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$1 million per job

The $787 billion stimulus package Democrats forced on us in February has been a failure and, based on recent news of fraud, borders on disaster.

            For most Americans, it’s hard to notice that the government took $787 billion to “stimulate” the economy at the beginning of the year. It’s hard to see the “stimulation” going on when the unemployment rate has now risen to 9.5 percent. Some would argue that we need to give the stimulus package time, but that’s not a good argument. We were told in February by National Economic Director Larry Summers that, “You’ll see the effects begin almost immediately.” Nine months later, the only effects I’m seeing are rising debt and unemployment.

            It raises the question: Where would our country be, had our government not gone on a spending spree? Well, how about we go by what Barack Obama told us would happen.

            When the Obama administration was trying to gather support for its stimulus package back in January, there was a report published by members of the administration entitled, “The Job Impact of the American Recovery and Reinvestment Plan.” The report was intended to show whether or not a stimulus package would be necessary in order to solve the country’s economic problems. It included data that indicated what the administration believed the unemployment rate would be if no stimulus package was created, and what would happen if the proposed stimulus was passed.

            The report concluded that without a stimulus package the United States would see its unemployment raise to 8.5 percent in 2009 and would peak at 9 percent during 2010. But it also concluded that if the stimulus was passed the unemployment rate would peak at no more then 8 percent in 2009. This information was one of the primary reasons Democrats were insistent on rushing the stimulus at the beginning of the year. They told us the stimulus needed to be passed immediately in order to avoid the dreadful projections from the report. President Obama said that the stimulus would, “go directly to… generating three to four million new jobs.” It was either stimulus or nothing. That’s what our government argued on Capitol Hill. Imagine an unemployment rate of 8.5 percent. Democrats weren’t about to do nothing.

            Now, here we are in November and the unemployment rate is 9.5 percent. That is 0.5 percent higher than the Obama administration projected unemployment would peak at if the government did nothing. I think we would have been better off using market-based solutions to help the economy recover rather then spend $787 billion we don’t have.        

One argument Democrats are now giving in defense of their stimulus is that no one knew how bad this recession was. Really? Wasn’t it Obama and his supporters who were telling us all through the campaign that this was the worst economic crisis since the Great Depression? It sounds like they thought this was the biggest disaster of all time and now they are trying to tell us they didn’t think it would be this bad. Who are these guys fooling?

            Don’t forget the jobs saved argument either. Obama told us that we’d save three to four million jobs. Well, according to the infamous Recovery.gov website, which is intended to allow Americans to track the money spent in the stimulus package, all that money has only created/saved 640,329 jobs thus far. For those who like numbers, that translates to $1,229,055.69 per job created or saved. How efficient.

Unfortunately, though, as it turns out, the true number of jobs created or saved is not actually 640,329. As has been reported by many local newspapers that have been investigating the stimulus being put into action, the number of jobs that have been reported saved/created by Recovery.gov is significantly off. According to those papers, approximately 75,000 jobs included in that 640,329 total haven’t really been created or saved. Whn asked about this, Obama said that this bogus job creation was a “side issue.”

            A side issue? I thought transparency was one of the focal points of Obama’s campaign last fall. Now we find that all this alleged transparency involved with the stimulus is anything but and it’s now a side issue?  This constant hypocrisy is growing tiresome.

            The stimulus package, like most other government programs, is failing to accomplish any of its goals. The jobs the administration said were going to be saved haven’t been saved and unemployment has risen to a level beyond what we were told was tolerable in February. Often times, we were told by Democrats that, “we can’t do nothing.” But since doing nothing was never an option put on the table by anyone, I think it could have been a good one. Looking back now, I would rather we had done nothing, saved $787 billion and had unemployment peak at 9 percent than be in the mess we find ourselves now. The fictional “party of no” seems like it would be the smartest party on Capitol Hill at this point.

            Alex Perry is a Collegian columnist. He can be reached at amperry@student.umass.edu.

Comments
11 Responses to “$1 million per job”
  1. Ed says:

    Unemployment is higher now than it has been since the Nixon Administration — the 10.2% figure (and it is that high) represents only those currently collecting unemployment insurance and does NOT include those who (a) are working part-time, (b) are in a job below their ability level, and (c) aren’t eligible for benefits in the first place such as recent college graduates and others entering the workforce.

    These people used to be counted in the unemployment rate – but Obama stopped counting them, hence the lower figure.

  2. Chris T. says:

    Want to source any of those figures, Ed?

    Maybe we’d have $700 billion if some previous president didn’t bury about as much in the desert along with 4,000 Americans and about as many Iraqis as in the quoted saved/created jobs figure. Presidencies don’t exist in a vacuum like the one in your skull, Alex. Each one cleans up in some way after the last, be they Democrat or Republican.

  3. Alex Perry says:

    Chris T.,

    your comment is everything thats wrong with democrats nowadays. Rather then talk about the issues all you guys talk about is george bush this and george bush that. George Bush isnt the reason the stimulus was passed. George Bush isnt the reason we are facing record deficits.

    You want to talk about cleaning up before the last? One of the main reasons 9/11 occurred was because of Clinton’s disregard for the threat of terrorism in office. In addition to that, one of the main reasons for the housing collapse was because of Clinton. Check out some snips of this column from 1999 that pretty much predicts a government bailout 10 years ahead of time:

    http://www.nytimes.com/1999/09/30/business/fannie-mae-eases-credit-to-aid-mortgage-lending.html

    i encourage you to read the whole thing, its brief, but here are some pieces:

    –snip–
    Fannie Mae, the nation’s biggest underwriter of home mortgages, has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people and felt pressure from stock holders to maintain its phenomenal growth in profits.

    –snip–
    In moving, even tentatively, into this new area of lending, Fannie Mae is taking on significantly more risk, which may not pose any difficulties during flush economic times. But the government-subsidized corporation may run into trouble in an economic downturn, prompting a government rescue similar to that of the savings and loan industry in the 1980’s.

    ”From the perspective of many people, including me, this is another thrift industry growing up around us,” said Peter Wallison a resident fellow at the American Enterprise Institute. ”If they fail, the government will have to step up and bail them out the way it stepped up and bailed out the thrift industry.”

    They saw this stuff coming 10 years in advance and the Clinton administration acted on it to appeal to its base anyhow.

    stop blaming george bush for all of the problems in this country and acknowledge the real problems that are being regularly created by out of control liberals.

    that’s what my column is about, a potentially wasted 787$ billion. Not george bush.

  4. Chris T. says:

    Goodness Alex how is do you manage to go from zero to hysterical in the space of a byline? I’ve read more convincing satire and it was in the Collegian, too. I like the way you completely glossed over “Each one cleans up in some way after the last, be they Democrat or Republican,” to attack me as an evil, partisan Democrat.

    You clearly have literacy issues because you missed the end of your own quote: “[Fannie Mae] felt pressure from stock holders to maintain its phenomenal growth in profits.” The stock holders demanding high growth? To me it sounds like the free market demanding what is expedient over what is economically sustainable.

    The article was published on September 30th, or about 16 months before the end of the Clinton administration. Clinton certainly did make a mistake encouraging such behavior. But if everyone could see the crisis coming why couldn’t Bush do something about it between 2001 and 2007? Nope, clearly all responsibility lies in Clinton’s lame duck swansong period of his presidency and none at all in Bush’s full plus another half term.

    You will probably ignore this because you are dishonest at heart and a testament to the Collegian’s lax fact checking policy, if there even is one.

    I’m still waiting for your sources, Ed.

  5. Alex Perry says:

    there is no fact checking that needs to be done. I said clinton started the policies that led to the housing collapse and he clearly did. the article predicts that the policies clinton wanted would lead to the need for a bailout during an economic downturn and that is exactly what occurred.

    all firms feel pressure from stockholders but that doesnt mean they take unnecessary risks. fannie mae didnt want to start dishing out loans to people that they knew wouldn’t pay them back. that is why clinton was putting pressure on them to do it in the first place, they werent doing it on their own nor is there any evidence that they would have without that pressure.

    why didnt bush do anything about it? probably because of politics. when something like this is done it is hard to reverse without good reason. you cant take loans away from millions of people because you think something will happen in the future. speculation alone is not considered a good reason for politicians to take loans away from that many people because if they do it would certainly hurt them with that group in the polls. i said the same thing with the health care bill in a past column, once something with this big of an impact is done it is done. it cannot be repealed due to political ramifications.

    and did i ever say clinton is responsible for everything? no. im simply pointing out we can play the game of who is responsible for what all day. you started by saying Obama did the stimulus only cuz of Bush. I disagree completely but whatever.

    im not “dishonest at heart” because i have an opinion different from your own.

  6. Ben Rudnick says:

    BTW – Chris T. – You ask why Bush did nothing about Fannie Mae between 2001 and 2007? Here are a couple of excerpts from Wikipedia. I normally would not resort to simply pasting stuff from Wikipedia without verifying it first, but since they are pretty dependably biased towards liberals, I assume they would have scrubbed this material if it were not 100% verifiably true. In addition, it is Thanksgiving, and I don’t have time to go track down every source for this information. Besides, you accused the Bush Administration of doing nothing, and here is proof that they tried to, and were thwarted by the Democrats, so the “fact ball” is now in your court.

    The point is that the Bush Administration, as well as some Republicans in Congress, sounded repeated warnings about the risks Fannie Mae and Freddie Mac were running, and it was ultimately liberals in Congress, like our own Barney Frank, who blocked any action before it was too late to prevent the crash.

    On September 11, 2003, the Bush Administration recommended the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis. Under the plan, a new agency would be created within the Treasury Department to assume supervision of Fannie Mae. The new agency would have the authority, which now rests with Congress, to set capital-reserve requirements for the company and to determine whether the company is adequately managing the risks of its portfolios. The New York Times reported that the plan is an acknowledgment by the administration that oversight of Fannie Mae and Freddie Mac is broken. The Times also reported Democratic opposition to Bush’s plan: “These two entities — Fannie Mae and Freddie Mac — are not facing any kind of financial crisis,” said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. “The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.” [16]

    AND
    On January 26, 2005, the Federal Housing Enterprise Regulatory Reform Act of 2005 (S.190) was first introduced in the Senate by Sen. Chuck Hagel.[17] The Senate legislation was an effort to reform the existing GSE regulatory structure in light of the recent accounting problems and questionable management actions leading to considerable income restatements by the GSE’s. After being reported favorably by the Senate’s Committee on Banking, Housing, and Urban Affairs in July 2005, the bill was never considered by the full Senate for a vote.[18] Sen. John McCain’s decision to become a cosponsor of S.190 almost a year later in 2006 was the last action taken regarding Sen. Hagel’s bill in spite of developments since clearing the Senate Committee. Sen. McCain pointed out that Fannie Mae’s regulator reported that profits were “illusions deliberately and systematically created by the company’s senior management” in his floor statement giving support to S.190. [19][20]

    And here is video from 2004 with Republicans generally questioning the practices of Fannie Mae and Freddie Mac, and Democrats generally dismissing those concerns, including our illustrious Rep. Barney Frank.
    http://www.youtube.com/watch?v=_MGT_cSi7Rs

    Happy Thanksgiving!
    Ben Rudnick
    Collegian Columnist

  7. Alex Perry says:

    Yeah i have wrote in the past about how corrupt Barney Frank is. Fact is though Republicans had majorities in Bush’s first term and we didnt get things fixed although we couldve. Yes we complained but we didnt push for it like we couldve/shouldve. like i said in the last post, that was probably due to political reasons. Whether it was because we thought it would be a bad idea to stop giving loans to people with lower incomes or if it was because the politicians in the position to change things were corrupted… its hard to say.

    either way it doesnt change the fact that it was clinton’s policies that started this non sense.

    good commentary Ben. i had a brain lapse when i wrote my first response. How could i have forgotten about the exploits of Barney?

  8. Ed says:

    Might I suggest that Chris T go look at what the statistics (of which he seems to know so much about) actually mean – AND ARE DEFINED AS MEANING – before he critiques my essentially reciting said definitions?

    See, for example, http://www.bls.gov/news.release/empsit.t12.htm which is the Bureau of Labor Statistics (.bls) of the US Govt (.gov).
    Please take note of the definitions of the “measures” – the U-1, U-2, U-3, U-4, U-5, & U-6. And what I said was (and it is verified here) that the Govt is using the lower U-3 rate instead of the higher U-6 rate, like was done in the past (why the U-6 rate was calculated).

    It is like saying that Liquors 44 sells distilled spirits as well as beer, and hence you need to calculate the sale of distilled spirits in the volume of alcohol they sell, not just how much beer they sell. This is called “common sense” and no, there aren’t citations on things that any reasonably intelligent fool ought to know on his own.

    Here is a BLS handout on the various rates
    http://www.bls.gov/opub/ils/pdf/opbils67.pdf

    Here is the Wall Street Journal discussing U-6 at 17.5%
    http://blogs.wsj.com/economics/2009/11/06/broader-unemployment-rate-hits-175/

    Here is the Wall Street Journal discussing U-6 in general last winter: http://blogs.wsj.com/economics/2009/02/06/the-other-unemployment-rate-139/

    Now one other thing – while U-3 is an actual statistic based on those applying for govt benefits, U-6 is a statistical calculation. It is based on a healthy economy and we have anything but that right now (even NoBama agrees) and hence there likely is statistical variance with the actual U-6 rate higher than it is calculated to be. (Anyone know anyone graduating this year who ISN’T worried about finding a job?)

    So I rounded 17.5% to 20%. QED, Ed isn’t just making stuff up.

    He isn’t a left-leaning Democrat. (Nor a Republican, either…)

  9. Ed says:

    Ben & Alex — you also gotta remember Chris Dodds. He is no angel in this one, and there are issues, I believe, involving him (and others) getting sorta sweetheart deals relative to their own mortgages.

    In fairness, GW Bush also is partially responsible. In 2002-2003 he increased the Section 8 program by 25% (13% and 12% over two fiscal years), largely by increasing the payments that would be made to landlords. In Amherst, for example, base payments of 120% of calculated “fair market value” are permitted with in some cases even more money going to the landlord.

    What this did, in a place like Amherst where no new construction was permitted, was to create a speculative bubble in rental housing. For example, Rolling Green was sold three times in the early years of this decade.

    And speculation is the presumption that you will be selling this to someone else next year for more – and when that ended, the problems arose…

    But it is Chris Dodds and Barney Frank, and even Saturday Night Live was going after them which tells you how involved they are.

    And as to Chris Dodds, google “waitress sandwich.” Yep, he was the other end of Ted Kennedy’s drunken attacks on young ladies, things which if anyone else but two drunken Democrat US Senators did them would be called “sexual assaults.”

  10. Chris T. says:

    Mr. Rudnick:

    Your sources are quotes from Wikipedia you couldn’t be bothered to link to and a heavily edited video pieced together by someone with an obvious axe to grind? Do you accuse your professors of having a “liberal bias” when they fail you for citing papers in similar ways?

    According to the author of your video source, Mr. Rudnick, Obama is also going to redistribute white wealth to blacks:

    http://www.youtube.com/watch?v=s05tzJwzsaU

    But then I noticed that you’re a Collegian columnist, too, so it all makes sense to me now. Apparently Collegian columnists aren’t held to even freshmen standards of citation.

    Mr. Perry:

    I had given up on you but then you said this:

    “Fact is though Republicans had majorities in Bush’s first term and we didnt get things fixed although we couldve. Yes we complained but we didnt push for it like we couldve/shouldve.”

    It’s really refreshing that you can even consider that maybe the Republicans didn’t do enough for once. But as you said, “either way it doesn’t change the fact that” your column was the work of a partisan hack. Next time, try looking up what BOTH parties did in the legislator before pointing fingers.

  11. Ben Rudnick says:

    I find it interesting that Chris T. doesn’t bother to refute the facts. It does not matter where the information comes from if it is correct, so are you saying that Barney Frank did NOT protect Fannie Mae and Freddie Mac until it was too late to do anything about the risks they had taken? Do you contend that the Bush Administration did not push for more regulation of those two organizations? Do you claim Chuck Hagel did not introduce legislation? Is there something wrong with the facts I presented, or do you believe that attacking the sources is sufficient to make your case?

    I’ll admit to the fact that I wanted to post some evidence on the evening before Thanksgiving, and did not have the time to completely vet my sources…oh yeah, I already explained that in my first post. I suppose I could throw around some insults, but they taught me in debate class that is a no-no.

    Do you have any other facts you would like to enter into the record, or does your rebuttal end with the witty assertions about my academic record?

    Ben Rudnick
    Collegian Columnist

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