Spending More

Democrats are having a heyday with all the tax and spend crap going on. Even though the economy is starting to recover (with less than a quarter of the 'stimulus' being spent, by the way), the Democrats are looking to spend EVEN MORE.

Democrats are considering extending unemployment and health benefits, as well as extending and perhaps expanding a popular tax credit for first-time home buyers and creating a new credit for companies that add jobs.

Extending unemployment benefits through 2010 would cost about $100 billion, according to the liberal Center on Budget and Policy Priorities.

It's unknown exactly how much it would cost to extend subsidies for laid-off workers to help them keep the health insurance their former employers provided, known as COBRA. That's because congressional leaders haven't settled on the length of an extension, or how to pay for it. But the current program, which covers workers laid off through the end of the year, costs nearly $25 billion.

Extending the homebuyer tax credit to next summer would cost about $16.7 billion, economists say. It's not clear how much the employer tax credit would cost. But a similar proposal that was dropped from the first stimulus package had a cost of $19.5 billion.

President Obama also wants Congress to approve $250 payments to more than 50 million seniors to make up for no cost-of-living increase in Social Security next year. The total cost: $14 billion.

Taken together, the proposals could add up to nearly $200 billion, looking a lot like another economic stimulus package.

Just don't call it a stimulus. They hate that.

You can find the original article here.

Stimulus Spending Worsens Unemployment

Give us money, and we’ll give you jobs. That was the promise President Barack Obama made when he asked Congress for a $789 billion stimulus bill back in January. The cash, the administration said, would create millions of jobs over the next two years.

Since April 2009, the administration spent roughly $90 billion, or 18 percent of the total stimulus spending, on top of $62 billion in tax relief. During that time, the unemployment rate grew from 8.9 percent to 9.8 percent. And according to the Bureau of Labor Statistics, job losses accelerated in September. As we see here, the current unemployment rate is already far above the 8.8 percent the administration said the rate would top out at next year without a stimulus.

Some economists, including Paul Krugman, have argued that the problem with President Obama’s plan is that it doesn't spend enough. Hence, they think that a second stimulus is needed. Yet it is hard to argue that we already need another stimulus when less than a quarter of the money has been spent.

Other economists are arguing that the money is not being spent fast enough. Indeed, at this rate, the economy is likely to have recovered before most of the stimulus money has been spent.

Um, question: If a recovering economy will bring back the jobs, why increase our national debt? Just asking.

From the article is the conclusion:

Putting aside the question of whether the stimulus is too small or being spent too slowly, what too many stimulus advocates overlook is that to spend money, the government needs to either borrow, tax, or print it (or combine these). Money taxed or borrowed from the private sector is money that firms cannot spend on goods or employees. The government’s slice of the pie gets bigger by making the rest of the pie smaller. This may explain in part why the stimulus has not translated into declining unemployment.

You can find the original article here, complete with chart.

Stimulus Spending Does Not Work -- Never Has

Robert J. Barro, an economics professor at Harvard University, writes an editorial today at The Wall Street Journal, where he comes to several conclusions about stimulus spending based on a working paper issued by the National Bureau of Economic Research in September.

He defines how stimulus plans are supposed to work. "Stimulus packages typically also feature tax reductions, designed partly to boost consumer demand (by raising disposable income) and partly to stimulate work effort, production and investment (by lowering rates)."

He gives a detailed look at the data for wartime spending, positing that wartime spending is least affected by economic fluctuations.

His result? "The results mostly favor tax rate reductions over increases in government spending as a means to increase GDP."

You can find the editorial here.

Here is a link to the paper he references. You will have to purchase it.

The Stimulus Was Supposed to Create Jobs

That's what we were told, right? Government does not create jobs, the private sector does.

We see now from the Cincinnati Enquirer that this isn't happening there.

"Four major projects will widen or improve parts of Interstate 75 in Hamilton County, the Ohio 4 bypass in Butler County, US 27 in Campbell County and 12th Street in Covington.

"But after those four, most of the rest of the highway stimulus money will go for routine maintenance or resurfacing work. Construction so far on all the projects has created or retained fewer than 200 jobs since the money started flowing this spring, an Enquirer analysis shows."

And the article continues with its analysis later:

"Still, only seven jobs had been created or retained by Northern Kentucky projects under way through August, according to state records."

You can find the original article here.

Stimulus Road Repair Hanky Panky

USA Today has analyzed the $10 billion in stimulus funds being spent on road repairs and found some inconsistencies.

Half of the nation's worst roads are in counties that will only get about 20% of the stimulus money allocated by state and federal officials for street repairs. Although the worst roads are in just a handful of counties, they account for 11,000 miles of pavement so rough the government has branded them as unacceptable.

The review found:

• Detroit, which has about a third of Michigan's bad roads, will get only about 10% of the state's repair money. "It's just not fair," says Hassan Saab, a highway engineer for Wayne County, Mich., which includes Detroit. State officials acknowledge Detroit's roads are in dire need of work, but say they didn't have enough ready-to-go projects there.


• New York City had nearly 900 miles of bad roads, some of them among the very worst in the country. But it had received almost none of the nearly $400 million the state approved for road repairs through the end of August. The one project approved since will give the city only about $19 million, about as much as it will give rural Tioga County.


• Dallas trails only Los Angeles in miles of bad roads, yet it has received less than 1% of the $530 million that Texas approved for road repairs. "It's a significant issue," Dallas Mayor Tom Leppert says.

The problem is a byproduct of a stimulus package designed to spend as fast as possible to revive the economy. Many roads are in such bad shape that repairs would take too long and cost too much to qualify for funds, says John Barton, head of engineering for Texas' Department of Transportation.

But the real clincher here for me is the distribution of the dollars in a different way. I analyzed 16 states at random and included Washington, D.C. Here is what I found:

Place	# Counties	# Miles	Cost	Cost/Mile	Note
D.C.	1	68.1	$52,839,625.80	$775,912.27
Pennsylvania	3	294.9	$58,509,949.00	$198,406.07	Not all counties have roads that are getting money
Michigan	4	636.5	$96,267,320.68	$151,244.81
Nebraska	1	97	$13,955,039.00	$143,866.38
Washington	3	380.1	$51,476,422.50	$135,428.63
Oklahoma	3	295.8	$38,904,980.00	$131,524.61
Ohio	1	83.2	$10,113,030.00	$121,550.84
Mississippi	1	65.7	$6,478,100.00	$98,601.22
Tennessee	1	60.7	$5,295,753.00	$87,244.70
Wisconsin	2	164.7	$8,556,334.14	$51,951.03
Colorado	1	85.1	$4,190,706.00	$49,244.49
Arizona	2	215.8	$9,555,508.36	$44,279.46
NY	8	1077.3	$46,055,170.00	$42,750.55	Not all counties have roads that are getting money
Indiana	1	85.4	$472,500.00	$5,532.79
Kansas	1	81.8		$0.00	Not all counties have roads that are getting money
Louisiana	1	65.3		$0.00	Not all counties have roads that are getting money

Can someone please explain to me that how it can be that Washington, D.C., is getting more than 3 TIMES as much money as anyone else? If we're going to be spending the money, why not spend it where it's needed?

If you ask me, ACORN isn't the only one that needs to be investigated for corruption.

The original article, plus an interactive map with the data, can be found here.

If you can't read the table, leave a comment and I will send you my original spreadsheet with the data.

We're in Another Great Depression? Really?

Allan H. Meltzer writes an editorial in The Wall Street Journal and asks what happened to the depression?

Remember just a few short months ago? Certainly not much more than 12 months ago. We had all kinds of dire messages:

• Michelle Caruso-Cabrera, a reporter at business news cable network CNBC, told viewers it was "one of the most historic weeks in financial and American history." (1)


• David Bullock, managing director of Advent Capital Management, an investment fund in New York, said, "We are closer to the Depression scenario than not." (2)


• David Stevenson at Money Week said it could be the end of capitalism (3).


• Paul Krugman from The New York Times wrote a book, saying "an increasingly out-of-control financial system set the United States and the world up for the greatest financial crisis since the 1930s." You can see the promotional web page here.


• The New York Times said this is a "recession poised to become the worst since the 1930s." (4)

The recession was seized by the Democrats as an excuse to spend money. They say it was necessary. However, the indicators are that we are coming out of the recession and the spending the government proposed hasn't even really taken hold yet. In fact, the French and German economies are bouncing back and they didn't even spend any money on stimulus (5).

The recession we are in is nowhere near the Great Depression of the 30s. Back then, we had 25% unemployment. Today, the worst areas have around 10-12%.

Meltzer's editorial can be found here.

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1. MacMillan, Robert (2008, September 18). "The Great Depression of 2008? Not Quite". Retuers.
Retrieved September 1, 2009, from Reuters

2. Story, Louise and Eric Dash (2008, July 15). "Confidence Ebbs for Bank Sector and Stocks Fall". The New York Times.
Retrieved September 1, 2009, from The New York Times

3. Stevenson, David (2008, July 14). "Why the Fannie and Freddie Means the Dollar Is Doomed". Money Week.
Retrieved September 1, 2009, from Money Week

4. Uchitelle, Louis (2009, January 9). "Jobless Rate Hits 7.2%, a 16-Year High". The New York Times.
Retrieved September 1, 2009, from The New York Times

5. "Old Europe Drifts Out of Recession First" (2009, August 13). Atlantic Review.
Retrieved September 1, 2009, from Atlantic Review