Not really in the mood for gift giving huh? Yea, us neither. Any thoughts of a stimulus’ birthday party pretty much went right out the window when we saw the Congressional Budget Office’s latest unemployment report.
In a bit of deserved irony, the CBO issued a report highlighting America’s jobs problem on the anniversary of the American Recovery and Reinvestment Act, better known as Obama’s stimulus bill. According to the report,
“The rate of unemployment in the United States has exceeded 8 percent since February 2009, making the past three years the longest stretch of high unemployment in this country since the Great Depression.”
But that figure doesn’t fully account for just how bad things are. The CBO found that if you count people who would like to work but have just given up the search and those who are stuck in a part time job then the unemployment rate is really 15 percent!
Unfortunately, the CBO isn’t exactly predicting things are going to get better anytime soon. Indeed, they project that official unemployment will remain above 8 percent until 2014, a full two years from now.
Which brings us back to the stimulus bill.
It was sold to the American people in the strongest terms. President Obama called it a “plan that will save or create up to 4 million jobs over the next two years.” Vice President Biden said that in “18 months” the stimulus would “create 3.5 million jobs . . . literally drop-kicks us out of this recession.” And a report by Christina Romer said that it would “more than meet the goal of creating or savings 3 million jobs by 2010,” and keep unemployment below 7 percent.
Not seven months later, Biden was back doing his best used-car salesman pitch. Despite the bill being an unabashed flop he still said, “In my wildest dreams, I never thought it would work this well.”
Those must be some pretty bad dreams.
From the get-go it was pretty clear that our $787 billion wasn’t being spent very well. Dozens of reports came out highlighting some utterly ridiculous projects that were being funded with our tax dollars. Projects like a $2 million grant to fund a Nevada tourist railroad that dead-ends in Mound House, a town most famous for its legal brothels including the Kit Kat Guest Ranch and the Moonlight Bunny Ranch. And $489,000 to renovate a million dollar yacht own by the city of Los Angeles and used for “public relations tours of the harbor.”
This is our tax dollars at work, or as is more accurate, not at work.
The bill’s authors came to find out (thought it still will not admit it) that the stimulus rested on conflicting goals. They wanted it spent fast so they could reap the maximal political reward, but the best investments aren’t made quickly. They take time to find, research, and oversee, which is why the government is particularly bad at this sort of investment in the first place.
As Obama’s hometown paper, the Chicago Tribune wrote, “Public investment . . . must be based on due diligence. Not big money politics. Not stimulus timetables. Not sun-struck ideology. . . A nickel’s worth of common sense and a dime’s worth of caution might have saved Uncle Sam millions.”
Perhaps the most troubling thing is that President Obama’s top economic advisers were aware of these exact problems. “It is not possible to spend out much more than $225 billion in the next two years with high-priority investments and protections for the most vulnerable,” Obama’s team wrote. “There is tension between the need to spend the money quickly and the desire to spend money wisely.”
Despite these concerns they tried it anyway. And America is $787 billion poorer because of it.
So Happy Birthday stimulus. Forgive us for not buying you a present. Quite frankly, we can’t afford one anymore.