Simply put, the “stimulus” has failed.
When President Obama signed the $787 billion “stimulus” bill in February, the unemployment rate was 8.1 percent. Today it is 10.2 percent.
So far, the government has spent over $158 billion of those “stimulus” dollars. Since then, there are 3.5 million more people out of work.
The White House reports that as part of the $158 billion in “stimulus spending” to date, over 640,000 jobs have been “created or saved” (putting aside the political-jargon that an economy losing 3.5 million jobs can create or save 640,000). That’s a cost of over $246,000 per job. Worse yet, in Pennsylvania, we have spent an astonishing $613,000 per job!
These figures are not the creation of a partisan blog or ideological think-tank. These figures come directly from the White House, available to the public on recovery.gov, and reported by The Associated Press.
No elected official, leader or candidate for office could possibly be proud of this track record. Our faltering economy, which is hurting millions of families, businesses and communities, is the most important domestic policy challenge of our time. How we handle this challenge will have an enormous impact on future generations. But what should be done?
Our approach must be straight-forward, based on sound, common-sense economics and enacted quickly. Going forward, policy-makers must be mindful of the old doctor’s adage, “Do no harm.”
First, bring the “stimulus” to a close. Working as practically and quickly as possible, the federal government must modify the $787 billion “stimulus.” They should honor all commitments made to date, be they grants or promised tax cuts; preserve the extended unemployment benefits; and stop all future spending and borrowing.
This will put a stop to billions of additional deficit spending.
Second, focus the billions of dollars that would be saved on job-creating tax cuts. Congress should drastically cut the payroll tax for newly created jobs, or offer tax-incentives for genuine job-creation.
Third, do not pass another “stimulus” bill. Only in Congress could leaders think that after a failed $787 billion spending bill should we seek to spend even more “stimulus” money. No small business or household would ever operate that way with their spending.
Lastly, we must stop picking the “winning” or “losing” industry of the moment. This type of economic-patronage does nothing to create lasting jobs and only increases the government’s hand in the marketplace.
This economy is in serious trouble, and the “stimulus” has failed to achieve its goals. Leaders in Congress should admit it, stop the wasteful spending and quickly enact common-sense solutions to revive our economy and restore the American Dream.
Steve, I like your thoughts on the jobs issue and also believe that the stimulus will do far more harm than good. Of greater concern to me is government involvement in our free market system. The US government purchasing controlling interest in GM, Chrysler and numerous big banks is a very scary development and is certain to waste vast sums of tax payer money. Failed industries must be allowed to fail. Our system has always been based on the concept that smart risk taking should be rewarded and bad risk taking punished. When we interfere with this process we are undermining the concepts that made us the wealthiest nation on earth.
The root cause of these failures is failed corporate governance. Boards of Directors can and are bought by CEOs who act as the chairman of their personally selected Board of Directors. They pay these board members exorbitant fees to support them and in many cases get their boards to pay ridiculous salaries and bonuses for extremely poor performance. In essence the shareholder is paying board members who represent the interests of the CEO not the shareholder. The one role government should be playing in our free market system is to insure that free markets are actually functioning. The trust busters at the beginning of the 20th century stop the monopolistic practices of that era. We need corporate governance reform to make sure that good risks are rewarded and bad risk taking is punished. I would like to hear more on this issue in the future.
Steve,
I am in 100% agreement with you about the government needing to stimulate job creation. However, you also need to develop a strategy for the other part of the equation, employees. We need more focus on and a better system of career management. People do not manage their careers and they are not well positioned to take advantage of the emerging trends in the world of work.
People need to get back to work but they need to be prepared to remain attractive for the labor market by anticipating changes in tasks and work environments and reacting to them. This involves identifying and engaging in strategic work decisions and learning opportunities, recognizing work life balance and understanding the relationship between work, the economy and society.
It is the old feed a fish teach to fish maxim. People need to start career management just as they need to do financial management or health management.
Mr. Steve Welch …
As a 60 year old common laborer, low / middle class I still have to work. (I don't mind…) I and many others more so now. We have been living from pay check to pay check; when work has been available. But! This nonsense about the Fed printing more money from nothing is part of the reason why so much is now exponentially more expensive than not a long ago yesteryear. The five & dime store is today’s dollar store. Talk about artificial inflation….! But our weekly paychecks do not keep up. And there’s no argument that China owns our debt. This is most concerning to “us”. The bailouts didn’t really work because of the bailouts. But in spite of it! So many are wearing blinders!
Mr. Welsh….
to continue my grip!
Another concern is this OPIC thing that seduces long standing producers / manufacturers / industry to close doors here; placing millions of then working people to unemployed status. The new products that return from these new producers (somewhere between 2nd & 3rd. worlds) are inferior to what we used to make. Walmart is the prime culprit in this dilemma. Very un-American if you ask me! Wake up people!