On the first anniversary of the Stimulus package’s signing, it’s time to take stock of President Obama’s cure-all for the kaput housing market and continuing economic decline. Back in the infancy of the President’s term, the American Recovery and Reinvestment Act passed Congress with little opposition and fewer members actually reading the bill. Still, the fed up electorate was ready for action and that is what the new President gave them.
“Preventing Catastrophe”
While Obama claims the $787 billion expected to be spent over 2 years steered us away from an economic depression, it was more like we dodged the pothole of a market correction and are now headed for the cliff of free-market destruction. The Administration hypocritically advertised a “New Era of Fiscal Responsibility” and put more cash in the spending blast furnace than ever before. So far according to Recovery.gov, a scant $272.2 billion has been awarded – 35% of the total price tag. An even lower amount, $57 billion, has actually been received by state and local governments.
I have to ask, what kind of catastrophe Obama was trying to prevent? The Great Depression was largely caused by the Federal Reserve’s mismanagement of the money supply. The housing crisis was a result of Fanny Mae and Freddie Mac offering subprime loans to financially incapable Americans. The unemployment rise spawned from increased uncertainty in the market’s future. The theme? Through these periods we’ve been told to trust government while much of what occurs is government’s fault. I wonder, if the government doesn’t trust me with my money when I live within my means then how can I trust it after so many catastrophic failures?
“Increasing Transparency and Job Creation”
After states and citizen groups started noticing phantom jobs appearing in fake Congressional districts, the media rushed to interview the six people whose jobs were “created or saved” in South Carolina’s 16th district. Unfortunately, no plane tickets could be booked and no roads led to such a happy place because it doesn’t exist. In reality, jobs have been created or saved but at fantastic costs. Two jobs in Cebolla, New Mexico for $1.5 million and no jobs in Union City, New Jersey for an impressive $38.6 million. These are but two examples of government inefficiency. Don’t believe me? 595,263 total jobs are listed as created but at a cost of almost $200 billion. That’s $333,489 per job - no wonder the public sector is exploding!
Many proponents of the stimulus have cited this year’s larger influx of government dollars as a reason to wait for the stimulus’ full disbursement. Many economists, such as Brian Bethune, are not so optimistic. The focus on infrastructure spending "doesn't really have a big impact on net employment, simply because a lot of the activity is mechanized.”
“Reinvestment and Recovery”
The stimulus is not a failure because President Obama wishes to help people, it fails because it helps very few at the cost of so many. We cannot expect to climb out of such an economic downfall expecting the broken leg to work and ignoring the working leg. We have to learn from our mistakes and understand that government is not the solution to many of the problems we face today.
Government reinvesting in America is somewhat counterintuitive. We do not have to pay out dollars and superficial jobs but allow America to reinvest in itself. If the handcuffs are removed on the innovative spirit and capabilities of the nation’s businesses and entrepreneurs, the exports will rise from our competitive labor force, the unemployment rate will shrink with the growth of demand, and our national identity will change from the empty factories of Detroit to the telecommuting bases of Atlanta and Seattle.
Recovery can only occur when regulations, taxation, and government intervention are all stemmed in our economy. When freedom returns to a free-market, we need only wait for what really employs people in worthwhile jobs: Capitalism.