On July 1, the president’s Council of Economic Advisers released The Economic Impact of the American Recovery and Reinvestment Act of 2009, Seventh Quarterly Report. The report made clear that the only real growth and impact of the president’s stimulus package was on the national debt, and did very little, if anything at all, to create jobs.
The Weekly Standard summarized the report stating, “the ‘stimulus’ has added or saved just under 2.4 million jobs — whether private or public — at a cost (to date) of $666 billion. That’s a cost to taxpayers of $278,000 per job.”
In other words, the Weekly Standard went on to report, “the government could simply have cut a $100,000 check to everyone whose employment was allegedly made possible by the ‘stimulus,’ and taxpayers would have come out $427 billion ahead.”
A reverse stimulus was not part of the plan, but goes to show that government meddling in the economy in no way aids a recovery.
“This proves that over the past few months, the economy would have saved and created more jobs with no government involvement than it has with it,” says Bill Wilson, president of Americans for Limited Government (ALG). “The ‘stimulus’ has done nothing but prevent the U.S. economy from recovering.”
Despite the reported erroneousness of the “stimulus” act and despite the fact that under the law spending was set to end in June, that end has yet to be seen.
On June 15, the U.S. Department of Labor set aside $800 million for the state of California from the “stimulus” package so it could continue to pay out unemployment insurance. The state boasts an unemployment rate of 11.7 percent, higher than the national average, and apparently cannot afford to continue to pay unemployment insurance for all those without jobs.
But how can unemployment still be a problem when Former House Speaker Nancy Pelosi claimed that unemployment insurance creates jobs faster than any other program? In July of 2010, Pelosi is quoted as saying, “Let me say that unemployment insurance… is one of the biggest stimuluses (sic) to our economy. Economists will tell you, this money is spent quickly. It injects demand into the economy, and it’s job creating. It creates jobs faster than almost any other initiative you can name.”
Would she say that same thing today? After all, Obama’s promise made in 2009, that if Congress passed the “stimulus” package unemployment would not rise above 8 percent, has yet to be fulfilled. In fact, it has been 28 straight months now that the unemployment rate has been at or above 8 percent. Paying all those unemployment benefits took a lot of taxpayer money and did nothing to help the economy — short term or long term.
Instead, what resulted from Obama’s highly touted “stimulus” plan are high unemployment, bankrupt states and about one million destroyed private-sector jobs. Of course America gained 450,000 government jobs and $1.65 trillion in debt in this past year alone out of the deal.
But that’s what happens when the government pumps money into a system — picking winners and losers.
“Obama has prolonged the recession he swore to pull us out of,” says ALG’s Wilson. “Obama has been given everything he wanted — everything he said would turn the economy around. The ‘stimulus’ has failed. Now is the time for a new direction for America, before we go bankrupt trying to ‘stimulate’ it.”
Rebekah Rast is a contributing editor at Americans for Limited Government (ALG). You can follow her on Twitter at @RebekahRast.