stimulus plan

“Join Your Fellow Pervs for Some Explicit, Twisted Fun” Courtesy of Obama’s Stimulus Package

by Hans Bader on August 11, 2009 · 2 comments

in Economy, Healthcare, Legal, Personal Liberty, Politics as Usual, Sanctimony, Stimulus to Nowhere

“Join your fellow pervs for some explicit, twisted fun,” urged a recipient of more than $25,000 from Obama’s $800 billion stimulus package, which received the money through the National Endowment for the Arts. The stimulus is also being spent on “nude simulated-sex dances, Saturday night ‘pervert’ revues,” and “pornographic horror films.” While providing taxpayer funds for “numerous” sexually perverse projects, and lots of money for welfare, the stimulus package has done little for America’s roads and bridges.

Why? Because feminist leaders complained that rebuilding roads and bridges would employ working-class men, who have borne the brunt of the recession, rather than women or the “sexually diverse.” Unemployment is very high among transportation and construction workers, who are overwhelmingly male. The vast majority of people who have lost their jobs in the current recession are male — 82%. But the stimulus package is not aimed at helping them. In response to demands from feminist leaders, the Obama Administration rewrote the stimulus package to largely exclude them, as Christina Hoff Sommers has chronicled at length.

The Obama Administration purged the stimulus package of most of the investments in roads and bridges originally suggested by economists, and filled it 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.

As Christina Hoff Sommers points out, “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.” Less than 6 percent of it ended up going to transportation.

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.

Racial quotas, set-asides, and affirmative action are also mandated by Obama’s health-care plan, drawing criticism from the U.S. Commission on Civil Rights, reports today’s Washington Times. Earlier, the Commission criticized the Obama Administration for turning a blind eye to racist voter intimidation by black panthers, including an Obama poll watcher and Democratic official who used a nightstick and racial epithets to drive white voters away from a Philadelphia polling place.

Deficit Rises $880 Billion to Record $1.3 Trillion, Due to Massive, Unprecedented Government Spending

by Hans Bader on August 8, 2009 · 9 comments

in Economy, Employment, Healthcare, Politics as Usual, Sanctimony, Stimulus to Nowhere, Trade

The federal budget deficit has already risen by $880 billion to an unprecedented $1.3 trillion. Most of the increase is attributable to recent increases in federal spending, including Obama’s $800 billion stimulus package, which the Congressional Budget Office says will actually shrink the economy in “the long run,” and which ended welfare reform, destroyed thousands of jobs in the export sector, and substituted welfare for productive investments.

Ironically, Obama had campaigned on a promise, since broken, to make a “net spending cut” in federal spending.

The increase in the deficit is driven largely by reckless federal spending, even though federal tax revenue fell at the fastest rate since 1932 thanks to the recession.

The Obama Administration wants to pile on even more federal spending, including a health-care “reform” proposal predicted to cost at least $1,000,000,000,000 ($1 trillion). In reality, Obamacare will likely cost far more than predicted, the way past health-care expansions always have.

One of Obama’s own advisers says the Obama Administration’s health-care plan will harm people with insurance while raising their taxes. CNN says Obamacare will take away 5 freedoms. It will also destroy many affordable health-care plans while breaking Obama’s campaign promises.

ObamaCare also contains affirmative action and subsidies for left-wing community organizers, and preferences for illegal aliens, who are exempt from its taxes and penalties, but may be able to access its benefits due to lack of meaningful eligibility verification safeguards.

Billions More for Wasteful Auto Bailouts

by Hans Bader on July 31, 2009 · 1 comment

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

The auto bailouts keep expanding. Billions more are going to be spent on wealthy auto-dealers, cash-for-clunkers, politically-correct cars few people will buy, and excessive benefits for autoworkers who are richer than the average American.

The Administration’s cash-for-clunkers program has already run out of money, burning through the $1 billion it was supposed to cost. The program rewards people who bought ancient gas-guzzlers, giving them, and not more environmentally-responsible people, federal tax credits for trading them in to buy new cars. The new cars purchased can be almost as gas-guzzling as the ones being traded in, getting as little as 2 miles a gallon more than their old gas-guzzler. The new purchases are supposed to boost the Detroit automakers that the Administration recently bailed out at a cost of $70 billion.

Although the money has run out, the Obama Administration says that it will keep running this wasteful program anyway, at taxpayers’ expense. During the Bush Administration, lawmakers of both parties said the government cannot spend money unless it has been legislatively appropriated, and that such limits are the “tap root of Anglo-American liberty.” But now, with a Democrat in the White House, liberal Congressional leaders are happy to see Obama spending money he doesn’t have, so that the cash-for-clunkers program can continue until Congress gets around to passing a bill that will authorize more spending.

House Democrats hope to vote today on a measure to authorize $2 billion more in spending on the program. But Senate approval isn’t expected soon. So there’s talk of using federal “stimulus money” to pay for cash-for-clunkers. (The $800 billion stimulus package is already full of welfare and waste. It is expected to cut the size of the economy “in the long run.” Although it was supposed to give the economy a short-run “jolt”, it actually destroyed thousands of jobs in America’s export sector, and increased unemployment. It also ended welfare reform.)

Taxpayers and businesses are expected to pay billions as a result of the Obama Administration’s decision to make a federal pension-insurer take over the massive pension liabilities of an auto-parts maker once owned by General Motors, so that General Motors, which was responsible for them, will have more money left over to maintain the extraordinarily generous pension benefits of the United Auto Workers, whose pay is much higher than that of the average American.

Meanwhile, in a move expected to cost General Motors around $2.5 billion annually, “the House has passed a bill reversing GM’s decision to shutter 2,000 auto dealers. Taking advantage of bankruptcy protection, GM undertook the cost-saving measure because state franchise laws had crippled its ability to reduce its bloated, 7,000-dealer network. By contrast, Toyota — with the same market share as GM — has fewer than 1,500 dealers.”

Henry Payne lists some of the many ways that the Detroit automakers have been mismanaged by the federal government “in just the last 90 days” of the bailouts: “At the request of the UAW, the President’s Auto Task Force forced GM to build its new “small-B segment” compact car in the United States instead of in the Far East. This despite the fact that not one manufacturer — not even the Asian companies — builds a small-B in the U.S., due to lack of market demand and high labor costs. GM likely would not build a small-B at all (since companies just emerging from bankruptcy usually try to build profitable products) were it not for the president’s personal distaste for GM’s lineup of ‘bigger, faster’ cars. To correct this, Obama has mandated the cars Detroit automakers “still refuse to make” — that is, a fleet of vehicles that average 35 mpg by 2016. After a one-on-one meeting with Rep. Barney Frank (D., Mass.), GM chief executive Fritz Henderson will delay the closing of a parts-distribution center in Norton, Mass.”

Payne also notes that the cash-for-clunkers program harms the economy by containing provisions that make “used-car and parts businesses suffer.”

The auto bailouts were funded primarily through money contained in the $700 billion bank bailout law passed last year. Diverting money from the bank bailout to auto bailouts was illegal or unconstitutional, agree many commentators, like the Heritage Foundation, Clinton Administration Labor Secretary Robert Reich, and liberal journalist Andrew Sullivan. The bailouts ripped off taxpayers, pension funds for public employees, banks, and non-union retirees, in order to enrich the United Auto Workers Union, whose excessive pay helped bankrupt the Detroit automakers. But the courts have avoided dealing with those serious legal issues by claiming (erroneously in my opinion) that the bailout’s critics were not the correct people to bring legal challenges.

The stimulus package may not be stimulating the economy, but maybe it’s not the economy it was designed to stimulate: “The National Endowment for the Arts may be spending some of the money it received from the [stimulus] to fund nude simulated-sex dances, Saturday night ‘pervert’ revues and the airing of pornographic horror films at art houses in San Francisco.” Meanwhile, unemployed blue-collar workers in construction and transportation were largely excluded from the stimulus package because helping them was viewed as politically-incorrect.

Obama Health-Care Plan Would Take Away 5 Important Freedoms, CNN Says; Obama Would Also Raise Taxes, End Affordable Plans, and Break Promises

by Hans Bader on July 27, 2009

in Energy, Environment, Ethanol, Global Warming, Healthcare, Politics as Usual, Stimulus to Nowhere, Trade

CNN notes that there are “5 freedoms you’d lose in health care reform” as promoted by the Obama Administration: the freedom to choose your doctors, the freedom to choose what’s in your plan, the freedom to keep your existing plan, the freedom to be rewarded for healthy living, and the freedom to choose high-deductible coverage.

Earlier, we described how Obama’s health-care plan would destroy many affordable health-care plans, raise taxes on the middle class, and break Obama’s campaign promises, as well as his recent pledge that “if you like your health care plan, you can keep it.”

As CNN notes, “the Obama platform would mandate extremely full, expensive, and highly subsidized coverage — including a lot of benefits people would never pay for with their own money — but deliver it through a highly restrictive, HMO-style plan that will determine what care and tests you can and can’t have.” “If you prize choosing your own cardiologist or urologist under your company’s Preferred Provider Organization plan (PPO), if your employer rewards your non-smoking, healthy lifestyle with reduced premiums, if you love the bargain Health Savings Account (HSA) that insures you just for the essentials, or if you simply take comfort in the freedom to spend your own money for a policy that covers the newest drugs and diagnostic tests — you may be shocked to learn that you could lose all of those good things under the rules proposed in the two bills” that Congressional leaders have drafted to implement Obama’s plan.

House Speaker Nancy Pelosi wants to rush the health-care bill through Congress before most people can even figure out what’s in the bill. That’s how she pushed through Congress the $800 billion stimulus package, which contained hidden provisions that ended welfare reform, and which is now projected to cut the size of the economy “in the long run.” (The stimulus package was supposed to 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, as well as subsidizing welfare and waste.)

The bill may be rewritten at the last moment to provide more giveaways to special interests, like the huge cap-and-trade energy tax that Pelosi recently strong-armed through the House. (As Obama once noted, his version of that tax would make people’s electric bills “skyrocket.”) The energy tax was pushed through before the text of the bill even became available. The bill was over 1090 pages long and contained special interest giveaways to a legion of big corporations and their lobbyists. At the last minute, 300 more pages were added to the bill that few in Congress had even read, and had to be manually inserted into the existing 1000 pages after the bill was passed, based on guesses about where those pages would fit in. Thus, the bill did not even really exist at the time it was passed.

These tax increases are part of a long line of broken promises, such as Obama’s pledge to enact a “net spending cut,” which he flouted with proposed budgets that will explode the national debt through $9.3 trillion in massively increased deficit spending.

Obamacare would also apparently restrict resources for end-of-life care for the elderly, and mandate wasteful end-of-life counseling for the elderly (such as lecturing them about the right to hasten their own death by refusing nutrition).

Earlier, the non-partisan Congressional Budget Office gave an honest but “devastating assessment” of the incredibly high cost of the health-care plans backed by Obama, which would cost well over a trillion dollars, to cover just a fraction of the uninsured.

Obama is angry about that truthful conclusion, as well as the CBO’s finding that his wasteful stimulus package will actually reduce the size of the economy “in the long run.” (Obama had claimed that only his stimulus package could save America from “disaster” and “irreversible decline“).

So Obama recently invited CBO Director Douglas Elmendorf, a “Democratic appointee,” to the White House to pressure him to reduce his cost estimates.

It is doubtful that Obamacare would live up to any of Obama’s claims. His other legislation hasn’t. His stimulus package has been a fiasco, as much of the public now realizes: just 25% say it has helped the economy.

And his cap-and-trade energy tax, if passed by the Senate, would cost the economy trillions, while doing little to cut greenhouse gas emissions, since it contains so many special interest giveaways and environmentally-destructive provisions like protections for ethanol subsidies, which harm the environment, destroy forests, and cause world hunger. Meanwhile, Obama has undermined nuclear energy, which reduces greenhouse gas emissions, by wastefully blocking use of the Yucca Mountain nuclear-waste disposal site after billions of dollars in taxpayer money had already been spent creating it.

Stimulus = Welfare + Quotas + Corruption

by Hans Bader on June 20, 2009 · 3 comments

in Economy, Employment, International, Labor, Legal, Personal Liberty, Politics as Usual, Regulation, Stimulus to Nowhere, Trade

Obama’s $787 billion stimulus package is now being used to force states to adopt racial quotas in government contracts, even if their state constitution or civil-rights laws forbid such quotas. Slate’s Mickey Kaus reports that “CalTrans, the huge state agency that spends billions in federal highway construction funds, ‘sets a quota of having 6.75 percent of contracts go to women or members of a targeted group–African American, Asian-Pacific American, and Native American.’”

The stimulus package also repealed welfare reform, as Kaus and the Heritage Foundation have noted. Obama ran campaign ads claiming to support welfare reform, even though he had actually fought against welfare reform as an Illinois legislator.

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.

At least four states (California, Michigan, Nebraska, and Louisiana) have state constitutions that ban racial set asides, but most of those bans contain exceptions for racial set-asides that are requirements for receiving federal funds. No such exception exists to the California Equal Rights Amendment, which was construed in Connerly v. State Personnel Board (2001) to bar gender-based set-asides even when they are permitted under federal law.

The $60,000 Obama Health-Care Plan: It’s “Eye-Poppingly” Expensive on a Per-Person Basis

by Hans Bader on June 19, 2009 · 1 comment

in Healthcare, Insurance, Regulation, Stimulus to Nowhere

Obama’s health-care proposals will cost well over a trillion dollars, without providing universal coverage. They are so “eye-poppingly” expensive that even Congressional Democrats have been forced to scale them back. But the Congressional Budget Office has concluded that their bill “would cover just 16 million additional people at a cost of $1 trillion,” reports the Washington Post. That’s more than $60,000 for each additional person covered! Other estimates peg the cost at $1.6 trillion.

The Examiner notes that Obama’s own Council of Economic Advisers estimated that “as much as 30 percent of Medicare spending is unnecessary,” due to poor government oversight, yet Obama wants to expand government control over the “entire” health-care “system.” The Examiner also worries that his plan will close badly-needed cancer clinics and “lead straight to rationing health care.”

Health-care expert (and former New York Lieutenant Governor) Betsy McCaughey says that contrary to Obama’s promise, you won’t necessarily be able to keep your doctor, or your insurance if you like it, under his proposed government takeover of the health-care sector.

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.

I wonder how long it will be before the President or liberal Congressional leaders similarly retaliate against the Congressional Budget Office for telling inconvenient truths about their disastrous economic policies. Not only has the CBO estimated the enormous cost of ObamaCare, it earlier pointed out that Obama’s $787 billion stimulus package will actually shrink the economy “in the long run.” (The CBO predicted that in the short-run, by the 2010 election, the stimulus would temporarily create jobs. But it hasn’t. Indeed, it has actually destroyed thousands of jobs in America’s export sector.)

The stimulus package also repealed welfare-reform, and wastes taxpayers’ money.

Obama has done nothing to make health-insurance cheaper, like letting consumers buy cheaper health-care policies across state lines (few countries have a more geographically fragmented and balkanized health-care market than we do. Private piggy-back health insurance is cheaper and less regulated even in supposedly socialist countries like France than it is here. When my Marxist French father-in-law left the grim public hospital where he had his quadruple bypass, he was able to stay cheaply and comfortably in a convalescent home using private health insurance that was much cheaper and less regulated than what he could buy in America, where 50 different states apply a bewildering patchwork of complicated rules to health-insurance, and a federal statute, strongly backed by Joe Biden, allows states to block purchase of health insurance across state lines).

Nor has Obama proposed anything to help remedy the looming doctor shortage, like getting rid of unnecessary and time-consuming requirements for becoming a doctor (in other countries, doctors can study medicine as undergraduates, without having to first graduate from college before going to medical school. That dramatically reduces the time and expense of a medical education. One of my former co-workers is the child of a doctor who emigrated from a Third World country to Canada. That doctor began treating patients soon after receiving an undergraduate degree in medicine in her home country, and now practices medicine in Canada).

More Government Waste, Corruption, and Corporate Welfare, Thanks to the Obama Administration

by Hans Bader on June 14, 2009

in Odds & Ends

Rapidly-rising Medicare spending already threatens “to crush the federal budget,” and much Medicare spending is wasteful, yet the Obama Administration claims it can somehow save money by creating Medicare-like programs to cover all Americans. In the New York Times, economics professor Tyler Cowan calls it “the new voodoo economics.” Washington Post columnist Robert Samuelson concludes that Obama’s health-care plan “is naive, hypocritical or simply dishonest. Probably all three.”

Obama is firing an inspector general who exposed wrongdoing by one of his supporters, and previously uncovered millions of dollars in waste and fraud in the troubled AmeriCorps program, whose budget is being dramatically increased by the Obama Administration. Inspector General Gerald Walpin was fired after he uncovered misuse of Americorps funds and sought to keep the wrongdoer from accessing federal “stimulus money.” The recently-passed stimulus package repealed welfare reform, and it subsidizes waste and corruption.

Congress is moving towards passing a “cash for clunkers” bill that would give people tax credits, but only if they own an old gas-guzzler that they are trading in for a new car. So if you bought a fuel-efficient car in the past, your tax dollars will be used for welfare for people who bought inefficient cars (cars with less than 18 MPG). The bill will increase the national debt (and thus future taxes) by billions of dollars. As Mike Budnick notes in the Wall Street Journal, “This type of legislation rewards people who have made poor decisions and penalizes only people who have already made good choices. Not the kind of incentive that we should propagate. Let the market work.”

Taxpayers are being ripped off to the tune of hundreds of billions of dollars to enrich wealthy buyers of so-called “toxic assets.” Meanwhile, the Obama Administration’s $787 billion stimulus package is actually killing jobs and shrinking the economy.

Congress passed an FDA tobacco regulation bill, but not without adding insidious provisions that will reduce competition in the tobacco industry, and actually make it harder to introduce products that reduce the harms and health risks of tobacco, notes the Wall Street Journal. We earlier described the bill’s pitfalls and counterproductive provisions. Obama has said he will sign the bill into law.

Billions of tax dollars are being spent on bailing out carmakers, but the primary beneficiaries of this corporate welfare are not the car companies themselves, which could have survived without federal bailouts by simply abrogating their collective bargaining agreements and dealer-contracts in a standard bankruptcy-court reorganization, but the United Auto Workers Union, which spent millions electing Obama and is now calling the shots. Taxpayers and pension funds are being ripped off to enrich the UAW, which enjoys wages much higher than the average American.

A similar government bailout of the auto industry actually backfired in England in the 1970s, destroying its carmakers by leaving them with excessive wages, inefficiency, and political meddling in car design.

Now, even liberal commentators are questioning whether the mushrooming auto bailouts pass constitutional muster, such as Charles Lane in today’s Washington Post. (Lane is so liberal and pro-government that in a front page article in 2003, he characterized the Supreme Court’s 2003 decisions as collectively being great for “civil liberties,” even though he admitted that the Supreme Court had rejected free speech claims in 7 out of its 8 First Amendment cases that term, largely because Lane approved of its decision upholding the University of Michigan Law School’s race-based affirmative action plan — even though legally permissible affirmative-action plans are a discretionary government function, not an individual right or civil-liberty).

Conservative columnist George Will also has a column today criticizing the auto bailouts. He points out that the Administration’s current claim that it can use TARP bank-bailout money for an auto bailout is at odds with the Treasury Department’s past admissions to the contrary: “Last September, Treasury Secretary Henry Paulson testified to the Senate that TARP money was necessary for ailing ‘financial institutions.’ Nowhere in the bill’s 169 pages was there any reference to government funding of ‘automobile’ or ‘manufacturing’ companies. In November, Paulson told a House committee: ‘I’ve said to you very clearly that I believe that the auto companies fall outside of [TARP's] purpose.’”

Earlier, commentators like the Heritage Foundation, Clinton Administration Labor Secretary Robert Reich, and liberal journalist Andrew Sullivan all agreed that the auto bailouts are illegal or unconstitutional.

Public Wants Wasteful Stimulus Package Canceled

by Hans Bader on June 10, 2009 · 1 comment

in Bailout Watch, Economy, Employment, International, Labor, Legal, Mobility, Politics as Usual, Regulation, Stimulus to Nowhere, Trade

By a margin of 45% to 36%, the American people want to cancel the $787 billion stimulus package, reports pollster Rasmussen Reports. Economist Lee Ohanian, a professor at UCLA, explains the failure of the stimulus package in “The $787 Billion Mistake.” Economist Kevin Hasset describes how legislation backed by Obama would wipe out more jobs in “Obama Tells American Businesses to Drop Dead.” Economist Arthur Laffer explains today how we face massive tax increases and potentially massive inflation as a result of current government policy.

Unemployment is even higher than the Obama Administration said it would be now if the stimulus package had never been passed. At least 1.5 million jobs have been lost since then.

The stimulus package is harming the economy, both by triggering trade wars that have cost at least 40,000 jobs, and by driving up interest rates for businesses that need to borrow money to expand or create jobs. (The government is keeping down interest rates on its own debt by printing vast sums of money to buy its own bonds, in order to finance the exploding national debt, which will result in massively higher taxes).

The Congressional Budget Office admitted the stimulus package would shrink the economy “in the long run” (contrary to Obama’s claim that it would prevent “irreversible decline“), but argued that it would at least 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, “states hit hardest by the recession are getting the least amount of stimulus spending.”

The stimulus package is just one example of the Obama Administration’s fiscal irresponsibility, which is driving up the national debt at a record rate. The illegal auto bailouts are another. They waste billions to keep unskilled auto workers enjoying wages and benefits that are much better than those enjoyed by the average American (while ripping off pension funds and bondholders).

The stimulus package has directly destroyed tens of thousands of jobs. A provision in the stimulus package that violated NAFTA by blocking a mere 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. A costly trade war with Canada is also brewing.

Obama’s policies echo those of Herbert Hoover, who helped spawn the Great Depression through his protectionism and tax increases. One of Obama’s own advisers admits that “the barrage of tax increases proposed in President Barack Obama’s budget could, if enacted by Congress, kill any chance of an early and sustained recovery.”

Stimulus Package Kills Jobs, Drives Up Unemployment

by Hans Bader on June 8, 2009 · 1 comment

in Bailout Watch, Economy, Employment, International, Labor, Legal, Mobility, Politics as Usual, Regulation, Sanctimony, Stimulus to Nowhere, Trade

Unemployment is now even higher than the Obama Administration said it would be if there were no stimulus package. At least 1.5 million jobs have been lost since Obama signed the $800 billion stimulus package into law.

The stimulus package is harming the economy, both by triggering trade wars that have cost at least 40,000 jobs, and by driving up interest rates for businesses that need to borrow money to expand or create jobs. (The government is keeping down interest rates on its own debt by printing vast sums of money to buy its own bonds, in order to finance the exploding national debt, which will result in massively higher taxes).

The Congressional Budget Office, accountable to liberal Congressional leaders, admitted the stimulus package would shrink the economy “in the long run” (contrary to Obama’s claim that it would prevent “irreversible decline“), but argued that it would at least 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, “states hit hardest by the recession are getting the least amount of stimulus spending.”

The stimulus package is just one example of the Obama Administration’s fiscal irresponsibility, which is driving up the national debt at a record rate. The illegal auto bailouts are another. They waste billions to keep unskilled auto workers enjoying wages and benefits that are much better than those enjoyed by the average American (while ripping off pension funds and bondholders).

The stimulus package has directly destroyed tens of thousands of jobs. A provision in the stimulus package that violated NAFTA by blocking a mere 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. A costly trade war with Canada is also brewing.

Obama’s policies echo those of Herbert Hoover, who helped spawn the Great Depression through his protectionism and tax increases. One of Obama’s own advisers admits that “the barrage of tax increases proposed in President Barack Obama’s budget could, if enacted by Congress, kill any chance of an early and sustained recovery.”

Stimulus Package Shrinks Economy, Destroys Private Sector Jobs

by Hans Bader on May 31, 2009 · 2 comments

in Bailout Watch, Economy, Employment, International, Labor, Odds & Ends, Politics as Usual, Precaution & Risk, Stimulus to Nowhere, Trade

Most of the $800 billion stimulus package has yet to be spent, but it’s already harming the economy, both by triggering trade wars that have cost at least 40,000 jobs, and by driving up interest rates for businesses that need to borrow money to expand or create jobs. (The government is keeping down interest rates on its own debt by printing vast sums of money to buy its own bonds, in order to finance the exploding national debt, which will result in massively higher taxes).

As economist Arnold Kling explains, “most of the stimulus spending does not take place until next year and beyond, so the short-run gains are puny. On the other hand, the big increase in the projected deficit creates the expectation of higher interest rates, which raises interest rates now. These higher interest rates serve to weaken the economy. According to this standard analysis, the stimulus is going to hurt GDP now, when we could use the most help. Much of the spending will kick in a year or more from now,” when the economy will already be in recovery, and “when the economy will need little, if any, stimulus. This is the flaw with using spending rather than tax cuts as a stimulus. The lags are longer when you use spending. Of course, if the real goal is to promote government at the expense of civil society” through “political favoritism, then the stimulus is working exactly as intended.”

1.2 million Americans have lost their jobs since Obama signed the stimulus package into law. The Congressional Budget Office predicted it would shrink the economy “in the long run” (contrary to Obama’s claim that it would prevent “irreversible decline“), 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, “states hit hardest by the recession are getting the least amount of stimulus spending.”

The stimulus package is just one example of the Obama Administration running up the national debt to bail out the more fortunate while sticking less fortunate people with the bill. The auto bailouts are another. They run up the national debt to keep unskilled auto workers enjoying wages and benefits that are much better than those enjoyed by the average American (while ripping off pension funds and bondholders). As Mickey Kaus notes, “Why should the government tax unskilled workers making $18 an hour, who haven’t bankrupted their employers, in order to protect unskilled workers making $28 an hour, and who have bankrupted their employers, from having to take a pay cut?” (Actually, the Chrysler autoworkers are making far more than $28 an hour, when you factor in benefits).

The stimulus package has directly destroyed tens of thousands of jobs. A provision in the stimulus package that blocked a mere 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. And its vague “buy American” provisions, despite doing little to promote purchases of U.S. products, managed to ignite a trade war with Canada.

Obama’s policies echo those of Herbert Hoover, who helped spawn the Great Depression through his protectionism and tax increases. One of Obama’s own advisers admits that “the barrage of tax increases proposed in President Barack Obama’s budget could, if enacted by Congress, kill any chance of an early and sustained recovery.” Even the Washington Post, which endorsed Obama and once supported his auto bailouts, now has soured on them and their waste of taxpayer money.

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