Free Markets, Free People
By George The Stimulus Worked! We Say So!
Don’t you just love non-falsifiable government claims?
The Obama administration, in its latest progress report on the $787 billion stimulus program, said both the overall economy and employment continued to be in better shape at the end of 2009 than they would have been without the government’s help.
Better shape, hmmm? Wasn’t this the same stimulus which promised it would keep unemployment below 8% if passed? Yet here we are at 10% with no real relief in sight. Wasn’t this the stimulus which was promised to create or save millions of jobs? Even the administration has finally given up making such claims, instead quietly changing the way it makes such determinations and including pay raises and anything even remotely job related on which the money was spent. So when further claims, such as this, are made, they should be taken with a large and skeptical grain of salt:
Though unemployment reached 10 percent at year’s end—two percentage points higher than the peak that the council forecast when the administration proposed the stimulus package to Congress nearly a year ago—the number of jobs was between 1.5 million to 2 million greater in the fourth quarter than it would have been without the recovery plan, the council said.
This is the same council that made the 8% claim and changed the rules for counting “saved and created” jobs. If anything, their claims should be completely disregarded.
This is the stimulus which was claimed to be so necessary to the recovery, yet of the $787 billion signed into law, only $263 billion has been spent. How is that a stimulus? The theory is the government pumps money into the economy as quickly as possible to “stimulate” growth and hiring. Yet this particular bill is structured so that less than half the funds are spent within what most would consider the critical first year? That alone tells you two things about this particular bill:
It had little to do with stimulus and a lot to do with pork. In fact, it appears to be a 100% pork bill despite the President’s claims to the contrary. Just because individual earmarks weren’t in the bill doesn’t mean this bill isn’t a compilation of wasteful spending and pet projects. They were simply written up differently than they normally are. There was never any intention of spending this money to jump start the economy as witnessed by the amount spent in the first year and its lack of effect. It can be credibly claimed, in contravention of the administration’s claim, that it hasn’t done anything to stimulate economic growth. Don’t get me wrong, I’m not in favor of the spending that has been done or its continuation, but any objective analysis would make the point that $263 billion in a contracting 14 trillion dollar economy is likely to have little effect if any at all. So far the numbers seem to verify that.
Any claims made about the bill’s effect should be viewed very skeptically. In reality, this bill was a spending bill, not a stimulus bill. It was the bill which allowed Democratic legislators (and a good number of Republicans) to spend money on things they’d been unable to get through the body in the past. Again, its structure and the items upon which the money were spent make the argument pretty handily. Its failure to “stimulate” as advertised is precisely why there is talk of a second stimulus. There never was a first.
Whatever recovery has gone on in the economy has been largely a result of factors other than this bill. That includes the positive 3rd quarter GDP numbers they try to trot out as “proof” of the stimulus’s efficacy. Those numbers were driven by the cash for clunkers program, a program outside the stimulus bill, and were largely illusory. They were illusory because it was “growth” driven strictly by government spending, it was temporary growth because it was simply stealing from future sales, and when all the dust settled, that was quite apparent to those who analyzed the results.
What this present claim is all about is message preparation. These claims, which really don’t stand up to scrutiny at all, are being made now for a reason. The president has a State of the Union address coming up soon and needs some “good news” very badly. That’s why these non-falsifiable claims are being tossed out there now. Establishing these claims and repeating them often enough is done in the hope of having them become “conventional wisdom” by the time the SOTU address rolls around. Then when the President makes these claims, an uncritical press will parrot them, establishing them as “fact” for the administration and a part of the narrative that will be repeated in 2012.
That is how the game is played, folks.