Obama's Stimulus: A Colossal Waste?

Skull Pilot

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Nov 17, 2007
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WASHINGTON -- Judged by his own standards, President Obama's $787 billion economic stimulus program is deeply disappointing. For weeks, Obama has described the economy in grim terms. "This is not your ordinary run-of-the-mill recession," he said at his Feb. 9 news conference. It's "the worst economic crisis since the Great Depression." Given these dire warnings, you'd expect the stimulus package to focus almost exclusively on reviving the economy. It doesn't, and for that, Obama bears much of the blame.

The case for a huge stimulus -- which I support -- is to prevent a devastating downward economic spiral. Spending is tumbling worldwide. In the fourth quarter of 2008, the U.S. economy contracted at a nearly 4 percent annual rate. In Japan, the economy fell at a nearly 13 percent rate; in Europe, the rate was about 6 percent. These are gruesome declines. If the economic outlook is as bleak as Obama says, there's no reason to dilute the upfront power of the stimulus. But that's what he's done.

His politics compromise the program's economics. Look at the numbers. The Congressional Budget Office (CBO) estimates that about $200 billion will be spent in 2011 or later -- after it would do the most good. For starters, there's $8 billion for high-speed rail. "Everyone is saying this is (for) high-speed rail between Los Angeles and Las Vegas -- I don't know," says Ray Scheppach, executive director of the National Governors Association. Whatever's done, the design and construction will occupy many years. It's not a quick stimulus.

Then there's $20.8 billion for improved health information technology -- more electronic records and the like. Probably most people regard this as desirable, but here, too, changes occur slowly. The CBO expects only 3 percent of the money ($595 million) to be spent in fiscal 2009 and 2010. The peak year of projected spending is 2014 at $14.2 billion.

Big projects take time. They're included in the stimulus because Obama and Democratic congressional leaders are using the legislation to advance many political priorities instead of just spurring the economy. At his news conference, Obama argued (inaccurately) that the two goals don't conflict. Consider, he said, the retrofitting of federal buildings to make them more energy efficient. "We're creating jobs immediately," he said.

Yes -- but not many. The stimulus package includes $5.5 billion for overhauling federal buildings. The CBO estimates that only 23 percent of that would be spent in 2009 and 2010.

Worse, the economic impact of the stimulus is already smaller than advertised. The package includes an obscure tax provision: a "patch" for the alternative minimum tax (AMT). This protects many middle-class Americans against higher taxes and, on paper, adds $85 billion of "stimulus" in 2009 and 2010. One problem: "It's not stimulus," says Len Burman of the nonpartisan Tax Policy Center. "(Congress was) going to do it anyway. They do it every year." Strip out the AMT patch, and the stimulus drops to about $700 billion, with almost 30 percent spent after 2010.

The purpose of the stimulus is to minimize declines in one part of the economy from dragging other sectors down. The next big vulnerable sector seems to be state and local governments. Weakening tax payments create massive budget shortfalls. From now until the end of fiscal 2011, these may total $350 billion, says the Center on Budget and Policy Priorities (CBPP), a liberal advocacy group. Required to balance their budgets, states face huge pressures to cut spending and jobs or to raise taxes. All would worsen the recession and deepen pessimism.

Yet, the stimulus package offers only modest relief. Using funds from the stimulus, states might offset 40 percent of their looming deficits, says the CBPP's Nicholas Johnson. The effect on localities would probably be less. Congress might have done more by providing large, temporary block grants to states and localities and letting them decide how to spend the money. Instead, the stimulus provides most funds through specific programs. There's $90 billion more for Medicaid, $12 billion for special education, $2.8 billion for various policing programs. More power is being centralized in Washington.

No one knows the economic effects of all this; estimates vary. But Obama's political strategy stunts the impact from what it might have been. By using the stimulus for unrelated policy goals, spending will be delayed and diluted. There's another downside: "Temporary" spending increases for specific programs, as opposed to block grants, will be harder to undo, worsening the long-term budget outlook.

Politics cannot be removed from the political process. But here, partisan politics ran roughshod over pragmatic economic policy. Token concessions (including the AMT provision) to some Republicans weakened the package. Obama is gambling that his flawed stimulus will seem to work well enough that he'll receive credit for restarting the economy -- and not blamed for engineering a colossal waste.

Copyright 2009, Washington Post Writers Group

The economy probably would have started to rebound by 2010 anyway and obama will say it's all his doing. the funny part is you Dimocrats will believe him.
 
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Yes Jillian we all know you think criticism is whining.

the only speech you approve of is the type that leaves lip prints on the nether regions of Dimocrats.
 
Interesting to see a criticism that isn't based entirely upon the premise that government spending is bad. I'd rather see specific suggestions though. I don't think doing things that are useful for our economy in the long-run and provide some jobs can be called a total waste, but I do see why we may want more of that money to hit the economy ASAP. How would one do that?
 
Interesting to see a criticism that isn't based entirely upon the premise that government spending is bad. I'd rather see specific suggestions though. I don't think doing things that are useful for our economy in the long-run and provide some jobs can be called a total waste, but I do see why we may want more of that money to hit the economy ASAP. How would one do that?

not that i am in favor of massive spending that does nothing more than expand government programs and expense in the future (like the stimulus does). But to answer your question, rather than giving states money that is to be spent on specific entitlement program expansion that will be difficult if not impossible to end once the federal money runs out leaving states to find the funding to keep those new and expanded programs afloat, block grants of money from the federal government would allow states to spend that money directly and quickly in areas of each state deemed to be most in need by individual state legislatures.

But in the stimulus as is, we have the bulk of the spending to be done sometime in the future and most likely after the economy would have started to recover on its own. the real purpose of this stimulus was to centralize power in Washington and to do an end run around states' rights. the expansion of government and continued expense of what was supposed to be a one time shot in the arm is the tell.
 
Yes Jillian we all know you think criticism is whining.

the only speech you approve of is the type that leaves lip prints on the nether regions of Dimocrats.

Jillian LOVES to whine, she just doesn't like it when someone points out her GREAT LEADER is a Fraud and a failure. I remember well all her whines about the republican Congress and President Bush. Now she whines about others doing what she did. Of course when she did it, it was patriotic and just looking out for the Country.
 
Longer term economic stimulus projects like building large infrastructure projects are a good idea.

They provide stimulation immediately and over time, too. As it is the ability to count on longer term projects which gives confidence to people.

Give how we've pissed away trillions of foolishness, my major complain about this stimulus is that it probably isn't large enough.

But as I know that we can and will go back to this well, I'm not too upset about that.

Of course, the converatives complain and warn us that if we overstimulate we will experience hyperinflation.

But as long as the inflation doesn't become STAGFLATION, that's actually a good thing.

Inflation will reduce the amount of goods we import and increase the amount of goods we export.

Additionally, that means that the dollars we pay back are worth less than the dollars we borrowed.

PART of what has been screwing this nation is the fact that our currency's value was too high compared to other nation's currencies.

Since CHINA (as one example..the largest one, too) refuses to revalue their currency exchange with ours, they have benefitted by exporting to us.

In essance they have been exporting their unemployment problems to us.

I think we need to spend more, to borrow more and to drive down the value of the US dollar.

The other added benefit of that (assuming again we don't go into stagflation) is the the american people, who are in DEBT will be paying back their mortgages and other debts with devalued dollars, too.
 
What sucks is we are going to be out of the recession by the time this money kicks in... This is piss poor planning by Obama, " the smartest man in the World"... It's no wonder Democrats don't run businesses... They would be broke before they even got the company up and running.
 
Stimuli building projects that take years to plan don't do squat.

not one infrastructure project that was not already in the works before the last election will see one shovelful of dirt turned over for at least 18 months if not 24 or 30.

the the stimulus becomes what we should have been doing all along. there are billions collected at the state and federal level that were supposed to be specifically designated for highway and bridge maintenance.

i ask you where has all that money been spent that our infrastructure is crumbling around our ears?

taxes on utilities should be used to improve those utilities but have they?

so the answer is as always more taxes. maybe not income taxes except for on those evil rich people and businesses of course but other taxes will rise because merely taking a couple hundred thousand more a year from the rich ain't gonna cut it. And since we've seen that government can't seem to spend taxes where they are supposed to be spent, that you believe giving even more money to those who have been nothing but irresponsible with the money they've already confiscated from us to spend as irresponsibly as they have done in the past boggles my mind.
 
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Stimuli building projects that take years to plan don't do squat.

A reasonable complaint. Hence the emphasis by this ADmin on "shovel ready" projects.

not one infrastructure project that was not already in the works before the last election will see one shovelful of dirt turned over for at least 18 months if not 24 or 30.

Yeah, that's probably true.

the the stimulus becomes what we should have been doing all along. there are billions collected at the state and federal level that were supposed to be specifically designated for highway and bridge maintenance.

No argument from me on that front. If any of you really want to see gangsterism on the state level, go look at your DOTS.
i ask you where has all that money been spent that our infrastructure is crumbling around our ears?

I've been asking myself that question for many years.
taxes on utilities should be used to improve those utilities but have they?

I don't know.

so the answer is as always more taxes.

Taxes deferred, of course.

That's how the USA has been working for a mighty long time regardless of whether the Republicans or Democrats were at the helm.


maybe not income taxes except for on those evil rich people and businesses of course but other taxes will rise because merely taking a couple hundred thousand more a year from the rich ain't gonna cut it.

What you mean the $5 trillion in taxes on the superwealthy that have not collected in the last 8 years, thanks to Bush II's tax cuts, might have been a mistake?

I'm shocked to read you finally are beginning to understand that.



And since we've seen that government can't seem to spend taxes where they are supposed to be spent, that you believe giving even more money to those who have been nothing but irresponsible with the money they've already confiscated from us to spend as irresponsibly as they have done in the past boggles my mind.

My complaints were more about the money that was NOT given to our government all along, actually.

Both are minds are boggled, but apparently for slightly different reasons.
 
Ok we should let our schools fail our kids and I am not talking about teachers, we should just keep giving our money to the oil cartels of the world, we should let our infrastructure collapse under our feet. I am tired of everyone with this glass is half empty bull, we should take what we have and work with it. Be honest alot of our schools need help especially in low income and rural areas, the places that (wait for it) most of you guys ignore. These people need help, our bridges I have traveled around a bit I would not be surprised people are scared to cross them. You guys need to be more positive or is it you are sooo anti Obama that you couldnt be positive if he put 1000 in your pocket. This is about us and our kids not nothing else everything needs to be ready for them to succeed and we need to help them, they atleast deserve a good education in a state of the art classroom and school.
 
Ok we should let our schools fail our kids and I am not talking about teachers, we should just keep giving our money to the oil cartels of the world, we should let our infrastructure collapse under our feet.

OK so I'll ask you again. There are taxes collected at the local, state and federal level, specifically, state and federal gas taxes, local excise taxes and state and federal tolls, to the tune of billions of dollars every single year. we have been told by our so called leaders that this money is to be exclusively for maintenance of our roads and bridges and yet as you say, these very roads and bridges that the government collects billions of our dollars to fix are crumbling.

On what exactly has all this money been spent if not on roads and bridges?

If the government (state and local) cannot be trusted to spend these billions of dollars correctly, what on earth makes you think that government will all of a sudden spend trillions of dollars correctly?

I am tired of everyone with this glass is half empty bull, we should take what we have and work with it
.

Yes take the taxes we already pay and use that money for what it was intended. Don't buy expensive opulent furnishings and nick knacks or unneeded pieces of pretentious art for public buildings. Stop letting politicians vote themselves pay raises while telling you if they don't raise more money (BTW that means taking more money from you) they will have to fire cops, firemen and teachers.

the glass ain't half full, our fucking wallets are half full and the government should take no more from us.


Be honest alot of our schools need help especially in low income and rural areas, the places that (wait for it) most of you guys ignore.

The federal government is largely to blame for that. You see federal money is always contingent upon forcing the schools to implement some ridiculous social program rather than on actually teaching our kids to read, write and think critically.

These people need help, our bridges I have traveled around a bit I would not be surprised people are scared to cross them.

See above

You guys need to be more positive

And you need to be more realistic and less trusting of the very politicians who will take $100 from you then give you back $10 all the while telling you that the government just helped you out.

or is it you are sooo anti Obama that you couldnt be positive if he put 1000 in your pocket. This is about us and our kids not nothing else everything needs to be ready for them to succeed and we need to help them, they atleast deserve a good education in a state of the art classroom and school.

If any politician puts $1000 in your pocket, you can bet it will cost you $10,000 down the line especially since your beloved politician didn't get that money by reducing spending.

And a good teacher will do more for your kids than a new classroom ever will. But we can't fire teachers based on merit because of the NEA.

So maybe, just maybe you should direct your optimism somewhere other than government.
 
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Wow you would come at me like that ok you go to a school where you dont have any computers hell no you would bitch and moan why our school doesnt have computers but the other schools near the city has them. Yeah it would be great to have a good teacher too but hey they can teach all day but if they dont have the tools it doesnt help does it. Where was the first place you used a computer if lately it would be home for me it was at my elementary school, why it had money period. This children do not even have this type of opportunity so you mean to tell me these kids dont deserve a school to perpare them if they have a good teacher thats it man you are full of it.

I give you this if you represent anything it is the ignorance of why our education lags behind pretty much most of the other OCED countries :clap2:
 
Wow you would come at me like that ok you go to a school where you dont have any computers hell no you would bitch and moan why our school doesnt have computers but the other schools near the city has them. Yeah it would be great to have a good teacher too but hey they can teach all day but if they dont have the tools it doesnt help does it. Where was the first place you used a computer if lately it would be home for me it was at my elementary school, why it had money period. This children do not even have this type of opportunity so you mean to tell me these kids dont deserve a school to perpare them if they have a good teacher thats it man you are full of it.

I give you this if you represent anything it is the ignorance of why our education lags behind pretty much most of the other OCED countries :clap2:

The point is that we don't have the money for any of that in the first place. Yes, it'd be great if all schools were state of the art facilities designed to cater to the needs of any and every student, but how do we pay for it? The federal government didn't just have $787 billion sitting around waiting to be spent. They're going to print that money up, and creating money doesn't create wealth. You simply devalue the currency. Peter Schiff said it best, this spending package isn't a stimulus, it's a depressant.
 
Wow you would come at me like that ok you go to a school where you dont have any computers hell no you would bitch and moan why our school doesnt have computers but the other schools near the city has them.

You do realize that the scientists who put a man on the moon never saw a computer and when they did those computers had the power of an old digital watch. You do realize that the engineers who designed the SR 71 Blackbird did so with slide rules and pencils. that plane was so far ahead of its time that nothing today has broken the records set by it.

And why is it that African kids can be given laptops that cost as little as $150 but you need billions spent on computer labs at a school?

Engineering change: Plugging Africa's kids in to $100 laptop - CNET News

Yeah it would be great to have a good teacher too but hey they can teach all day but if they dont have the tools it doesnt help does it.

A computer is not an absolute necessity to teach a child to reading, writing (IMO computers hamper writing skills), history, or math. All one needs are some books and some imagination to teach these subjects.

Where was the first place you used a computer
I didn't own a computer until i was in my 30's and i bought my first laptop at 42.

if lately it would be home for me it was at my elementary school, why it had money period. This children do not even have this type of opportunity so you mean to tell me these kids dont deserve a school to perpare them if they have a good teacher thats it man you are full of it.

God forbid if kids have to learn to look something up in a book or read the newspaper instead of surfing the web.

I give you this if you represent anything it is the ignorance of why our education lags behind pretty much most of the other OCED countries :clap2:

I am willing to bet that education was a hell of a lot better before kid were staring at computer screens all day. You are obviously not old enough to see that basic skill sets like reading, writing and math have been on a steep decline.

Spell check and calculators have reduced our younger generations to a gaggle of google morons who can't spell or do simple math.
 

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