Carol's Confession
Now that the American Recovery and Reinvestment Act (ARRA), more popularly known as the “Stimulus Bill,” is six months old, we can begin to assess what results have been achieved by playing another $787 billion on the United States’ credit card. The answer appears to be little to nothing. Unemployment is officially up to 10.2% while the real number, which includes those who have temporarily given up looking or who are only working part time, is now at 17.5%. We are rapidly approaching depression level statistics.
The “Stimulus Bill” has been such a failure that its proponents, including Carol Shea Porter, have invented a new and completely unverifiable metric for measuring its success - jobs saved. This snake oil is being sold to the voters of New Hampshire and across the nation because there is little to no evidence that the Stimulus Bill has led to any meaningful job growth.
When it was passed, New Hampshire voters were told by Congresswoman Shea Porter that it would create 16.700 to 22,800 jobs. Yet even the most generous metrics show only 3,000 jobs have been created or “saved” by the $407 million in stimulus funds which were distributed to New Hampshire. That is $136,000 per job! It is most interesting to watch her back off of her own defense of the bill she said she was most proud to have signed, admitting that the spending is not working.
Similar failures of the Stimulus Bill to generate meaningful job growth have begun pouring in across the country. It is important to understand why the Democratic Congress’ $787 billion dollar spending spree has been a failure so that we may avoid such folly again.
There is no question that government spending generates short-term economic growth. Indeed government expenditures are a direct component of that economic measure. What government spending cannot do, however, is create permanent jobs or generate long term economic growth unless funds are spent wisely, which in the case of the Stimulus Bill did not happen.
The traditional form of government stimulus spending is to build new infrastructure. The construction of new roads, schools and bridges (assuming they lead somewhere useful) not only creates jobs in the short term, but leaves a tangible contribution to the nation’s capital stock, yielding useful and tangible benefits to those who use the new infrastructure and creating the potential for future jobs in maintaining such infrastructure. Yet less than 16% of the Stimulus Bill was dedicated to such infrastructure creation. What then is this money being spent on?
For the most part, stimulus funds were distributed as grants to state governments and their various agencies. It is claimed that such funds have prevented New Hampshire from laying off government workers and thus to have “saved” jobs. But such spending does the state no long term good. At the end of the year there will be no ongoing benefit from having spent such funds and their disappearance begs the question of what will happen to these workers when the money runs out?
While the lack of benefits from the Stimulus Bill is easy to see, the costs it will impose are not. The $787 billion addition to our national debt will make it increasingly difficult to service that debt and force our government to make some very unpleasant choices. With our debt burden rapidly approaching levels for which in the past we have chastised developing countries the US government will be forced to a) raise taxes dramatically; b) make vast and indiscriminate cuts in all government services; and/or c) print money, destroying the value of the U.S. dollar and unleashing the type of inflation we experienced in the 1970’s. And for those who believe that we have seen the worst of declines in real estate markets, just imagine the effect of 15-20% mortgage rates – something we have not seen since the 1970s and the Carter Administration.
During the last nine years, under both Republican and Democratic control, Congress has adopted a fiscal policy that has been both reckless to irresponsible. As a nation we must rapidly reduce spending to fund only those programs which are a demonstrated success and/or provide a substantial return on our investment. Boondoggles like the Stimulus Bill, sold to us by Congressmen Shea Porter must be stopped before we trigger a financial and economic crisis which will dwarf what was experienced in the fall of 2008.
I am running for Congress because I believe I have the experience and the courage to make the hard choices and stand up to the entrenched interests which leads to legislation like the Stimulus Bill. As New Hampshire’s representative to New Hampshire I will not succumb to the mutual back-scratching and party loyalty seeking behavior that has turned those like Congresswoman Shea Porter into Washington’s representative to New Hampshire.
The “Stimulus Bill” has been such a failure that its proponents, including Carol Shea Porter, have invented a new and completely unverifiable metric for measuring its success - jobs saved. This snake oil is being sold to the voters of New Hampshire and across the nation because there is little to no evidence that the Stimulus Bill has led to any meaningful job growth.
When it was passed, New Hampshire voters were told by Congresswoman Shea Porter that it would create 16.700 to 22,800 jobs. Yet even the most generous metrics show only 3,000 jobs have been created or “saved” by the $407 million in stimulus funds which were distributed to New Hampshire. That is $136,000 per job! It is most interesting to watch her back off of her own defense of the bill she said she was most proud to have signed, admitting that the spending is not working.
Similar failures of the Stimulus Bill to generate meaningful job growth have begun pouring in across the country. It is important to understand why the Democratic Congress’ $787 billion dollar spending spree has been a failure so that we may avoid such folly again.
There is no question that government spending generates short-term economic growth. Indeed government expenditures are a direct component of that economic measure. What government spending cannot do, however, is create permanent jobs or generate long term economic growth unless funds are spent wisely, which in the case of the Stimulus Bill did not happen.
The traditional form of government stimulus spending is to build new infrastructure. The construction of new roads, schools and bridges (assuming they lead somewhere useful) not only creates jobs in the short term, but leaves a tangible contribution to the nation’s capital stock, yielding useful and tangible benefits to those who use the new infrastructure and creating the potential for future jobs in maintaining such infrastructure. Yet less than 16% of the Stimulus Bill was dedicated to such infrastructure creation. What then is this money being spent on?
For the most part, stimulus funds were distributed as grants to state governments and their various agencies. It is claimed that such funds have prevented New Hampshire from laying off government workers and thus to have “saved” jobs. But such spending does the state no long term good. At the end of the year there will be no ongoing benefit from having spent such funds and their disappearance begs the question of what will happen to these workers when the money runs out?
While the lack of benefits from the Stimulus Bill is easy to see, the costs it will impose are not. The $787 billion addition to our national debt will make it increasingly difficult to service that debt and force our government to make some very unpleasant choices. With our debt burden rapidly approaching levels for which in the past we have chastised developing countries the US government will be forced to a) raise taxes dramatically; b) make vast and indiscriminate cuts in all government services; and/or c) print money, destroying the value of the U.S. dollar and unleashing the type of inflation we experienced in the 1970’s. And for those who believe that we have seen the worst of declines in real estate markets, just imagine the effect of 15-20% mortgage rates – something we have not seen since the 1970s and the Carter Administration.
During the last nine years, under both Republican and Democratic control, Congress has adopted a fiscal policy that has been both reckless to irresponsible. As a nation we must rapidly reduce spending to fund only those programs which are a demonstrated success and/or provide a substantial return on our investment. Boondoggles like the Stimulus Bill, sold to us by Congressmen Shea Porter must be stopped before we trigger a financial and economic crisis which will dwarf what was experienced in the fall of 2008.
I am running for Congress because I believe I have the experience and the courage to make the hard choices and stand up to the entrenched interests which leads to legislation like the Stimulus Bill. As New Hampshire’s representative to New Hampshire I will not succumb to the mutual back-scratching and party loyalty seeking behavior that has turned those like Congresswoman Shea Porter into Washington’s representative to New Hampshire.
Bob Bestani is a candidate for the U.S. Congress in New Hampshire’s 1st Congressional District and is a Visiting Scholar at Stanford University
Comments
Posted by: mer | November 9, 2009 6:15 AM