prevailing wage requirements

Stimulus Package Forces States to Raise Taxes, Harms Economy

by Hans Bader on January 2, 2010 · 2 comments

in Deregulate to Stimulate, Economy, Employment, International, Labor, Politics as Usual, Stimulus to Nowhere, Trade

The federal government’s $800 billion stimulus package, which failed to cut unemployment, is now forcing states and local governments to raise taxes. The Wall Street Journal describes how “stimulus dollars came with strings attached that are now causing enormous budget headaches . . . At the behest of the public employee unions, Congress imposed ‘maintenance of effort’ spending requirements on states. These federal laws prohibit state legislatures from cutting spending on 15 programs,” such as ”welfare, if the state took even a dollar of stimulus cash,” even if a state’s tax revenue has since fallen due to the recession.  “So when states should be reducing” their spending ”to match. . . lower revenue collections, federal stimulus rules mean many states will have little choice but to raise taxes.”

Obama claimed the stimulus package was needed to prevent the economy from suffering from “irreversible decline,” but the Congressional Budget Office admitted that the stimulus package actually would shrink the economy “in the long run.”  Unemployment has skyrocketed past European levels, as big-spending countries have fared worse than thrifty ones.

The Washington Examiner says that “75,000 jobs” Obama has claimed credit for are “clearly imaginary” or “highly doubtful.”  That includes thousands of jobs the administration claims credit for creating in nonexistent Congressional districts. As the Examiner notes:

If his stimulus program was approved, Obama promised, unemployment would not go above 8 percent this year. The reality is that it passed 10.3 percent in October. So now the stimulus books are being cooked to mollify an anxious public worried that real-world jobs continue to disappear and angry that Obama has thrown almost $1 trillion down the stimulus rathole.

The stimulus package actually destroyed thousands of real world jobs by triggering trade wars with Canada and Mexico that killed jobs in America’s export sector (the stimulus package barred a measley 97 Mexican truckers from U.S. roads, a minor NAFTA violation that led to massive Mexican retaliation against U.S. exports of 40 farm products and kitchen goods worth $2.4 billion).  It also is wiping out jobs by inflicting costly mandates on state governments (such as repealing welfare reform, and imposing costly “prevailing wage” regulations and expensive racial set-asides).

The stimulus package has since spawned countless examples of government waste and corruption.  Recently, Obama fired an inspector general, Gerald Walpin, who uncovered millions of dollars of waste and fraud in the AmeriCorps program, including by a prominent Obama supporter, endangering the Obama supporter’s ability to administer federal stimulus spending in Sacramento.  Obama’s alleged justification for firing the inspector general turned out to be false.

Stimulus Package Creates Imaginary Jobs, Destroys Jobs in the Real World

by Hans Bader on November 17, 2009 · 4 comments

in Agriculture, Deregulate to Stimulate, Economy, Employment, International, Labor, Legal, Personal Liberty, Politics as Usual, Precaution & Risk, Sanctimony, Stimulus to Nowhere, Trade

President Obama’s $800 billion stimulus package creates imaginary jobs, while destroying ones in the real world.

Billions from the stimulus are being spent on creating tens of thousands of imaginary jobs in 440 phantom Congressional districts, according to the government’s own web site:

Just how big is the stimulus package? Well for one, it has doubled the size of the House of Representatives, according to recovery.gov, which says that funds were distributed to 440 congressional districts that do not exist. . . . The web site operates on an $84 million budget and is tasked with monitoring the distribution of the $787 billion stimulus package passed by Congress–which, for the record, counts 435 members–in early 2009.

The site’s monitors, however, are not too savvy about America’s political or geographic landscape. More than $2 million was given to the 99th District of North Dakota, a state which has only one congressional district. In order to qualify for 99 districts, North Dakota would have to have a population of about 60 million people, almost 24 million more people than California.

From ABC News:

Here’s a stimulus success story: In Arizona’s 15th Congressional District, 30 jobs have been saved or created with just $761,420 in federal stimulus spending. At least that’s what the website set up by the Obama Administration to track the $787 billion stimulus says.

There’s one problem, though: There is no 15th Congressional District in Arizona; the state has only eight Congressional Districts.

There’s no 86th Congressional District in Arizona either, but the government’s recovery.gov Web site says $34 million in stimulus money has been spent there.

In fact, Recovery.gov lists hundreds of millions spent and hundreds of jobs created in Congressional districts that don’t exist.

The Washington Examiner says that “75,000 jobs” Obama has claimed credit for are “clearly imaginary” or “highly doubtful.” Readers can view its interactive map of “Inflated Jobs by State.”

As the Examiner notes, “If his stimulus program was approved, Obama promised, unemployment would not go above 8 percent this year. The reality is that it passed 10.3 percent in October. So now the stimulus books are being cooked to mollify an anxious public worried that real-world jobs continue to disappear and angry that Obama has thrown almost $1 trillion down the stimulus rathole.”

The stimulus package actually destroyed thousands of real world jobs by triggering trade wars with Canada and Mexico that killed jobs in America’s export sector (the stimulus package barred a measley 97 Mexican truckers from U.S. roads, a minor NAFTA violation that led to massive Mexican retaliation against U.S. exports of 40 farm products and kitchen goods worth $2.4 billion).  It also is wiping out jobs by inflicting costly mandates on state governments (such as repealing welfare reform, and imposing costly “prevailing wage” regulations and expensive racial set-asides).

Obama claimed the stimulus package was needed to prevent the economy from suffering from “irreversible decline,” but the Congressional Budget Office admitted that the stimulus package actually would shrink the economy “in the long run.”  Unemployment has skyrocketed past European levels, as big-spending countries have fared worse than thrifty ones.

The stimulus package has since spawned countless examples of government waste and corruption.  Recently, Obama fired an inspector general, Gerald Walpin, who uncovered millions of dollars of waste and fraud in the AmeriCorps program, including by a prominent Obama supporter, endangering the Obama supporter’s ability to administer federal stimulus spending in Sacramento.  Obama’s alleged justification for firing the inspector general turned out to be false.

Stimulus Packages Don’t Work; Obama’s $800 Billion Stimulus Will Shrink the Economy

by Hans Bader on October 1, 2009

in Economy, International, Labor, Legal, Politics as Usual, Sanctimony, Stimulus to Nowhere, Trade

“Stimulus” packages that increase government spending don’t work, notes Harvard economist Robert J. Barro in the Wall Street Journal.

The administration claimed that Obama’s $800 billion stimulus package would deliver a short-run “jolt” that would quickly lift the economy, but unemployment rose rapidly after its passage, and the package has actually destroyed thousands of jobs in America’s export sector.

Countries that refused to adopt big stimulus packages have fared better than those that imitated Obama. And the biggest-spending countries have suffered worse in the recession.

Obama claimed his stimulus package was needed to prevent the economy from falling into an “irreversible decline,” but the Congressional Budget Office repeatedly admitted that the stimulus package will shrink the economy “in the long run.” The stimulus package subsidized lots of government waste and corruption.

Obama’s welfare-filled stimulus package largely repealed welfare reform.  That will result in lower employment and a smaller economy over the long run.

Earlier this year, Obama fired an inspector general, Gerald Walpin, who uncovered waste and fraud in the AmeriCorps program, including by a prominent Obama supporter, affecting his access to stimulus money.

The stimulus package imposes on state governments wasteful racial set-asides and union-backed prevailing-wage requirements. The prevailing-wage requirements will cost $17 billion. Racial set-asides are very costly.

Economies are like children: they naturally grow, unless they are subjected to especially severe abuse and neglect by the government.  So the U.S. economy will turn around by November 2010, despite Obama’s economic mismanagement and wasteful spending.

But long-run economic growth is likely to be much slower thanks to his harmful economic policies, which will massively increase the national debt even while raising taxes.

Obama’s Job-Killing Stimulus Package Replaced Investments With Welfare, Out of Political Correctness

by Hans Bader on June 25, 2009 · 1 comment

in Economy, Employment, Labor, Politics as Usual, Regulation, Sanctimony, Stimulus to Nowhere

Obama’s $800 billion stimulus package was purged of most investments in roads and bridges, and filled instead with welfare and social spending, out of political correctness, after feminist leaders complained that building and repairing roads and bridges would put unemployed blue-collar men to work, rather than women.

Christina Hoff Sommers points out that “of the 5.7 million jobs Americans lost between December 2007 and May 2009, nearly 80 percent had been held by men. . . .Men are bearing the brunt of the current economic crisis because they predominate in manufacturing and construction, the hardest-hit sectors, which have lost more than 3 million jobs since December 2007. Women, by contrast, are a majority in recession-resistant fields such as education and health care, which gained 588,000 jobs during the same period.”

But when the Administration floated the concept of “an ambitious . . . stimulus program to modernize roads, bridges, schools, electrical grids, public transportation, and dams” as a way of “reinvigorating the hardest-hit sectors of the economy,” “Women’s groups were appalled,” asking “Where are the New Jobs for Women?” and denouncing what they called “The Macho Stimulus Plan.”

The Obama Administration quickly knuckled under to this pressure, replacing its recovery package with an $800 billion stimulus package that instead “skews job creation somewhat towards women” by spending money instead on social services like welfare that are administered mostly by female employees.

“A recent Associated Press story reports: ‘Stimulus Funds Go to Social Programs Over ‘Shovel-ready’ Projects.’ A team of six AP reporters who have been tracking the funds find that the $300 billion sent to the states is being used mainly for health care, education, unemployment benefits, food stamps, and other social services.” Or, as another AP report put it, “Stimulus Aid Favors Welfare, Not Work, Programs.”

The stimulus package also repealed welfare reform, as Slate’s Mickey Kaus and the Heritage Foundation have noted. Obama ran campaign ads claiming to support welfare reform, even though he had actually fought against meaningful welfare reform as an Illinois legislator. The stimulus package largely repeals the welfare-reform law passed by Congress in 1996.

Obama claimed the stimulus package was needed to prevent the economy from suffering from “irreversible decline,” but the Congressional Budget Office admitted that the stimulus package would shrink the economy “in the long run.” The stimulus package has since destroyed thousands of jobs in America’s export sector, and subsidized countless examples of government waste and corruption.

Recently, Obama fired an inspector general, Gerald Walpin, who uncovered millions of dollars of waste and fraud in the AmeriCorps program, including by a prominent Obama supporter, endangering the Obama supporter’s ability to administer federal stimulus spending in Sacramento.

The stimulus package also imposes on states racial set-aside requirements and prevailing-wage requirements, which increase the cost to taxpayers of government contracts. The prevailing-wage requirements will inflate the cost of state construction and transportation projects by at least $17 billion. Racial set-asides also are very costly to taxpayers.