NYC Letter: Big Fat Bad Fast Redux*

Day 114 of CHOPE

We should have an open and honest discussion about this recovery plan in the days ahead, but I urge Congress to move as quickly as possible on behalf of the American people. For every day we wait or point fingers or drag our feet, more Americans will lose their jobs. More families will lose their savings. More dreams will be deferred and denied.**

President-elect Obama,
in a speech at George Mason University, Virginia
January 8, 2009 (The Hill)

Every month we do not have an economic recovery package 500 million Americans lose their jobs. I don’t think we can go fast enough to stop that. The President asked for action, swift and bold. That is exactly what we are doing.

Nancy Pelosi (D-CA, 8th),
Speaker of the House, stimulus architect,
amateur demographer, and fabulist,
making the incredible case for rush legislation
February 3, 2009 (YouTube)*

Exactly 28 days after taking office Mr. Obama signed the $787B American Recovery and Reinvestment Plan (ARRP) stimulus bill into law, record time for passge of such a huge spending authoriztion. And still America sheds jobs by the millions. (Happily no longer the monthly hundreds of millions by Ms. Pelosi's count.)

STIMULUS AID TRICKLES OUT,
BUT STATES SEEK QUICKER RELIEF

May 12, 2009 (NYT) - Nearly three months after President Obama approved a $787 billion economic stimulus package, intended to create or save*** jobs, the federal government has paid out less than 6 percent of the money, largely in the form of social service payments to states.

Although administration officials say the program is right on schedule, they have actually spent relatively little so far.

The stimulus bill has directly injected around $45.6 billion into the economy, mostly to help states cover the costs of Medicaid and unemployment benefits, one-time $250 checks that were mailed to Social Security recipients last week, and income tax cuts that began to take effect this spring.

We jump in to point out that the expenditures cited create no jobs and have only a tenuous claim to "saving"*** any.

Although states around the country are beginning roadwork projects, the Department of Transportation had spent only about $11 million [?] on highway projects through the first week of May.

The DOT tells it a little differently.

TRANSPORTATION CHIEF CITES STIMULUS MONEY SUCCESS

WASHINGTON April 29, 2009 (Salon/AP) -The federal government has already committed nearly $11 billion in stimulus money to help get road, bridge and environmental projects off the ground, administration officials told Congress on Wednesday. Transportation Secretary Ray LaHood before the House Transportation Committee

I believe we have already achieved enormous success.

Lahood, a former Republican congressman from Illinois, told the panel his department had made decisions on $9 billion dollars in projects around the country out of Transportation's $48 billion share of the stimulus package.

... The two officials [EPA's Lisa Jackson† also testified] were less specific about the jobs directly resulting from stimulus spending.

It was originally estimated that the $64 billion in the stimulus for infrastructure -- for transit, high speed rail, aviation, federal buildings and Army Corps of Engineers projects as well as roads and bridges -- would create or sustain 1.8 million jobs.

But so far, reports on new jobs were mostly anecdotal. The Transportation Committee said its survey of state and local transportation officials revealed that work had begun on 263 highway and transit projects in 30 states, putting about 1,250 workers back on the job.

Bruce McQuain of QandO does the rough arithmetic.

SPINNING THE ‘STIMULUS’ PLAN’S EFFECT

April 29, 2009 (Examiner) - Of the 48 billion the department received under the stimulus plan, only 9 billion has been disbursed, to 263 projects in 30 states. That’s about $34 million per project.

LaHood then said that those 263 projects had spawned 1,250 jobs. That’s about 5 jobs per project. You can divide 34 million by 5 to see how much each of those jobs cost (about $6.8 million each). It is a staggering sum to pay for job creation and a sum no business in its right mind would pay and expect to stay in business for long. Yet government brags about it.

9 billion dollars to create 1,250 jobs. And, relatively speaking, that’s the good news. The bad news is 39 billion of the "stimulus" money remains unspent. At best, that makes it suspect as "stimulus" money. If what the Department has done to this point is considered to be a success, we can expect to see Sec. LaHood back on Capitol Hill bragging about using the remaining 39 billion to create an additional 5,450 jobs at a time we’re losing them 600,000 at a time.

This makes no sense. When government is creating .002 of the jobs we’re losing each month at $6.8 million a pop, that’s nothing to brag about nor is it having an overall stimulative effect.

Six point eight million dollars to "save" or create a job. [Pause.] At that price it will cost

$20.4 trillion dollars

to create or "save"*** the 3 million jobs Mr. Obama has pledged.

The intent of the stimulus program was to pump money into the economy quickly, and many members of Congress said at the time of its passage that speed was of the essence. But the huge program has been a challenge to administer for both a new administration and for states and local governments grappling with their own fiscal problems.

This is because what is largely missing from the ARRP is the "P". The Plan.

At the same time, some economists have questioned the administration’s claims that the bill has saved*** or created 150,000 jobs.

By Mr. Obama's reckoning the ARRP has "created or saved"*** an undocumented 150,000 jobs -- with a concurrent net loss of 1,462,000 jobs over the same period. [Pause.] It's an enormous success.

This is what economic stimulus by a community organizer looks like.

CHOPE.

Oversold. Overpromised. Overhyped.

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* For background see earlier posts here and here.

** Deferral then denial, such is the procession of disappointment in Mr. Obama's America. One or the other is dismaying, but both seems unnecessarily cruel, it being kinder to just cut to the denial straightaway.

*** There is no metric for "saved" jobs.

† For the record, the AP gives Mr. Lahood's party affiliation and former employ. However the AP does not bother to do so for Ms. Jackson. Perhaps you would like to know. Ms. Jackson was the former Commissioner of the New Jersey Department of Environmental Protection and later Chief of Staff to Democrat Jon S. Corzine, then-Governor of New Jersey. The Public Employees for Environmental Responsibility (PEER) opposed her appointment to higher office. PEER's Executive Director Jeff Ruch:

Under her watch, New Jersey’s environment only got dirtier, incredible as that may seem.

And this:

DEP employees describe Ms. Jackson as embracing a highly politicized approach to environmental decision-making that resulted in suppression of scientific information, issuance of gag orders restricting disclosures and threats against professional staff members who dared to voice concerns.

There you are. For the record.

Posted by Damian at May 14, 2009 12:00 PM