Wasteful Stimulus Package Fails Even In Short Term

by Hans Bader on May 19, 2009 · 5 comments

in Bailout Watch, Economy, Employment, Politics as Usual, Stimulus to Nowhere

1.2 million Americans have lost their jobs since the $800 billion stimulus package was signed into law. The Congressional Budget Office predicted it would shrink the economy “in the long run,” but create jobs in the short run.

But the stimulus package turned out to be harmful even in the short run, because it was so badly designed. It poured money into sectors of the economy where no help is needed because unemployment is low, while siphoning money out of sectors where unemployment is high. Moreover, an Associated Press study “found that states hit hardest by the recession are getting the least amount of stimulus spending.”

The stimulus package has directly destroyed tens of thousands of jobs. A provision in the stimulus package that blocked 97 Mexican truckers from U.S. roads “caused Mexico to retaliate with tariffs on 90 goods affecting $2.4 billion in U.S. trade,” destroying 40,000 American jobs.

It also ignited a trade war with Canada. In response to vague “buy American” provisions in the stimulus package, “A number of Ontario towns, with a collective population of nearly 500,000, retaliated with measures effectively barring U.S. companies from their municipal contracts — the first shot in a larger campaign that could shut U.S. companies out of billions of dollars worth of Canadian projects.”

Yet, Obama had the audacity to claim that only passing the stimulus package would save us from “irreversible decline” and economic ““disaster”.

Obama’s policies echo those of Herbert Hoover, who helped spawn the Great Depression through his protectionism and tax increases.

Canada vs US economy May 20, 2009 at 4:47 pm

As soon as Obama lowers the quality of health care in the United States, I'd say both Canada and the U.S. will be on equal levels there. However, as for spending and the economy, if Obama keeps printing and borrowing money (in turn further declining the economy), Canada will be much stronger than the U.S. on that front. For the next 3 to 8 years, the stock market probably won't do much. Just a guess. Until we get some competent politicians in office, they'll keep destroying what used to be the greatest engine to the economy on earth. Sigh.

Sam June 16, 2009 at 4:50 pm

The stimulus package is also full of waste, such as for expensive repairs to a long-abandoned railroad bridge, seldom-used rural bridges, a runway at a seldom-used airport kept alive with taxpayer funds, and school buildings in urban school districts that have vacant unused school buildings and declining populations and enrollmennts.

And it's a found of corruption, since some of it will go to groups like ACORN that have been indicted for corruption.

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