Obamanomics: More Fiction Than Fact
The story Monday was that the Obama administration was accelerating the rate of spending of stimulus money. In making this announcement, the Obama administration is admitting that ARRA hasn’t had an impact yet. Everyone in America knows that. The other mistake the Obama administration made Monday is predicting that 600,000 jobs will be created as a result of the accelerated rate of spending:
President Obama billed it as an adrenaline jolt to a depleted economy — a $787 billion stimulus that would not only put people back to work, but underwrite new construction and energy projects the U.S. had long neglected. But with the economy still sputtering and some economists questioning whether the program is meeting its goals, Obama doubled down on his promises, vowing to accelerate stimulus spending with the goal of creating or saving 600,000 jobs by summer’s end.
Emerging from a meeting with Cabinet officers, Obama sought to claim substantial progress but at the same time hold down expectations.
Holding down expectations isn’t something that the Obama administration has to work at. At this point, people have wearied of the bad economic news. People’s confidence in President Obama’s spending and his economic team is shrinking. If President Obama’s latest plan doesn’t quickly change the direction of this economy, people’s confidence might be shattered permanently.
In this post, I said that President Obama’s policies had failed. Let me explain what I meant by that. It isn’t that I think we won’t see some economic growth during President Obama’s term in office. In fact, I wouldn’t be surprised if we have economic growth early next year. It’s that I suspect that unemployment will hit 11 percent, that the debt that President Obama is creating will dramatically slow the future growth of the economy and that inflation and high interest rates will happen as a direct result of his policies. Given all those dire things happening, it’s impossible for me to think of that as success.
During his interview with Neal Cavuto, Rupert Murdoch said it’s a virtual certainty that unemployment will hit 11 percent. We’re only a point and a half away right now so it’s impossible to think that we won’t hit 11 percent by Thanksgiving.
From a political point, weak economic growth might doom Democrats. I’ll remind voters that President Obama raised expectations by saying that ARRA was the only thing standing between us and 8 percent unemployment. I’ll remind people that we spent $787,000,000,000 on a bill that’s dramatically backloaded for after 2010 and another $410,000,000,000 on the omnibus bill to run government for the rest of FY2009.
The next thing I’ll do is I’ll ask people if feeble economic growth, coupled with high unemployment, high inflation rates and high interest rates is a good enough return for $1,197,000,000,000 worth of spending. I suspect a majority of people will agree with me that it isn’t a good return on investment.
Finally, I’ll remind people that the last time we faced this combination of economic statistics was the Carter Admininstration. I’ll remind them that that’s when the term misery index was coined. (Actually, Jimmy Carter coined the phrase during the 1976 campaign.) I’ll remind them that the misery index is calculated by adding the inflation rate with the unemployment rate. I’ll remind people that the alltime high misery index number was 21.98 during Jimmy Carter’s administration.
By the time the midterms roll around, we might be approaching Jimmy Carter’s record, though I’ll defer to King on that.
It’s disheartening to hear the Obama administration talk about the jobs saved statistic. At best, jobs saved simply means that alot of money was spent to preserve existing jobs. Any idiot can do that. I’m sure that people who did’t get terminated are thankful but that isn’t a measuring stick of economic growth. Economic growth is required to create jobs. I don’t think that many people are optimistic about that at this point.
President Obama’s economic team has dramatically underperformed thus far. Treasury Secretary Geithner was laughed at by Chinese economic students when he told them that America debt was secure. The stimulus plan hasn’t worked as advertised.
With that set of facts, why should people have confidence in Team Obama’s predictions?
Technorati Tags: Economy, President Obama, Tim Geithner, Jimmy Carter, Misery Index, Unemployment, Inflation, Interest Rates, Job Creation, Jobs Saved, Economic Growth, Great Recession
Cross-posted at LetFreedomRingBlog