Stimulus didn’t fail, it was just misunderstood. Yeah… that’s it.
Fail –verb (used without object)
to fall short of success or achievement in something expected, attempted, desired, or approved:
Before you do anything else, you really should read the full transcript (transcript at cnn.com) of the President’s speech from Denver on February 17, 2009; the day he signed the Stimulus, or as he called it, the American Recovery and Reinvestment Act. Only after reading the President’s speech or listening to it or watching it here on youtube, or any of the locations here from a listing of Google search results, can we have a common starting point on this subject. The links above (in most cases) should open in a new tab or browser window so you can return here easily after the refresher.
I hope you took the time to read the transcript or watch the videos. At around 0:52 in the first video I linked to, the President says that this bill “will create or save 31/2 million jobs”. And less than a hundred words later, he says that 400,000 Americans would be put to work on what were supposed to be massive infrastructure improvements and enhancements.
Now, I’m not not certain if that 400,000 were part of the original 3.5 million number, or in addition to, but, to give the President the benefit of the doubt, we’ll assume that they were in addition to. And, because it’s an easier number for my old head to work with, we’ll take that 3.5 million plus the 4k – 3.9 million total, and round that number up to 4 million.
If I remember my high school math correctly, 4,000,000 out of 150,000,000 (approximate number of workers in the country in 2009) equates to a job for roughly 2.5 or 2.6 percent of the eligible work force. Were the bill just about jobs, the failure aspect would be non-debatable. Only 4M jobs at a total cost of nearly $800,000,000,000 ($800T) would amount to each job costing about $200,000,000 to create.
It should also be obvious from the above numbers, that the $800T price tag of the stimulus bill is way out of line for creating anything shy of hundreds of millions of jobs: Reverse the numbers — 200,000,000 jobs would have cost $4,000,000 a piece.
The President, had big (gargantuan might be another word) plans when he signed the American Recovery and Reinvestment Act into law, and the majority of his speech on that day in February in Denver is not about jobs. The President dedicated only 4 paragraphs of his speech to the topic. One paragraph per millions of jobs potentially saved or created, I guess.
The bulk of this tremendous redistribution of taxpayer money was slated for things like extended unemployment and health care benefits and underwriting new entitlements (cnn transcript, P2, last para – P3, para 2); things like teachers’ salaries (14,000 in New York City alone – P2, para 5); things like seed money for the President’s personal favorite topic (other than teachers’ salaries): green energy companies (P3, para 3).
So, now we have a framework, a basis of what was in the speech. Let’s focus, for the moment on one of the first things the President said:
What makes this recovery plan so important is not just that it will create or save 3½ million jobs over the next two years…
It’s been two years. Unemployment is higher today than it was two years ago, based on the government’s own numbers. There have not been the 3 or 4 million jobs created that the President said would happen. Not might, not could, but would.
According to the Bureau of Labor Statistics, unemployment stood at 8.1% in February of ’09. In April of 2011, the rate was 9.0%; for the entire year, 2010, unemployment was pegged by that same Bureau at 9.6%! (See the sidebar on the Bureau’s website under Annual Averages).
The stimulus failed to deliver on more than just jobs. The country is $3,000,000,000,000 ($3T) deeper in debt than we were in February of 2009. That’s the wrong direction.
Suppose that you are interviewing me for a job… a marketing position with your company. During the course of the interview, I assure you that I can increase your net sales by 10% in one year. Did I succeed if I only hit 6% in that year? What if I hit 10%, but it takes me 16 months? Did I succeed in that instance? Any honest, objective assessment would have to conclude that no, I did not succeed in either instance. That means I failed, and only semantic contortions and linguistic gymnastics can change that fact.
The stimulus was a failure. Read more in Part II.
So, where did all that money go? We’ll discuss that in an upcoming column.
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