that as a state's congressional delegation grew in stature and power in Washington, D.C., local businesses would benefit from the increased federal spending sure to come their way.

It turned out quite the opposite. In fact, professors Lauren Cohen, Joshua Coval, and Christopher Malloy discovered to their surprise that companies experienced lower sales and retrenched by cutting payroll, R&D, and other expenses.

The researchers concluded that

Some of the [government] dollars directly supplant private-sector activity—they literally undertake projects the private sector was planning to do on its own. The Tennessee Valley Authority of 1933 is perhaps the most famous example of this.

Other dollars appear to indirectly crowd out private firms by hiring away employees and the like. For instance, our effects are strongest when unemployment is low and capacity utilization is high. But we suspect that a third and potentially quite strong effect is the uncertainty that is created by government involvement.

Q: These findings present something of a dilemma for public policymakers who believe that federal spending can stimulate private economic development. How would you suggest they approach the problem that federal dollars may actually cause private-sector retrenchment?

A: Our findings suggest that they should revisit their belief that federal spending can stimulate private economic development. It is important to note that our research ignores all costs associated with paying for the spending such as higher taxes or increased borrowing. From the perspective of the target state, the funds are essentially free, but clearly at the national level someone has to pay for stimulus spending. And in the absence of a positive private-sector response, it seems even more difficult to justify federal spending than otherwise.

Now, of course, those of us who are not leftist Harvard professors and who actually paid attention to history already knew that, and in fact warned that is exactly what would happen if the democrats insisted on pushing through the failed Stimulus Package. But then democrats never learn and I predict democrats will even ignore this Harvard study even though it comes from a bastion of liberalism. Anyone care to take that bet?

 

[BeAChooser]

http://www.zerohedge.com/article/economy-sliding-stagflationary-spiral

The Economy Is Sliding Into A Stagflationary Spiral

According to most economists the Q1 GDP stumble was a blip, something we shouldn't worry about because the economy is still on track for recovery. They are reacting to the preliminary report that GDP fell to 1.8% in Q1, down from 3.1% in Q4 2010. They are also rather unbothered by increasing prices at the wholesale and consumer level.

Another way to look at it is that the economy is being harmed by monetary inflation and we are seeing massive distortions in the economy as a result of this intentional Fed policy. The economy is responding in predictable ways that will lead to less real growth, price inflation, and more problems. I think this is the correct way of looking at things and Q1 is not a temporary blip on the road to recovery.

… snip …

What is happening is that that economic growth is stalling, and industrial production, manufacturing, non-manufacturing, durable goods production, retail sales, and employment is flattening-to-declining. The reason is monetary inflation, which is an expansion of money supply according to the classic Austrian theory definition. Rising prices are just an effect of monetary inflation along with other negative consequences.

The consequence of money expansion is a negative for the economy, despite what the Keynesians, Monetarists, and Chairman Bernanke say.

Thank you, CarterObama. You're the gift that keeps on giving.

 

[BeAChooser]

Speaking of Carter ….

http://www.rightwire.net/2011/05/shadow-stat-misery-index-highest-on.html?utm_source=feedburner&utm_

John Williams, over at Shadow Stats, compiles economic data for inflation and unemployment the way it used to be calculated pre-1990. Based on that data, the CPI inflation rate is over 10%, and the unemployment rate is over 15% (see charts). The Misery Index is the sum of the current inflation rate and the unemployment rate. If it were to be calculated using the older methods, the Index would now be over 25, a record high. It surpasses the old index high of 21.98, which occurred in June 1980, when Jimmy Carter was president.

 

[BeAChooser]

{crickets}

 

[lomiller]

Since spending from the stimulus package ended a year (or more?) ago and it had pretty much the effect predicted by economic models ahead of time (which shows that it would be helpful but a little too small) what’s left to discuss? These facts are already well established in this thread, are you hoping they will have changed or that if you simply pretend they don't exist the facts will change?

 

[mhaze]

Speaking of Carter ….

http://www.rightwire.net/2011/05/shadow-stat-misery-index-highest-on.html?utm_source=feedburner&utm_

I was studying that last couple days, and I'm not really sure what "Misery Index" means in practice.

Where we are headed here, though, is things look one way with the government numbers interpreted by progressives (or government people), and things look another way with the real numbers.

That's actually typical of countries that get into this kind of problem.

I think this will get worse, not better.

 

[BeAChooser]

http://www.usatoday.com/news/nation/2011-05-19-job-creation-recession_n.htm

The nation has 5% fewer jobs today — a loss of 7 million — than it did when the recession began in December 2007. That is by far the worst performance of job generation following any of the dozen recessions since the 1930s.

I wonder if USAToday's reporters and editors realize this has something to do with Obama and his policies?

Yes, I think they do, but can't help but carry Obama's water.

 

[BeAChooser]

Media Bias anyone?

http://newsbusters.org/blogs/tim-gr...und-stimulus-forestalled-or-destroyed-million

On the front page of Wednesday’s Investor’s Business Daily, reporter David Hogberg reported that a new study found President Obama’s “stimulus” plan “may have destroyed or forestalled employment, including more than 1 million private-sector jobs.”

Destroyed or forestalled? Our media only cites studies which estimate the number of jobs Team Obama “saved or created.” Economists Timothy Conley of the University of Western Ontario and Bill Dupor of Ohio State University showed the “stimulus” saved 443,000 government jobs, but caused a net loss of more than a million jobs. This is one of those studies only Fox News noticed. But on CNN’s American Morning on Thursday, a Time magazine editor was still calling for more “investment” in infrastructure

The mainstream media is as STUCK ON STUPID as Obama.