Free Markets, Free People

“Recovery Act” A Bust, But Not Because Economic Distress “Misread”

The vaunted stimulus which President Obama claims is doing exactly what it was supposed to do is seen by a majority of others as a complete bust.

Why? Mort Zuckerman lays some of it out:

About 40% of U.S. workers believe the recession will continue for another full year, and their pessimism is justified. As paychecks shrink and disappear, consumers are more hesitant to spend and won’t lead the economy out of the doldrums quickly enough.

It may have made him unpopular in parts of the Obama administration, but Vice President Joe Biden was right when he said a week ago that the administration misread how bad the economy was and how effective the stimulus would be. It was supposed to be about jobs but it wasn’t. The Recovery Act was a single piece of legislation but it included thousands of funding schemes for tens of thousands of projects, and those programs are stuck in the bureaucracy as the government releases the funds with typical inefficiency.

As I and many others pointed out when it was being passed, the stimulus package was nothing more than a collection of porky earmarks on an unprecedented level. It was a lefty wet-dream come true – full access to the treasury and the power to do whatever they wanted. Democrats finally had the power to reward themselves and their constituencies and they took full advantage of it.

This wasn’t a “misreading” of the economy as Joe Biden likes to claim, but a misappropriation of funds to fulfill political dreams and promises that had been denied them for years.

Zuckerman wants to wave off the problems with execution to the “typical inefficiency” of government (but I bet he’s all for the government expanding its role in health care), but this recovery act isn’t just about government inefficiency or bureaucracy. It’s about where the Recovery Act’s money is aimed – and it isn’t aimed at creating jobs.

That’s why, despite the dire claim that if the Recovery Act wasn’t passed, unemployment would rise above 8%, unemployment continued to rise, unabated, to 9.5%. And it will climb higher. It was never targeted at creating (or even saving) jobs. Nor was it targeted toward stimulating the economy (by getting money out in the economy and circulating).

It was a 787 billion dollar payoff/payback pork bill – something both Obama and the Democrats denied but which was obvious to anyone who took the time to look into the provisions of the bill itself.

And now we’re supposed to believe that the economy was worse than they thought and they simply “misread” it.

Nonsense.

For those of you paying attention, this is all a prelude to claiming a second “stimulus” is necessary, after having misappropriated almost a trillion of your dollars previously to pay off their political debt.

The answer, of course, is “no”.

They’ve already proven they can’t be trusted to address the problem at hand without succumbing to the lure of political payoffs. And, in fact, they gave those political payoffs higher priority than the economic distress we are suffering. They should not be given the opportunity to misappropriate anymore of your money to repeat the process.

Because they will.

~McQ

24 Responses to “Recovery Act” A Bust, But Not Because Economic Distress “Misread”

  • I am yet to settle on whether Barack Obama is fundamentally stupid, or maniacally evil I can not accept that person with any understanding of economics, could beieve that a massive tax and spend program could somehow revive the economy. Joe Biden migbt believe it, but Biden is an idiot.

    My most favorable to Obama interpertation is the the one thought that as recessions tend to play out in about a year, the the economy would turn around on his own, and this so-called stimulus package would do no harm.

    In any case, Obama is a man you uses words the meaning he does not understand or simply do reflect his true intent.

    • I think Obama and his economic team thought that this was merely a “crisis of confidence” so the economy would resume as soon as the feeling of “panic” was abated, so targeting the “stimulus” just was that important.  As a matter of fact, I think you could have sold that idea up until GM went into bankruptcy.  At that point, the banks had been tested and GM and Chrysler were “dealt with” so the feeling of crisis had abated, but it set the stage for the current situation.
      Once there was a feeling that the worst of the crisis was over, the Obama agenda was left there, naked for all to see.
      As the weeks have progessed, the underlying future consequences of the current “cap and trade” (somehow called an energy bill) and Obamacare bills started to suck the oxygen out of the normal recovery process.
      The “big lie” was calling it a “Recovery Act” ..  it was merely another spending bill, hardly targeted to stimulate the engines of the American economy, but rather the engines of the political agenda.
      Obama lied, the economy died.
       

  • I thought the new and improved Narrative was that the evil Republicans forced them to include too many tax cuts, thereby rendering the stimulus ineffective.  LUN

  • I agree with both Neo and DavidL, Obama and company tried to play the odds that the economy would rebound on its own, as they all have done in the past, and Obama would be in a position to reap the rewards of having “SAVED” the US from the depression Bush had created. For once, Biden had it right. They miscalculated. Instead of saving the economy, they actually increased the malaise and now they believe a second stimulus is needed. Why? Because if the first one was needed but “fell short” then a second one is even more emphatically required. For them to determine anything else would be for them to admit they screwed the pooch the first time.

  • I’m not entirely sure whether they really cared if the economy rebounded, aside from the political implications.  They had some money to spend and some pet projects to force through, and they weren’t about to be slowed by a poor economy or consumer confidence.  The sudden change in direction (‘the stimulus wasn’t about jobs’) shows that they’ll market it in the most convenient way possible at any given moment.  The important thing is to keep things together long enough to get Cap and Trade and nationalize health care passed, and then deal with the fallout as best they can.

  • Though many voted for him, voters turned out to be a little less economically ignorant than the maladministration planned.  Enough people who make an economic difference may actually understand that the government can’t continue to give away free lunches to others without liberating the bread and cold cuts for the sandwiches from their fridge first.
    Whether they sort of understood all along, or whether it was forced upon them by reality, it’s beginning to sink in, and people are beginning to take in the grim outlook that is Cap & Tax and National Health and trillion dollar deficits.
    But the glamor hasn’t lifted from their eyes completely yet, many of the fools still ‘like’ him.  Unwilling to admit they’ve been taken by the used car salesman of the millennium they still want to believe in the guy and his promises of hope and change.    And the media is still telling them what a great deal they got and how tomorrow, or maybe the day after, that hope and change will come, but meanwhile doesn’t Michelle look swell in her dress!
    And the Republicans continue to offer no other viable alternatives.

    • looker, I think simply standing there instead of just doing something is a better alternative.
      Yours, TDP, ml, msl, & pfpp

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  • For those of you paying attention, this is all a prelude to claiming a second “stimulus” is necessary

    ***

    Which will be prelude to getting their heads handed to them in the mid-terms…

  • And Obama says unemployment will rise for several more months

    Looks like he finally took his reality pill.

    • This will permit the self propelled Can of Spam to tell us that he warned us about it all in a few months when it wanders closer to the record set during the Great Depression.
      It won’t be his fault though, first because, nothing is his fault, second because he warned us (what!??  was he supposed to DO something?) and finally, after all, it’s George Bush’s fault.

  • There is a fundamental flaw in the logic of government spending as a means of wealth creation. The flaw is this: it takes the government $1.00 to procure the same goods and services that can be procurred in the private sector for only $0.75. So, with every dollar extracted from the taxpayer for government spending, $0.25 of purchasing power is lost. Forever.

    Multiplied billions and billions of times over, this lost value represents hundreds of thousands of jobs that will never come into existence because of this massive government spending.

    The “Stimulus Plan” will destroy both wealth and jobs. No other outcome is even possible. I think Americans understand this innately. Thus, they are holding back — not spending, not investing, not hiring.

    —Tom Nally, New Orleans

    • Aside from that, even if government was 100% efficient and for $1.00 spent they produced $1.00 of services, it would still not be a wealth creator. The government is a consumer, not a producer and has no money of its own. It can only be funded through taxation, borrowing, or printing money. None of those are actually creating wealth (printing money eventually just reduces the value of that which already exists), and any so-called “stimulus” (other than maybe reducing taxation) is essentially nothing more than a fancy term for redistribution.

  • Somewhere, on some blog (maybe this one, but I think not) during the thick of last year’s campaign, an Obama supporter asked the question … <b>won’t you concede that the election is about who gets to split up the spoils ?</b>
    The (most benign) alternate interpretation of why the “stimulus” was so badly targeted is that those who put it together always thought that the previous “stimulus”-s were purely a “spoils distribution” and they decided that it would be different this time.
    While this interpretation is not necessarily based on ill-will on the part of the participants, it is scary none-the-less.
    By the way, I don’t believe elections are the basis of who gets to split up the “spoils” and I responded that way.

  • Oh look – an honest statement from the guys who were going to fix it all if we just gave them the money and the authority.
    Some of the auto related jobs AREN’T coming back after all!   Who knew?
     

    “They are casualties of a changing economy. And that only underscores the importance of generating new businesses and industries to replace the ones we’ve lost, and of preparing our workers to fill the jobs they create,” Obama says in the remarks.

    Gee! and I guess until these new jobs are created and the workers are educated the unemployed auto workers who looked to their ‘savior’ can?
    Do what?
    Oh, what was I thinking…collect community college money and get their mortgages paid from Obama’s new plans maybe?
    I wonder if they’ll still be happy members of the UAW after this.
    I wonder if these new industries will pay as well as the old one did.
    I wonder what our national response will be to workers who just can’t seem to get being an auto worker out of their heads and long for the old days and the old ways and wait for the UAW to save them.
    I wonder if these new industries will be forced to locate in the towns where all these unemployed auto workers will be eagerly awaiting the return of their cheese(see the book “Who moved my cheese”).
    Hope and Change….not necessarily in that order.
     

  • I drove through part of Pennsylvania this past weekend and a bridge being repaired/replaced (not sure which) near Rt. 34 had a sign up crediting the so-called Recovery Act for funding the construction.  Big sign too.  Hard to miss.  Guess this was part of the 10% I hear was all this act had in it for infrastructure…

  • funding the construction of the bridge or the sign?

  • Funny, China is just starting to see wages, costs, and currency changes that might have made some traditional industry viable in the US again.
    Too bad we let lawyers run the world.

  • “Not many people realize they got a tax cut,” Oberstar said. “I have not received a single e-mail, phone call, snail mail, personal comment from anybody since we enacted this bill, since the end of February, saying, ‘I got my tax’ or ‘Thanks for the tax cut’ or ‘I hardly noticed it’ or anything.

    Now we’re supposed to thank them for letting us keep our own money.

    • Can’t have a give away without giving something away &  you can’t buy votes without cash!
      Tax the rich!

  • Chuckle…Tom…in this case..you’re right.  It’s Global Warming all over again.