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Aug 10 2012

Just How Much Has Been Wasted on “Stimulus”?

The one thing we can all agree on is that if the real intention of Obama’s “stimulus” spending was to help the economy, it failed. But not even his opponents can agree on just how much of our money and our descendants’ money has been wasted. Don’t even try to get your head around these numbers:

Tom Firey of the libertarian Cato Institute estimates that the U.S. has dumped at least $2.5 trillion of fiscal stimulus into the economy since 2008. …

Some of the bills tracked by Firey were measures explicitly aimed at stimulating the economy, like the 2009 stimulus bill, by borrowing money to spend now, while paying it back down the road.

Other bills, like the bills extending unemployment insurance, were not explicitly intended to be stimulus measures, but Firey argues that they were in effect stimulus measures because they borrowed and spent money now, rather than redirecting money the government already has.

The creator of the famous Laffer Curve puts the number still higher:

Art Laffer, economist and former economics adviser to President Ronald Reagan, also puts the true amount of stimulus spending much higher than $819 billion — at more than $4 trillion.

“Federal government spending as a share of GDP rose to a high of 27.3% in 2009 from 21.4% in late 2007,” Laffer wrote in the Wall Street Journal. “This increase is virtually all stimulus spending, including add-ons to the agricultural and housing bills in 2007, the $600 per capita tax rebate in 2008, the TARP and Fannie Mae and Freddie Mac bailouts, “cash for clunkers,” additional mortgage relief subsidies and, of course, President Obama’s $860 billion stimulus plan that promised to deliver unemployment rates below 6% by now.”

“Stimulus spending over the past five years totaled more than $4 trillion,” he concluded.

Astonishingly, irresponsible leftists like Paul Krugman and Bill Clinton proclaim that Obama’s stimulus waste failed because he should have flushed away even more. Certain RINOs must agree:

Last week, with the help of Senator Orrin Hatch, the Senate Finance Committee voted to extend dozens of special interest tax preferences for green energy — preferences that are nothing more than subsidies and market distorters. Included in the $205 billion package is the Production Tax Credit, which subsidizes up to 80% of wind energy production.

When will the flagrant waste stop? Not before the inevitable collapse.

obama-stimulus-spending

On tips from AC.



  • Bloodless Coup

    IRS WHISTLEBLOWERS REPORT THAT THE IRS AGENTS ARE AIDING AND ABETTING ILLEGAL ALIENS IN COMMITTING TAX FRAUD.

    http://www.infowars.com/irs-caught-in-id-fraud-scam/

  • Bloodless Coup

    IRS WHISTLEBLOWERS REPORT THAT IRS AGENTS ARE AIDING AND ABETTING ILLEGAL ALIENS IN COMMITTING TAX FRAUD.

    http://www.infowars.com/irs-caught-in-id-fraud-scam/

  • Nangleator

    Republicans claim that tax cuts are a terrible idea and don’t stimulate anything? One third of the stimulus was tax cuts. They helped me.

    I drive on some of the rest of the stimulus, every single day.

    I have a job and got bonuses because my company benefited tremendously from the grant money for scientific equipment that didn’t dry up in the recession. I spend money on local businesses.

    One of your sources, Art Laffer, has been thoroughly discredited as an economist. (http://uneasymoney.com/2012/08/06/arthur-laffer-anti-enlightenment-economist/) Please continue using him as a source!

  • Mickey Shea
  • dan

    …how much has been wasted ? More than enough to have paid off all of the debt and started out at scratch.
    They did this every 50years back in Old Testament Bible Days and called it Jubilee.Funny how following the instructions works out .

  • TED

    If the Medical community…

    So whats wrong…

  • TED
  • Spider

    Todays Question:

    So, what happens when a dumbo-eared Marxist puts a totally unqualified, ugly, radical left-wing bull dyke, in charge of the Dept. of Homeland Stupidity?

    A. The agency become the 21st century Gestapo?

    B. We get to see what the term, “FUBAR” really means?

    C. Incompetence is raised to an art form?

    D. Qualified males are replaced by unqualified lezbos?

    E. All of the above?

    http://www.nypost.com/p/news/national/homeland_homegirls_Se5i5dCvDQc84CE9rSpvBM

  • Ghost of FA Hayek

    Nangleator
    And just where did that money come from ?
    The Stimulus fairy ?
    That cash your company spent on scientific equipment came directly from investors who may have funded OTHER scientific equipment.
    These investments fuel GROWTH, which is what is sorely needed.
    The government picked your company as a winner based on political concerns.
    Your company merely gained at the point of a gun.
    Now explain to me why YOUR company should be exempted from the marketplace

    From your article
    Suppose Estonia — Laffer’s poster child for Keynesian stimulus — kept spending unchanged between 2007 and 2009, but GDP contracted by one-third. If Laffer is calculating his first number by the first method, he comes up with an increase in government spending as a percentage of GDP of 33%, even though government spending did not change.
    _____
    No, what is perverse is the notion that governments operate in a vacuum
    Estonia is now drawing it’s revenue from a supply that is 33 percent SMALLER, so the prescription for government is a BIGGER TAP ?

    The article then continues by demanding the reader accept the assertion that government spending averts recessions by invoking Milton Friedman in his work on fiscal stabilizers.
    The problem is that Friedman also said that by the time these “stabilizers” are employed, it’s already too late to divert any incoming recession.
    If these “stabilizers” work so well, why not hold a lottery and PAY the winners not to work for their lifetime ? Then time would be of no consequence in the equation.
    San Fran Nan is still wrong, Nangleator. Unemployment bennies do not stimulate an economy

  • Tim from TK

    Nangelator sez:

    “I have a job and got bonuses because my company benefited tremendously from the grant money for scientific equipment…”

    Who knew McDonald’s needed scientific equipment at the drive through window ? What a country.

  • AC

    Nangleator says:

    The average American family can have a good time too, living on credit.

    Eventually the party comes to an end as debt service costs outstrip productive capacity.

    In the case of public spending, the allocation of scarce capital towards wasteful ends instead of growth impairs society’s ability to service said debt.

  • Nangleator

    “Your company merely gained at the point of a gun.”

    No. My company produces scientific equipment. Colleges, universities, and government agencies had more money for research as a result of the stimulus. All vendors benefited.

    “And just where did that money come from ?”

    The one source of spending in the recession: the government. Us. Without that spending, NO serious spending would have occurred, and the recession would have deepened. Your fabulous market sat on 1.7 trillion dollars of pure profit, and let us dangle. They still sit on that money. Tax cuts for the rich would just expand the pool of useless money, instead of growing anything.

    “Unemployment bennies do not stimulate an economy”

    But they keep skilled workers alive until the market needs their services again. And just what do you think those unemployed people are doing with the money, anyway? Storing it in a Cayman bank? No. They are spending it. In what economy do you think they are spending it?

  • M.Wilson

    Technically, we could end unemployment right now by drafting every single unemployed person into a civilian work program where we find stuff for them to do eight hours a day.

    This would be disastrous for three reasons:
    One: we absolutely cannot afford that large of an expense, and we would thus be reduced to a nation of paupers.
    Two: Taxing government pay never produces positive revenue. Think about it.
    Three: Digging ditches and filling them back in does not make an economy. The belief that “it doesn’t matter where the money goes so long as it’s spent” is the basis of the Broken Window Fallacy.

  • AC

    But they keep skilled workers alive until the market needs their services again. And just what do you think those unemployed people are doing with the money, anyway? Storing it in a Cayman bank? No. They are spending it. In what economy do you think they are spending it?

    They also discourage employment by allowing free riders to coast along on the public teat until just a few weeks before expiration.

    Skilled workers do indeed face joblessness from time to time. Here’s a radical thought: save your own damn money instead of frittering it away on satellite TV and jetskis.

  • Comrade Chairman Barack Obama, Hero of Socialist Labor

    Technically, we could end unemployment right now by drafting every single unemployed person into a civilian work program where we find stuff for them to do eight hours a day.

    Let me be clear: my uncle Joe employed this strategy with great success.

  • Nangleator

    AC: “In the case of public spending, the allocation of scarce capital towards wasteful ends instead of growth impairs society’s ability to service said debt.”

    How can you declare that all stimulus money was spent wastefully? Do you automatically assume that if a dollar originated with the government, its movement within the economy is wasteful?

    I’m still surprised that Republicans are against tax cuts.

  • bobdog

    How much of the stimulus money was wasted?

    Easy.

    All of it.

  • Nangleator

    M.Wilson: “Three: Digging ditches and filling them back in does not make an economy. The belief that “it doesn’t matter where the money goes so long as it’s spent” is the basis of the Broken Window Fallacy.”

    Tell it to the people that worked their way out of the Great Depression. Roosevelt solved that problem with massive government spending.

    (Wingnut argument to that: “No! The war ended the Depression!” Okay, you mean “massive government spending?” instead of “massive government spending”?)

  • AC

    How can you declare that all stimulus money was spent wastefully? Do you automatically assume that if a dollar originated with the government, its movement within the economy is wasteful?

    Such is the nature of stimulus, which is spending for the sake of spending. Government is quite poor at allocating capital efficiently in the first place, although the blind bureaucratic squirrels do occasionally find a nut. Stimulus is even worse, as the goal becomes getting money out the door in any way possible.

    The failure of your moonbat economic policies is utterly predictable. I guess I have to thank you and your kind for my new house, my boat, much of my NFA collection, my trips, and so much more.

    Your policies are destined to fail as has been explained by Mises, Hayek, Rothbard, et al. All I have to do is obsessively read the news and trade against that which is doomed to failure.

    I’m still not sure why I need seven bedrooms, but hey, Helicopter Ben is the one picking up the tab for that.

    If Keynesianism, loose money, and socialism weren’t destined to fail then how can someone do so well consistently betting against them?

    The Facebook debacle was the latest example of loose fiat chasing phantom returns. I’m glad I was short that turd. Greenspan provided the proof of concept during the first tech bubble.

  • AC

    Tell it to the people that worked their way out of the Great Depression. Roosevelt solved that problem with massive government spending.

    (Wingnut argument to that: “No! The war ended the Depression!” Okay, you mean “massive government spending?” instead of “massive government spending”?)

    Roosevelt prolonged the depression by wasting society’s scarce capital on, literally, boondoggles, and various other forms of waste. There were some necessary projects which were pulled forward in line with market theory, but then again, refer to the blind squirrel.

    Roosevelt’s big government regulations hamstrung private investment and discouraged the hiring necessary to end the depression.

    WWII helped end it not because of the money spent, but only because that wartime necessity and the need for soldiers helped cut through the anti-job red tape.

  • Spider

    Orrin Hatch, another one of those incompetent old phonies who’s been hiding in the senate for years, is proof that what’s truly needed is for We The People to erect a gallows in the middle of the senate floor, just to serve as a reminder to all the elected lying crooks who nest in that place, that there is a price to pay for what they’ve done, and continue to do, to this country.

    Then again, they are fully aware that sheep never protest. They simply comply.

  • M.Wilson

    An interesting note is that the depression didn’t end until all that government spending stopped.

    So then one must wonder, did the work programs and draft end the depression, or did they prolong it?

    What ended the depression was a massive stack of savings. The widespread rationing imposed by the war meant that less goods were available than people had money to buy, so money slowly stacked up in savings accounts. Meanwhile, millions of soldiers overseas, nearly an entire generation, received a paycheck every month for five years with absolutely no way to spend it. The result was that instead of money going out and being quickly frittered away, it stacked up in huge piles while people waited for the war to end.

    With the end of the war, government spending was drastically cut. But the rations ended, the soldiers came home, and *private* spending skyrocketed, causing the economy to finally take off. A rather painful way to end a recession if you ask me. I assure you the duration of the war saw little prosperity, it only saw rationed bread, rationed meat, a life of austerity.

  • AC

    Orrin Hatch vitals –

    Occupation: Attorney

    Enough said.

  • Nangleator

    M.Wilson: “But the rations ended, the soldiers came home, and *private* spending skyrocketed, causing the economy to finally take off.”

    Then you must be in favor of 90% tax rates for the top brackets?

  • M.Wilson

    Besides the fact that the notion of an astronomically high tax rate being the source of private spending is absolutely ridiculous, I assure you not a single person in history has paid a 90% tax on anything, regardless of the nominal rate.

    Historically, the US government has never been able to collect more than 18-20% of GDP in revenue regardless of tax rates. I’m sure such astronomically high taxes did create lucrative opportunities for shady lawyers who specialized in avoiding them though.

    So if you want to fund shady lawyers at the expense of everyone else, go ahead, raise those taxes.

  • anon

    Stimulous will NEVER work for one very simple reason: Every dollar the gov’t spends reflects $1.60 TAKEN OUT of the productive economy.

  • Nangleator

    M.Wilson: “I assure you not a single person in history has paid a 90% tax on anything, regardless of the nominal rate.”

    Correct! The ‘loophole’ was to turn your profits into growth. You didn’t pay 90% and the country grew by leaps and bounds.

  • Ghost of FA Hayek

    Your fabulous market sat on 1.7 trillion dollars of pure profit, and let us dangle. They still sit on that money.
    Nangleator

    In that case, it’s high time to invest in cream cans.
    After all, if the rich are so inclined to do NOTHING with their cash, they have to put it somewhere.
    BTW, you need to follow the narrative and call them greedy while you take their money.
    If not cream cans, just where does this aggregate savings go ?
    Savings accounts
    Stocks
    Mutual funds
    Bonds
    http://jpatton.bellevue.edu/ants.html
    In actuality, saving is spending and there is much, much more of it than Keynesians realize, being misled by their own GDP statistics, which measure a nation’s output of final good and services. GDP excludes intermediate products and spending by entrepreneurs- the goods-in-process sector of the economy.-the natural resource, manufacturing and wholesale stages in the production process. Because consumer expenditures are usually two-thirds of GDP and investment is usually only 15% to 17% of GDP, many economists and media pundits wrongly conclude that consumer spending is more important than investment spending, which depends on savings. This is simply wrong. Savings may be invested directly by the saver in a business, for example, or indirectly invested by the saver’s bank. In any case the savings are spent. To save is to spend.

    _____
    Tax cuts for the rich would just expand the pool of useless money, instead of growing anything

    So your company was doing the nation a great service by spending SOMEONE ELSE”S MONEY ?

    Of course Nangleator
    If the government can’t shovel money your way fast enough by printing and borrowing, why not ?
    _____
    But they keep skilled workers alive until the market needs their services again.
    Yes they do.

    An acquaintance of mine just got layed off after 22 years of employment.
    The problem is his line of work has become obsolete.
    Should he remain on unemployment forever ?
    Should the government step in and “invest” in that plant ?
    They sure wanted to.
    He was a union member
    So he want’s to know where HIS UAW style bailout is.
    Why is he LESS important ?
    Could it be political ?

    And isn’t unemployment a form of savings ?
    This money was originally taken from his pocket.
    He should be grateful for getting some of his own money back, right ?
    So on one hand the government holds interest rates artificially low to discourage savings and (according to Keynes) “grow the economy”
    Then on the other they want to be praised for saving on behalf of workers

  • Ghost of FA Hayek

    Just so you know, Nangleator’s RX for a broken economy is another 20,000 pages to the tax code to ensure any growth in the economy is EXACTLY where government thinks it should be.
    And in his case, it should be with HIS company because of their successful lobby effort (and possibly well placed campaign contributions)

  • AC

    The defeated troll skips over superior points, as usual.

    Moonbattery doesnt work. It can only take up residence in the brains of the malicious, the ignorant, and the bamboozled.

  • M.Wilson

    I believe AC has perfectly summed up the condition of someone who thinks that growth can only be achieved by tax evasion and money laundering. When tax evasion is the national passtime, that’s a good sign that your taxes are too high.

  • Nangleator

    In fact, what you call moonbattery works pretty well. Clinton had us on course to paying off the deficit that suddenly became so important to all wingnuts, as of 1/20/09. His plans were interfered with. Obama brought us back from the brink of disaster, as close to single-handedly as a President ever can.

    There couldn’t ever be any more Republican presidents if it weren’t for Democratic ones fixing all the problems for them. Republicans just play around like selfish, stupid kids with matches, and then the adults come along to put out the fires and apply the Band-Aids.

  • Ghost of FA Hayek

    M Wilson
    In the times of high marginal rates, cash was always king.
    It was that, or the year was cut short when it no longer paid to work

    Obama brought us back from the brink of disaster, as close to single-handedly as a President ever can
    Nangleator
    The Democrapts controlled both the house and Senate
    Thanks for playing.

  • Nangleator

    With this unprecedented interference: http://voices.washingtonpost.com/ezra-klein/99AD7E38-F65B-4F22-8128-47FE84FAEB13.png

    Thanks for playing.

  • AC

    In fact, what you call moonbattery works pretty well. Clinton had us on course to paying off the deficit that suddenly became so important to all wingnuts, as of 1/20/09. His plans were interfered with. Obama brought us back from the brink of disaster, as close to single-handedly as a President ever can.

    If you want to play the partisanship card, do tell us who ran Congress at that time.

    The budget was not balanced. Congress was engaged in phony accounting to hide the deficit behind smoke and mirrors, ultimately racking up debt off the balance sheet, all the while Greenspan was busy flooding the economy with cheap money.

    Greenspan’s loose monetary policies came crashing down.

    Obama did not bring us back from the brink of disaster. His Porkulus did not come anywhere close to his own administration’s estimates, and that is using the phony, administration friendly numbers from the BLS.

    Obama’s reckless deficit spending is setting us up to go over the cliff.

    The sick economy can only be propped up by Helicopter Ben for so long.

    When priced in gold or oil, the real numbers become clear.

  • wingmann

    Our goobermint is spending close to ten million a minute…doesn’t that stimulate you?

  • IslandLifer

    Dangle can’t help it. When the head is kept in the sewer far too long you eventually end up with shit for brains. Mangle is a poster child.

  • M.Wilson

    So Nan tosses the ruse aside and reveals that he knows absolutely nothing about basic economics, and clings to Democratic party propaganda with absolute disregard for reality. If you want to play partisan politics, that’s all too easy.

    If Democrats are so wonderful, why are places like Chicago and Detroit which have been under Dem stranglehold for generations falling apart? Why is Democrat stronghold California experiencing a mass exodus while people flood into backwards old Republican Texas to seek a better life?

    Democrats are only good at three things: fraud, propaganda, and nabbing the Presidential election at convenient points in the business cycle. If you look at any place where Conservative liberty or a Socialist death-grip have existed for an extended period of time, the difference is clear.

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