Can you tell which stimulus program is fake or real?

Unbelievable.

Rainbows and Unicorns

The porkulus bill created three million jobs? BWAHAHAHAHAHAHA!!

It's time for another sales job!

The stimulus has not made much of a dent to private sector job creation, so Mr. Obama is on a propaganda tour to sell it to likely voters in the upcoming November elections. Isn't it interesting that a good chunk of the porkulus will get spent before mid-term elections?

Enjoy the decline!

I'm sorry, but this is still a waste...

According to this story on CNN, this one stimulus program is popular with Republicans because it puts people back to work:

There's at least one stimulus program that's creating jobs and winning praise from both sides of the political aisle.

A little-known Recovery Act initiative is expected to put more than 200,000 unemployed people back to work in 32 states and the District of Columbia. It's called the Temporary Assistance for Needy Families Emergency Fund, and it subsidizes jobs with private companies, nonprofits and government agencies.

But the $5 billion it receives runs out on Sept. 30, even though employers and state officials administering the money say there's lots more demand out there...

The "program will provide much-needed aid during this recession by enabling businesses to hire new workers, thus enhancing the economic engines of our local communities," Barbour said when the initiative launched last year.

While this program sounds promising at first, it essentially subsidizes hiring until taxpayer funds run out. Does that sound like an efficient way to run an economy? This is a perfect example of how people are fooled by short-term results while the long term ramifications are not even explored. CNN thinks this program is putting people back to work but this program is taking funds out of the private economy and having it redistributed by federal bureaucracy. How efficient is that?

Small businesses not hiring

More evidence that the "stimulus" has done nothing for small businesses and that matters will only get worse:

A payroll services firm says employers with no more than 19 workers made fewer hires in July than in any month since October. Those companies usually drive the unemployment rate down.

For the recovery to gain steam, most economists believe small businesses need to be strong enough to hire new workers. But according to one measure, the employment picture in this sector is weakening.

Intuit Inc., which provides payroll services for small employers, says the nation's tiniest companies had fewer new hires last month than any time since October.

The data are further evidence of a trend that has had many economists worried for months and intensifies concerns that smaller firms may not be robust enough to help lead the country out of its financial slump. The slowdown in hiring is particularly troublesome, experts say, because small businesses typically hire first during a recovery. A reluctance by little companies to add positions could mean that the big firms, which typically lag behind, will add jobs even more gradually.

"It's a bad sign," said Susan Woodward, an economist who tracks small business employment for Intuit. "Small businesses hire first — and they're losing their steam."

Does anybody believe that tax hikes next year will help small businesses?

Prescient words from Uncle Milton Friedman

From chapter five of Milton Friedman’s “Capitalism and Freedom” which was originally published in 1962:

Each recession, however minor, sends a shudder through politically sensitive legislators and administrators with their ever present fear that perhaps it is the harbinger of another 1929-33. They hasten to enact federal spending programs of one kind or another. Many of the programs do not in fact come into effect until after the recession has passed…The haste with which spending programs are approved is not matched by an equal haste to repeal them or to eliminate others when the recession is passed and expansion is under way. On the contrary, it is then argued that a “healthy” expansion must not be “jeopardized” by cuts in governmental expenditures. The chief harm done…is therefore not that it has failed to offset recessions, which it has, and not that it has introduced an inflationary bias into governmental policy, which it has done too, but that it has continuously fostered an expansion in the range of governmental activities at the federal level and prevented a reduction in the burden of federal taxes.

Does any of the above sound familiar? All I read from liberal blogs and Paul Krugman these days is how it would be a bad idea to stop “priming the pump,” cutting government stimulus and spending. To be sure, we can see from the above quote from Mr. Friedman, that this is not a new strategy and it most certainly is not one that has favorable long term results. Anybody want to bet that it will all turn out differently this time?

Enjoy the decline!

This is a sobering projection but it is right on target with what I have been saying so far about the "stimulus" package:

Deep cutbacks by state governments such as California have all but obliterated the effect of the nearly $800 billion federal stimulus enacted last year, she said at a luncheon sponsored by the center-left New America Foundation.

Tyson said the current "jobs gap" between the number of jobs the economy is producing and full employment is about 11 million. Even if job growth surged to 350,000 a month, it would take four years to get the unemployment rate to where it was before the recession began in December 2007, she said.

If job growth is at a more modest 200,000 a month, it would take 11 years.

"When you look at the forecasts, you've got to go to 2015 before unemployment falls back to the 5 percent to 6 percent range" where it was before the recession began, Tyson said. The slowdown in Europe, a key destination for U.S. exports, makes things worse, she added.

Administration officials have indicated that Tyson is under close consideration to replace Office of Management and Budget Director Peter Orsag, who announced his departure Monday.

With the current economic policy that this administration is advocating, I simply don't see matters getting better any time soon. More federal spending, more short-term tax credits aimed at some industry to boost demand, and more threats of regulation and higher taxes will not spur the economy to a strong expansion.

The Big Payoff and the Big Comedown

This portion from Mortimer Zuckerman's article in the WSJ
needs some attention:

It is not an accident that in framing the national stimulus program in 2009 Congress directed a stunning $275 billion of the $787 billion as grants to the states to support public-service employees in health care, education, etc.

So now that stimulus funds have dried up, I guess states are going to have to do what they were able to push off with stimulus funds--make some deep cuts to state spending. The public sector workers and their unions got a sweet deal from Obama. Now it's time to sober up.

Another "Stimulus" failure

Now that stimulus funds are drying up, states are going to have to do what they should have done over a year ago--tighten their belts, come clean with residents. They were able to "kick the can down the road" waiting for a better tomorrow that hasn't come. Now the pain will be more severe.

This is one of the reasons why I was against the "stimulus" package. It was obvious to me that state politicians would much rather take the easy way out of not doing the unpopular task of cutting public services but accepting a federal crutch to buy time out of a financial disaster. The incentive to do the wrong thing was simply too juicy to pass up.

Cash for dishwashers!

From SFGate:

The federal government is giving away $35.2 million to Californians who are buying energy-efficient appliances, but consumers will have to act fast to get the mail-in rebates provided by the latest federal stimulus program.

Rebates will be distributed through the "cash for appliances" program beginning Thursday — Earth Day — to boost the economy and cut energy use in the nation's most populous state.

Hundreds of thousands of people are expected to buy energy-efficient appliances, recycle their old ones and take advantage of the program's three rebates: $200 for refrigerators, $100 for clothes washers and $50 for room air conditioners.

The federal program was created last year, but each state is distributing the money according to its own rules. In California, the Energy Commission is administering the rebates.

Here we go again. They are transferring wealth from one group of taxpayers to another group--One group doesn't need to buy anything but they still have to chip in for the group that was going to buy anyway. Absurd. Well, at least appliance makers and suppliers make a killing, right? Of course, our government doesn't have the cash to fund this program so it has to do some borrowing by selling government bonds, and therefore pay interest to bondholders, to "give away" these rebates. Ladies and gents, your tax dollars at work.

It is time to sober up

Aside from not trusting administration officials on their estimates, the big question that should be on everyone's mind is what happens when the stimulus funds are withdrawn? Eventually they will. What happens then? We will be left with a massive fiscal hangover, I bet.

One thing is for certain: The first jobs tally, which showed 640,000 jobs were created, contained numerous errors. After that October report, the administration changed the criteria for counting stimulus-funded jobs. The goal was to make it simpler for recipients to accurately report headcounts.

Recipients no longer have to determine whether a job was "created" or "saved" by stimulus funds, only that it was "funded" by the Recovery Act. Also, the reports only track jobs on a quarterly basis instead of keeping a running total.

Even with these changes, it's still a challenge to determine exactly how many jobs stimulus has funded, experts said. It will come as no surprise if more mistakes are found.

Also, the little piggies that are benefiting from feeding at the public trough are going to squeal once it comes time to wean:

Gov. Deval Patrick, a Democrat, touted stimulus' impact on the alternative energy sector, saying the state will increase wind power 10-fold and solar power 15-fold by next year. The number of solar companies has quadrupled and their employment doubled.

Stimulus II: A Sequel America Can't Afford

Dan Mitchell with another great video. Is stimulus #2 on it's way?

Jobs "saved or created" map

The Washington Examiner has an updated bogus jobs "created or saved" map. Let's face it, folks. The stimulus has been a big fat failure.

TARP Is Ripe For Fraud

Now don't you all worry your pretty little heads about government bailouts or "stimulus" packages because you should feel that your tax dollars are going to be spent efficiently and wisely. Afterall, if you can't trust the government who will you trust? (Snicker, snicker.)

The U.S. government's rescue of the financial system is vulnerable to fraud that could potentially cost taxpayers tens of billions of dollars, government watchdogs warned lawmakers Tuesday.

Neil Barofsky, the special inspector general for the $700 billion Troubled Asset Relief Program, told a House subcommittee that the government's experiences in the reconstruction of Iraq, hurricane-relief programs and the 1990s savings-and-loan bailout suggest the rescue program could be ripe for fraud.

He also said fewer than 5% of banks receiving government aid have responded to a request about what they have done with their bailout money.

The comments come as the Obama administration prepares to pour more money into the financial sector. Federal banking regulators begin a series of "stress tests" at the largest U.S. banks this week to determine whether they need greater infusions of government funds to survive a worse economic downturn.

Better than a fake stimulus...

Where your money will end up

The WSJ has a neat and simple graph. Look carefully at the tax cuts and what the biggest portion is aimed at. Do you remember the Economic Stimulus Act of 2008 and how it flopped?

We could all use less Keynes and more Hayek

Dick Armey writes in the WSJ:


It's clear why Keynes's popularity endures in Congress. Intellectual cover for a spending spree will always be appreciated there. But it's harder to see any justification for the perverse form of fiscal child abuse that heaps massive debts on future generations...

Of course, despite Mr. Obama's campaign promises to adhere to "Pay As You Go" budgeting, no one seems terribly worried about paying for what will likely be a trillion-dollar stimulus package. What everyone should agree on is that the money has to come from somewhere, either through higher taxes, borrowing or printing...

If the government borrows the money for the stimulus, then it will either have to print money later or raise taxes to pay it back. If the government raises taxes to pay for the stimulus, it will, in effect, be robbing Peter to pay Paul. If the government prints the money, it will increase inflation, which will decrease the value of the dollar. That would, in effect, rob Paul to pay Paul back with devalued currency...

Taking money out of the private economy -- either through taxes or inflation -- and spending it in a way that doesn't offset the loss of money with real economic gains is worse than doing nothing...

There is no way around it; this stimulus bomb is going to create inflation like nobody's business and it will do little to move the economy forward.

The People's Stimulus: Get Your Money Back

Here's a good idea for economic stimulus.

HT: Cafe Hayek

Best comment on the Stimulus Package

From a commenter on SF gate.com:

"Yay, now we don't have to hear anymore complaining. Everyone is going to get theirs. I am going to get $500.00, wow, and my grandaughter gets to pay for it all. I'm not worried, she'll get a really good job holding a flag for the road workers. Oh thank you Messiah, you're just too good for us little people."

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