The IUSB Vision Weblog

The way to crush the middle class is to grind them between the millstones of taxation and inflation. – Vladimir Lenin

How is that Stimulus Working Out for You?

Posted by iusbvision on November 24, 2009

As we stated from the very beginning.  The stimulus was a leftist slush fund that is a boon to government and special interest groups. It was not intended to create jobs which was obvious from the content of the stimulus. Dr. Schiller told them so when they asked him so they can’t claim ignorance (per his lecture at IUSB).

Remember when Obama said that if the stimulus plan wasn’t passed right away unemployment would reach 8.5%. Well now it is 10,2% and when you figure in those who have just given up looking for work it is 17.5% (LINK). This means that almost 1 in 5 members of the workforce are unemployed.

Nice graphic from Mike Pence. The editorializing in the graphic really wasn’t necessary as the numbers speak for themselves.

The second graphic is from “Innocent Bystanders” which has some other stats and graphics from previous months.

Why is unemployment up?

It can be summed up in two words, “no confidence”. NO confidence that those who invest in hiring new people, expanding business or production or making capital investments will lead to a fair return on their investment.

When Obama decided to break the law and go after the bond holders who held those GM bonds in favor of his union friends, who would buy loan bonds in the United States? It has always been the rules that bond holders get paid first even if a company goes out of business. Obama stated that he wants to nearly double the capital gains tax which serves only one purpose, to punish investors by taking their return. One would have to be crazy to invest in bonds or much else under such circumstances. In China the capital gains tax rate is ZERO.

With the administration deliberately trying to make energy (cap & trade energy tax) and health care more expensive who would would to build factories here? Who would want to hire?

With the Federal Reserve printing up money like crazy, setting the benchmark lending rate to zero, the Treasury not acting to protect the value of the dollar and the Democrats quadrupling deficit spending and considering a new bill to force banks to once again make home loans to people regardless of income; who would invest in American financial institutions? Who would wan’t anything to do with the dollar?

No one with a brain could expect anything but greater unemployment and more jobs and wealth going to China under such an environment.

Deficits Rise

When wealth and jobs are chased out of the country that is economic activity that cannot be taxed. This raises deficits.

In the last budget that Republicans had control (2007) the deficit for the YEAR was $211 billion. The deficit for the MONTH of October was $176.36 Billion.

Wall Street Journal:

The federal government kicked off fiscal year 2010 by posting its widest-ever October budget deficit, the Treasury Department said Thursday.

The $176.36 billion gap is more than $20 billion wider than the shortfall recorded in October 2008, driven up by lower tax receipts, stimulus-related revenue reductions and consistently high government outlays.

The 50 Job Lawn Mower

New York Times:

In June, the federal government spent $1,047 in stimulus money to buy a rider mower from the Toro Company to cut the grass at the Fayetteville National Cemetery in Arkansas. Now, a report on the government’s stimulus Web site improbably claims that that single lawn mower sale helped save or create 50 jobs.

Earlier that same month, when Chrysler got a $52.9 million stimulus order for new cars for the government, the struggling automaker claimed that the money did not save a single job.

Those two extremes illustrate the difficulties in trying to figure out just how many jobs can be attributed to the $787 billion stimulus program. Last week the Obama administration released reports from more than 130,000 recipients of stimulus money in which they claimed to have saved or created more than 640,000 jobs, but a review of those reports shows that some are simply wrong, while others contain apparently subjective estimates.

That is a pretty tough indictment considering that the New York Times has been in the tank for the Obama Administration. Ed Morrissey at Hotair.com has more commentary on this part of the story.

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