President Obama’s Bridge to Nowhere

“This is President Obama’s economy now”

-Congressman Eric Cantor

At the beginning of his term in January, President Obama warned the nation that it faced an economic crises not seen since the Great Depression. Without swift action, he said, the downward spiral would continue and the American economy would suffer the consequences. His solution was a $787 billion stimulus plan, which the administration claimed would rescue the economy by injecting it with new, job creating spending. The Obama Administration admitted that the legislation was full of earmarks, but said it was a price the nation simply had to pay for immediate action.

That immediate action, the administration promised, would keep unemployment below 9%, and would spur a broad recovery in the stock market. Thursday, the unemployment rate hit 9.5%, its highest level in 26 years. The stock market closed at 8,280.74, down nearly 6% for the year. It appears the $787 billion “stimulus” was anything but.

The ineffectiveness of the stimulus is not surprising. Only a little over one third of the money was allocated toward growth producing spending (tax cuts plus infrastructure investment), while the remainder was simply earmarked for political agenda items. Among the waste were the following:  1. Nearly $4 billion to ACORN (the far-left group that helped President Obama get elected); 2. $400 million for global-warming research; 3. $20 billion for food stamps and $36 billion for expanded unemployment welfare (welfare expansion policies long hoped for by Democrats); 4. $50 million for the National Endowment for the Arts; 5. $150 million to the Smithsonian museum. Did anyone actually expect items such as these to stimulate the economy?

And for all of the rhetoric surrounding the need for swift action—a favorite of the Obama Administration (see healthcare; the mortgage, financial, and auto bailouts; cap-and-trade environmentalism)—only 23% of the total spending is slated to be spent this fiscal year. The rest will be spent through 2011, long after most economists expect the natural market rebound to occur.

Democrats have been understandably silent on economic issues in the past month, and the administration has been hesitant to offer a defense of its now failed policy. Its only argument to date: 150,000 have been “saved” because of stimulus spending. When asked how that number was determined, the Obama Administration said it was based on theoretical statistical modeling that predicted job savings through spending initiatives. Since the President took office, the economy has shed over 2 million jobs. Unemployment now stands well beyond the levels the administration promised the stimulus would help maintain. Unfortunately for the administration, fact has inconveniently trumped theory.

President Obama needs to be held accountable for the failure of his policy and lack of economic leadership. At a time when the country desperately needed serious, thoughtful action, his administration forwarded a highly partisan pork-filled bill. The portion of the bill that legitimately sought stimulus spending was based on unproven and controversial Keynesian economic theory. No country has ever used government funds to spend its way out of a recession–ever. Not to mention that the stimulus greatly expanded an already dangerous deficit which will only prolong the downturn.

And all of this waste for what? Democrats saw an opening (“never let a serious crisis go to waste”) and were able to push forward a political wish list they had been holding for decades.  The Obama Administration decided that it could allocate resources and use consumer money better than consumers themselves could. They failed to realize a powerful economic axiom: Every dollar the government spends will be spent for political purposes; every dollar the economy (businesses and consumers) spend will be spent for economic purposes. Now the economy, and American citizens, are suffering the consequences.

With the country now focused on healthcare, Justice Sotomayor, and cap-and-trade, the egregious error of the stimulus may be left behind. But perhaps not. According to a Rasmussen Reports poll, 45% of Americans believe the remainder of the stimulus spending should be canceled, and close to 40% now hold President Obama responsible for the nation’s economic struggles. Those numbers have accelerated greatly in the past two months alone.

Perhaps the nation is beginning to realize that not all “change” is good change. Many Americans were frustrated with the Bush Administration and the Republican Party. But I doubt that aggressive partisan politics, radical government expansion, and socialist policy were the change they had “hoped” for.

-Matt Benchener from TruPolitics.net