A Stimulus Success Story (Note: Happy Ending not guaranteed)
So the Stimulus has been an “undeniable” success apparently. When I heard that claim I immediately laughed, it was a joke right? I checked the date, way too early for April 1st, but you never know right? But apparently it’s not a joke, and that realization made me laugh even harder then when I thought it was. I then recited my new slogan, “I can’t wait for November,” to myself. And while my birthday is in November, and one of my favorite holidays, election day is what I’m truly looking forward to this year.
As we all know, without this $787 billion stimulus (which in actuality has topped $800 billion in costs) we will see 8% unemployment. Oh wait, we’ve peaked 10, and are currently at 9.7%. So how has this helped? Oh yeah, but it has saved 2 million jobs. Saved of course being the key word and very hard to disprove, since it is hard to gauge what our nation’s economic situation would be like without the stimulus. And that 2 million mark is definitely debatable, but for the purposes of giving the Obama administration the benefit of the doubt I will accept and use the figure for my own calculations.
Ok, let’s do some math now:
($787 billion / 2 million (jobs)) = $393,500 per job.
Most of these jobs are salaries between $40,000 and $60,000 a year. So, we are spending 8x (on average) of what these jobs are worth to “save” them. All of these “saved” jobs are government jobs, and massive government spending programs are the only thing keeping them going. Evan Bayh (D-Indiana) himself said “[I]f I could create one job in the private sector by helping to grow a business, that would be one more than Congress has created in the last six months.” I agree whole-heartedly with Senator Bayh. Congress has not created jobs, they have only “saved” public sector positions, many of them wasteful and useless.
This money could have been better spent in a million other ways, I will highlight upon a few ways which would certainly create more economic and job growth. We could pay 3.28 million unemployed people $50,000/year (for 4 years) and send them to college during this time for an undergraduate. In addition to promoting long term growth, this would sponsor short term job growth at colleges. Additional staff would be needed for a large new influx of students.
Or…
There are around 8-10 million people who have lost their jobs between 2007 and now. This stimulus could have sent each of those people a check for $78,700 which could be used to send them back to school, or to pay bills, or whatever. This is not something I would actually support, but this just shows that the idea of spending $787 billion to save 2 million jobs is absurd. The stimulus is clearly a failure, and all remaining unspent money should be used to pay off our nation’s debt, or returned to small businesses and taxpayers in the form of tax credits.
Cutting $787 billion in taxes on small businesses nationwide would have a tremendously positive effect on job growth. I would bet that at least 5-6 million jobs would be created within the first 2 years. But instead we have pissed away this borrowed and printed money, and mortgaged the future of America for a “stimulus” plan that has failed in its promise and failed in every sense of the word.
But hey, if we hadn’t passed this, we would have hit 8% unemployment. Imagine that.
-Nick
As we all know, without this $787 billion stimulus (which in actuality has topped $800 billion in costs) we will see 8% unemployment. Oh wait, we’ve peaked 10, and are currently at 9.7%. So how has this helped? Oh yeah, but it has saved 2 million jobs. Saved of course being the key word and very hard to disprove, since it is hard to gauge what our nation’s economic situation would be like without the stimulus. And that 2 million mark is definitely debatable, but for the purposes of giving the Obama administration the benefit of the doubt I will accept and use the figure for my own calculations.
Ok, let’s do some math now:
($787 billion / 2 million (jobs)) = $393,500 per job.
Most of these jobs are salaries between $40,000 and $60,000 a year. So, we are spending 8x (on average) of what these jobs are worth to “save” them. All of these “saved” jobs are government jobs, and massive government spending programs are the only thing keeping them going. Evan Bayh (D-Indiana) himself said “[I]f I could create one job in the private sector by helping to grow a business, that would be one more than Congress has created in the last six months.” I agree whole-heartedly with Senator Bayh. Congress has not created jobs, they have only “saved” public sector positions, many of them wasteful and useless.
This money could have been better spent in a million other ways, I will highlight upon a few ways which would certainly create more economic and job growth. We could pay 3.28 million unemployed people $50,000/year (for 4 years) and send them to college during this time for an undergraduate. In addition to promoting long term growth, this would sponsor short term job growth at colleges. Additional staff would be needed for a large new influx of students.
Or…
There are around 8-10 million people who have lost their jobs between 2007 and now. This stimulus could have sent each of those people a check for $78,700 which could be used to send them back to school, or to pay bills, or whatever. This is not something I would actually support, but this just shows that the idea of spending $787 billion to save 2 million jobs is absurd. The stimulus is clearly a failure, and all remaining unspent money should be used to pay off our nation’s debt, or returned to small businesses and taxpayers in the form of tax credits.
Cutting $787 billion in taxes on small businesses nationwide would have a tremendously positive effect on job growth. I would bet that at least 5-6 million jobs would be created within the first 2 years. But instead we have pissed away this borrowed and printed money, and mortgaged the future of America for a “stimulus” plan that has failed in its promise and failed in every sense of the word.
But hey, if we hadn’t passed this, we would have hit 8% unemployment. Imagine that.
-Nick
Labels: economy, stimulus, unemployment
posted by Nick at
2/17/2010 09:39:00 PM
14 Comments:
You are so smart Nick. You should be president! At least you have a valid birth Certificate.
The majority of the stimulus plan has not actually been released into the economy. The passing act was not a quick fix; it is a plan, with long-term intentions as well as short term. http://www.recovery.gov/Pages/home.aspx is quite useful if you want to do further research. You may also find this http://www.nytimes.com/interactive/2010/02/01/us/budget.html of interest.
According to our beloved President, the stimulus was needed as a "quick jolt" to the economy. Without it we would have apparently hit 8% unemployment.
Clearly the idea of rushing the stimulus through Congress was pointless, since we still have not spent most of it. In fact several top economic advisers for the President said that we have seen the entire effect of it already. The rest of the spending to come is just wasteful pork barrel.
It is mostly made up of long term stuff because the "stimulus" is about restructuring our economy to the vision of these socialists and statists.
well i give you props. this is good. and it angers me. because im a liberal. and ill stand by the stimulus plan.
The stimulus package is an attempt to make a shift of the United States economy towards socialist ideals.
It has taken money from our futures. Our income that has yet to be earned has been "borrowed" by the government. Where is that money? Nothing has quite been achieved. It is a long term process to improve an economy, but this system only cancels itself out. More money now, but what happens when we don't have the cash flow in 10 years?
Now we've increased how much national debt we can have? Yes! Let's spend more non-existent money to lean our country towards socialism!
And unemployment isn't a problem. Why would a person who is generally lazy keep a job if they could receive a check for claiming to look for work but actually sit a home and live an effortless life. Free handouts is what encourages unemployment. We don't need to pour money, excuse me, MY MONEY into the system to give free rides to people.
This comment has been removed by the author.
This is so simply stated...it's straightforward, and uses common sense...two things that seem to be lacking under the current administration. This plan seems to be digging us deeper and deeper into trouble.
I think the calculations say it all...paying absurd amounts to save jobs that aren't even worth half that amount, as you said, could have been used much more effectively.
It's impressive that an 18 year old college student is able to do these calculations...makes me wonder what the financial advisers are up to...
I think they need some people with common sense like yours to run the country.
<3
wow that was so well said! Nobody could have said that better themselves. you make really good points.
Dear Sir:
Your argument is an epic fail. And simply doing simple math for an immensely complex issue--and basically declaring that you've got a better sense of it all--is actually quite arrogant and foolish of you.
"This money could have been better spent in a million other ways"
You fail to even come up with a better solution, and the ones you do provide are crap.
You cannot ship people off to college and assume that A) people actually want to go back to college (because some people, if you don't know, are simply not cut out for it) B) people will actually stay and graduate and C) people won't just take the money to pay for their bills, food, etc. D) and whatever else may have you. And trying to load an education onto people does not mean that once they graduate there will be guaranteed jobs; it will simply create more competition and make a college degree less and less valuable.
"In addition to promoting long term growth, this would sponsor short term job growth at colleges. Additional staff would be needed for a large new influx of students."
Again, not true. How on earth is shoving more people into college going to create more "short term" jobs within it? Sure, you'll need more people to make and serve food, mop the floors, etc. etc. but this increase is so insignificant it's hardly even worth mentioning. True, you will need more teachers, but not much; and besides, you can simply just increase the number of students per class.
"This stimulus could have sent each of those people a check for $78,700 which could be used to send them back to school, or to pay bills, or whatever. This is not something I would actually support, but this just shows that the idea of spending $787 billion to save 2 million jobs is absurd."
Seriously, that makes no sense whatsoever. You fail to point out how "the idea" is "absurd." Also, do you actually have any idea of what the stimulus plan is about and what's in it? They're not spending $787 billion to save just 2 million jobs.
Why don't you actually do some research before basically claiming you have more "common sense" than others?
"But instead we have pissed away this borrowed and printed money, and mortgaged the future of America for a “stimulus” plan that has failed in its promise and failed in every sense of the word."
And you declare this because some source said there was some "success"? (By the way, where on earth did you get this from? Please enlighten me on where it was declared there was "undeniable” success; and have you actually ever written a paper before? are you honestly in college? you simply can't quote something and not show where you borrowed it from.)
Overall, the only person who appears to show a lack of common sense is you. Thomas Paine, I'm sure, is rolling in his grave.
--Anonymous
(And whoever wrote, "It's impressive that an 18 year old college student is able to do these calculations" makes me want to weep.)
It is not a very complex issue. It is an issue that just requires common sense. Economic growth is stimulated by people and businesses spending money. People and businesses will have more money to spend if they were taxed less.
"Cutting $787 billion in taxes on small businesses nationwide would have a tremendously positive effect on job growth. I would bet that at least 5-6 million jobs would be created within the first 2 years."
There it is, as I wrote before... a much, much better, and much, much simpler way to spend $787 billion. Go read about trickle down economics, and do some research on it. You will find the massive positive effects it has on economies. Sometimes just watching MSNBC does not get you all the facts.
As for the stimulus being absurd, the fact that almost $400,000 are spent per job "saved" is absurd. Need I say more?
Press Secretary Gibbs is the one who said the stimulus was an "undeniable" success.
Source: http://www.foxnews.com/politics/2010/02/17/romer-suggests-best-stimulus-come-predicting-little-growth/
Do a little thinking on your own. Stop letting a few elitist liberals in Washington tell you what is right and wrong. I am in no way insinuating that I am an economic genius or that I have all the answers. But clearly the guys in Washington are either economically retarded, or they do not care that their failed policies are pushing this country further and further into long term deficits with little to no short term gain.
If you have some more arguments to make after your Socialist Party USA meeting then please do not hesitate to let me know.
-Nick
"It is not a very complex issue. It is an issue that just requires common sense."
Doing simple math does not negate the fact that is is a complex issue. If it required the application of common sense, I highly doubt the recession would have occurred to begin with.
My response to your little blog post was an attempt to deconstruct your reasonings and point out how they are, indeed, flawed. It had--and still has--nothing to do with politics itself. If you haven't noticed, I did NOT respond to your party affiliations and mock them.
I don't believe much in political parties, and therefore find it vastly amusing that you would assume I watch MSNBC: "Sometimes just watching MSNBC does not get you all the facts."
And sometimes assuming things about people and their party is the petty way to respond. (And by the way, would you suggest that I reply on the lovely FOX News? I know that MSNBC does have its liberal leanings, but I prefer CNN to be quite honest with you.)
I like to quote George Washington whenever political parties come up in discussions: "Let me now take a more comprehensive view, and warn you in the most solemn manner against the baneful effects of the spirit of party."
"People and businesses will have more money to spend if they were taxed less."
Again, please check your facts before making such statements. According to the article "The $800 Billion Deception" by Daniel Gross, "'As of the end of August, $151.4 billion of the original $787 billion has been outlaid or has gone to American taxpayers and businesses in the form of tax reductions,' the CEA reports."
And you must forgive me if I cringe at where, indeed, you procured your information about the "undeniable" success of the stimulus package, even if the person quoted is not affiliated with the network.
"Go read about trickle down economics, and do some research on it. You will find the massive positive effects it has on economies."
As you don't know, it obviously didn't work for Bush. What makes you think that practicing a policy that has obviously failed for the previous president is going to magically work now?
But I believe it is you who needs to brush up your knowledge of trickle down economics. You said that people need tax cuts, but trickle down normally refers to giving tax breaks to the wealthy, as the idea is that the wealth will then trickle down slowly but surely and effect the middle and lower classes.
...
...
"There it is, as I wrote before...a much, much better, and much, much simpler way to spend $787 billion."
And I thought I made it plainly clear in my previous response that you failed to provide a "much, much simpler way" to spend the money. The scenarios you provided are flawed and not realistic.
"As for the stimulus being absurd, the fact that almost $400,000 are spend per job 'saved' is absurd."
Again, there is no "fact" that that much money is being spent per job, or that that's what it's being spent on. You've ignored me once, so I shall repeat myself: the $787 billion they plan to spend is not going to be invested just to save jobs.
"Do a little thinking on your own. Stop letting a few elitist liberals in Washington tell you what is right and wrong."
Again, my response was a response to your blog post and was not at all influenced by "a few elitist liberals." I rejected your proposed solutions by evaluating them and telling you why I believe they are crap.
"But clearly the guys in Washington are either economically retarded, or they do not care that their failed policies are pushing this country further and further into long term deficits with little to no short term gain."
Perhaps you should stop letting FOX News and a few Republicans influence your response?
(From the source I mentioned earlier): "Until then, we should avoid jumping to rash conclusions."
"Need I say more?"
Please, there is no more to say since you fail to consider my response as a deconstruction of your argument, not as an attack on you or your political party.
There is also no need to insinuate that I attend a "Socialist Party USA meeting"; and honestly, labeling a random person on the Internet as a socialist simply makes you look as ridiculous as all of those who started pointing the finger and crying "Socialist!" did to distort and mislead during the last election.
--Anonymous
"As you don't know, it obviously didn't work for Bush. What makes you think that practicing a policy that has obviously failed for the previous president is going to magically work now?"
Trickle down economics did not work for Bush because we had out of control spending. Two wars in addition to out of control domestic spending did not work out well. Clearly though, out of control spending did not work well under Bush and only fueled the deficit. Yet, our new President and current Congress has taken out of control spending to another level. If it did not work for the last President, why would it magically work now?
The highly dubious claim that $151.4 billion went to tax reductions does not disprove or deconstruct my claim that "People and businesses will have more money to spend if they were taxed less."
You cringe at my source, I cringe at yours. You insist that the stimulus was not really aimed to save jobs, "You've ignored me once, so I shall repeat myself: the $787 billion they plan to spend is not going to be invested just to save jobs." Yet, the article that you yourself cite makes reference to the stimulus' aim to "save" jobs.
"Some things about the stimulus are indeed complicated. How precisely do you measure the number of jobs "saved" when the federal government cuts checks to states, thus allowing them to avoid budget cuts?" (Daniel Gross).
Obama himself declared that the stimulus was needed as a "quick jolt" to the economy, or we would hit 8% unemployment. That statement in itself shows that at the very least, a huge focus, if not the entire focus of the stimulus was to "save" and/or create jobs. The fact that so much of this money has yet to be spent defies the idea that it was needed as a quick jolt.
One of the Obama administration's economic advisers declared in October of 2009 that we had already seen the economic growth that the stimulus would bring. Here is my source:
http://blogs.abcnews.com/george/2009/10/obama-economic-adviser-the-stimulus-impact-on-economic-growth-has-past.html
You find my proposals to be unrealistic and "crap" and I find the one passed to be ridiculous. This is clearly a matter of personal opinion, and something we can debate all day.
The fact is, the stimulus was passed under the pretense that it would immediately help the economy, and that it would keep the unemployment rate from rising above 8%. It did not do this, and so it should not be considered a success. Think whatever you like about my "crap" proposals, but ultimately you should care much more about the policies of those in office.
During the election people on the right called people socialists, and people on the left called people racists. Take a guess which claims were more misleading and distorted.
I'm sorry you feel my proposals are crap, but that is certainly just a matter of opinion. I'd like to hear your arguments supporting the stimulus that has been passed already, since you clearly disagree with my assessment of it.
-Nick
“Trickle down economics did not work for Bush because we had out of control spending.”
If there is so much “out of control spending,” more than during Bush’s presidency, why suggest an economic policy that doesn’t work during any period of excessive spending?
“Yet, our new President and current Congress has taken out of control spending to another level. If it did not work for the last President, why would it magically work now? “
Because the spending is being applied to our problems now rather than elsewhere?
“You cringe at my source, I cringe at yours. You insist that the stimulus was not really aimed to save jobs...”
Again, you failed to read what I wrote properly: the stimulus plan is a whole multitude of various responses and attempts to help to economy, including job recovery. Even if it’s more heavily focused on, saving jobs is only one portion of all of it. Nevertheless, you cannot simply suggest only fixing one portion of all of the problems our country faces.
“During the election people on the right called people socialists, and people on the left called people racists. Take a guess which claims were more misleading and distorted.”
If you don’t agree with the notion that some Democrats called some Republicans racist, then why are you stooping to that level and insinuating I was a Socialist? Besides, both claims are equally ridiculous, stupid, and petty.
“I'd like to hear your arguments supporting the stimulus that has been passed already, since you clearly disagree with my assessment of it.”
You may call me deluded and stupid, but I’d prefer to wait and assess how well the stimulus plan works out before forming a complete judgement on it (which is not to say that I don’t have an opinion on it already).
Overall, I don’t care if you agree or not with anything I’ve written, and I don’t care if you get the last word. You made a poor presentation of your argument and how $787 billion could be spent and I found it to be ridiculous. So if you’re going to post your thoughts and “personal opinion” on the Internet, people, including me, are going to respond. You really can’t fall back on the ‘if you don’t like it, don’t read it. It’s my opinion.’
Nevertheless, I have things to do that don’t include this. I assure you I won’t be replying or reading your blog again. Have a nice life.
--Anonymous
Post a Comment
Subscribe to Post Comments [Atom]
<< Home