Stimulus Not Working? Hold Your Horses!
People in the media are starting to criticize the Obama administration for what they consider plenty of time to have gotten the Recovery and Reinvestment Stimulus money out to all the States and cities across America and thereby improving our economy. They say 4 months is plenty of time to do all that.
It appears that the media, talk show hosts and Republican Party (even some in the Democratic Party) have very short memories.
Forgive me if I don't have my times exactly correct.
In February of 2001, the House was just passing their version of George W. Bush's tax cut which amounted to around 1.35 trillion over a 10 year period (need I remind you that the health bill currently being discussed is estimated to cost less than that over a 10 year period?).
It was July 1, 2001 before that bill was finally signed by President Bush. Rebate checks began in July and the last were being disbursed in September of that year. That bill alone took over 6 months to even pass, let alone get disbursed in the form of rebate checks to individuals.
It took another 6 months in 2003 to get another tax cut in the amount of 300 billion voted on. Remember when Mr. Bush hailed the legislation as a job-creating measure that would also put much-needed cash in the hands of working people.
In 2004 it was October before another $136 billion tax break was created for businesses and farmers.
In May of 2006 yet another tax cut in the amount of $70 billion was signed by Pres. Bush. Remember when he said the following: "Our pro-growth policies stand in stark contrast to those in Washington who believe you grow your economy by raising taxes and centralizing power," said Mr. Bush, who was joined at the signing ceremony by Vice President Dick Cheney. "They are wrong. Our pro-growth economic policies are working for all Americans."
It took from January to June 2008 to get yet another tax rebate from Congress. Bush said the following about this one: "President Bush says the slow growth of the economy is "not good enough for America," but new rebate checks will inject some life and spending soon. "This economy is going to come on," Bush said today. "I'm confident it will." Rebate checks of up to $600 for individuals and $1,200 for couples are starting to hit bank accounts this week.
These examples in my view point out how long it takes to get something voted on and how long it takes to get the money "rolling" in the economy.
It also points out that no matter how many tax cuts were given to Americans, the economy still tanked, so badly in fact, it nearly reached to the level of the Great Depression.
President Obama, Vice President Biden and Democrats in Congress (with about 3 Republicans) were able to present bills to their respective houses, debate them, vote on them and signed them into law in less than 30 days (He took office Jan 20, 2009 and signed bill on Feb 17, 2009).
It is now July 8, 2009, less than 5 months since the signing of the bill, of which the bulk hasn't even been sent out, and the part that has, the results won't even be reported on till October of this year.
To put all this in perspective, look at the State of Illinois alone. Governor Quinn announced in March that he wanted a tax increase to pay off the debt and balance the budget with. Four months later, the legislature is still working on it. In fact their next meeting is scheduled for July 15th to discuss the budget, yet again.
My point is, anybody that has ever experienced a conversion or make over at their company or work place knows that it can take months and even years to get the job done. My current work place started a conversion in 2004 and finally finished it in 2008. That's how long it took to plan for, budget for, and execute in segments.
Americans need to have patience. I know that's easy to say when you have a job but try and use some common sense in your judgments about the way this administration has handled itself so far. How long does it take you to plan and budget for a new home? The Obama administration is doing just that. Planning and implementing a new America.
Personally, I think it is the media that is once again playing into the GOP's hands by believing it's been, "long enough" and that the administration's plans "aren't working".
The massive amount of mess this administration was left with, is by itself, reason enough to give the administration's plans -- more time.
President Obama said from the very beginning of this bill,
"The stimulus package was a huge victory for Obama less than one month into his presidency. But he struck a sober tone and lowered expectations for an immediate turnaround in the severe recession that is well into its second year.
"None of this will be easy," he said. "The road to recovery will not be straight. We will make progress, and there may be some slippage along the way."
Still, he declared, "We have begun the essential work of keeping the American dream alive in our time."
The Bush administration had 8 years with 4 tax cuts to get it right and still ended up with the worst recession since the Great Depression. President Obama's been in office 6 months.
So, for those of you complaining already --- Hold Your Horses!
















No. We have every right to complain. The economy is a mess and we don't have months or years. A stimulus doesn't stimulate anything if it takes so long for it to flow through the economy. We need to focus on solutions that have a more immediate impact. Instead of the stimulus that was proposed, we should be looking at a payroll tax holiday until the economy starts to grow again mixed with a much larger more aggressive infrastructure plan. The payroll tax holiday could go into effect next week and will instantly put $20 billion per week every week into the pockets of consumers.
The Administration has things backwards. Whether its bailing out banks or the stimulus, all of these bailouts are top-down. We need a stimulus that's bottoms-up and gets money into consumers pockets right away. Obama thinks if we can fix the banks that it will restore credit to consumers and get them spending again. But that obviously isn't working as planned.
July 8, 2009 9:41 PM | Reply | Permalink
Bill, you should know the research that shows tax-cuts have a lower multiplier effect compared to 'top-down' government works programs. These take time to get up and running, but they should start kicking in now. The stimulus would probably be more effective if there were LESS tax-cuts involved. Apart from that agreed that the bank bailout as it is being conducted is really hurting the chances of a successful stimulus. I don't know how to estimate it, but if credit isn't flowing at all, much less to those with good credit, the multiplier effect of these programs is going to get reduced.
July 9, 2009 8:29 AM | Reply | Permalink
NoClassBill is a polemicist with little interest in reality. Much like Procrustes, he stretches and cuts the facts to fit his personal agenda, which is, as always, about him and only him.
Don't waste your time arguing with fanatics.
July 9, 2009 11:29 AM | Reply | Permalink
Fanatic? I just want to put money in the hands of the people rather than the government.
What facts am I "stretching or cutting"??
July 9, 2009 2:04 PM | Reply | Permalink
They should start "kicking in now"?? Really?? Do you mean just the $50-75 billion or so that's been spent? 50-75 billion isn't a very big number
July 9, 2009 2:02 PM | Reply | Permalink
Bill, I don't always agree with you, but you are always clear and polite. I have noticed some do not answer you either clearly or politely.
Regarding this issue, I would gander that your greatest sin has nothing to do with your opinion. Your sin is that you dare say anything negative about this administration. Did you not know we are still on the honeymoon?
Why did our new administration continue the Bush policy of more banquet for the rich so some crumbs can fall on the floor? Obama thinks the best way is to "use what works and fix what is broke." He has not yet realized that our whole system is broke.
July 9, 2009 1:44 PM | Reply | Permalink
Bill has an extremely short memory. Our economy is a mess because it's has been in decline for the last 30 years or more.
Manufacturing and research has been disappearing since the late 70s. Being shipped over seas or just closing down. Not just the large plants but many of the smaller ones also and in nearly every area.
You simply cannot have a national economy based solely on cheesy housing and cheesy burgers and credit cards. Which is what we have been trying to do while funneling the money to Wall Street slime bags who just stick it in some off shore bank to avoid paying their fair share of taxes.
C
July 9, 2009 1:52 PM | Reply | Permalink
Your comment seems off point. I wasn't talking about supporting the banks (just the opposite). The stimulus was meant to turn around the economy and create jobs. It hasn't really done either one yet. That's because most of it doesn't kick in until next year. My point is that we should be establishing a payroll tax holiday that will have an IMMEDIATE stimulative effect.
July 9, 2009 2:09 PM | Reply | Permalink
Among the facts you're stretching, MCB, is representing yourself as having a clear understanding of the situation and the way out of it.
I don't have any problems with criticizing Obama.
I DO mind people who try to blow smoke up my ass.
(Whether it's in the act of criticizing POTUS or not.)
A payroll tax holiday would put more money into the pockets of consumers(those that aren't un- or under-employed).
Which, they will promptly save most of - perhaps in banks, which rather than lending them will use it to shore up their capital reserves or avert FDIC intervention.
None of which will help to get more money moving in the economy.
And would require massive spending cuts in stuff like infrastructure(LOL - like we're not already a couple $trillion in the hole in deferred maintenance per the ASCE) OR even greater deficits and debt.
And you call that stimulative? Remotely helpful in the short OR long term?
Enough with the smoke.
July 9, 2009 8:46 PM | Reply | Permalink
I believe that the extra cash to the consumer will help them make their car payments, make their mortgage payments, etc. When we make our payments those bad loans turn into good loans and the banks will increase their lending.
A payroll tax holiday of course would have costs. But it's a better alternative than a second round of TARP or a second round of "stimulus"
I'm not saying that this is the only route to take, it would be just one of the things we should be doing.
We also need to help the states, but the current plan makes no sense. Why is the Federal government forcing the states to cut hospital services and instead fix potholes? Congress will only give the states money for new public works projects.
July 10, 2009 6:33 AM | Reply | Permalink
The tax cuts we got over the past 8 years didn't do the trick either. Oh sure a little more money will make us FEEL better; but will it SOLVE the problem? NOPE.
This mess took awhile to get into, it's going to take awhile to get out of it.
As for bailing out banks -- Bush admin did this too.
Getting credit flowing again IS the one of the keys to fixing it. Consumer confidence is DOWN and people like you and the Republican Party constantly reminding folks how BAD things are - isn't helping.
Half of being SICK is the WORRY about what COULD be wrong.
Will a tax cut, rebate or payroll tax cut help boost consumer confidence - for about a month or two, yes. What we need to see is an economy stabilizing, loss of jobs slowing down and credit flowing.
Giving consumers time to gain confidence and begin borrowing (spending) takes longer than 5 months - sorry.
July 8, 2009 9:59 PM | Reply | Permalink
"What we need to see is an economy stabilizing, loss of jobs slowing down and credit flowing."
Well so far the stimulus plan hasn't been very successful in getting the loss of jobs slowing down. Unemployment is ticking higher.
And when Obama rushed the stimulus through, his administration said that if nothing was done, then unemployment would hit 8.5% by April 2009, and WITH the stimulus unemployment would only get to 7.8%.
So they were selling us on the hope that the stimulus would have an immediate impact on jobs
July 9, 2009 2:18 PM | Reply | Permalink
You know how it goes. The Republicans want blood, and the Media wants a controversy. Democrats, however, have no excuse for whining.
July 9, 2009 12:14 AM | Reply | Permalink
It's interesting how during the election the point that was made about Obama was explicitly that he was not Bush, that Bush was just the worst thing to happen to this country, evah.
Now that the going's getting tough, coonsey wants to go back to Bush as a benchmark.
Also, it's interesting to note that when Porkulus was being passed, Democrats were all over media talking about the crime against America that any "no" vote was.
At the same time, Loose Lips Biden and Memory Loss Pelosi were telling the country that there was no time to waste debating the merits of Porkulus (kinda like what Waxman is saying now about cap-n-tax).
Big Government Democrats and Republicans took an $800 billion gamble and shoved any dissent.
Pelosi said it was about 4 things: jobs, jobs, jobs and jobs. In fact, Obama and Pelosi both argued that the purpose of Porkulus was to reduce employment IN NEAR TERM.
Remember those charts from CBO that showed unemployment with and without Porkulus?
So coonsey - you can whitewash it all you want, but given the specific promises and objectives the Democrats set for Porkulus - it failed spectacularly.
And it doesn't help your cause to suddenly start treating Bush as a model to compare everything to.
Well, except perhaps on war on terror and defense.
July 9, 2009 8:25 AM | Reply | Permalink
"Memory Loss Pelosi"
http://www.huffingtonpost.com/2009/07/08/panetta-acknowledged-cia_n_228321.html
Perhaps her memory isn't so bad after all.
July 9, 2009 9:10 AM | Reply | Permalink
I'm REMINDING GOP folks how long it took REPUBLICANS (Bush Admin) to GET THINGS DONE (or signed and accomplished..ie taxCUTS) and how those taxCUTS didn't apparently work because we ended up with the worse recession EVER since the Great Depression.
Reminding folks how long it takes to get ANYTHING done, whether in a business or in government and reminding them of the results is apparently needed because people like you think (foolishly) that 4.5 months is plenty time to get JOBS JOBS JOBS JOBS.
Pres Obama DID NOT say it would CREATE jobs within 5 months -- what he said was...."None of this will be easy," he said. "The road to recovery will not be straight. We will make progress, and there may be some slippage along the way." He also said it would create OR SAVE 3.5 million jobs.
Try all you want to distort the facts Lalo but it's not going to work. Americans may be desperate for help but they're not stupid.
July 9, 2009 10:16 AM | Reply | Permalink
"Pres Obama DID NOT say it would CREATE jobs within 5 months..."
- "The Obama administration estimates that the economic stimulus plan will create or save 750,000 jobs by early August, a senior administration official said on Monday."
That was back in May.
http://money.cnn.com/2009/05/11/news/economy/stimulus_jobs/index.htm?section=money_latest
Later in June:
"The White House says the figure is in line with its projection that the $787 billion recovery act has created or saved 150,000 jobs in the administration's first 100 days."
http://money.cnn.com/2009/06/26/news/economy/how_many_stimulus_jobs_created/index.htm?section=money_topstories
So Coonsey: get off the KoolAid, ok?
July 9, 2009 2:06 PM | Reply | Permalink
The administration also said that if we didn't pass Stimulus 1.0, then the unemployment rate would hit 8.5% by April. However, if we passed the Stimulus bill, unemployment would only go to 7.8% by April 2009.
July 9, 2009 2:30 PM | Reply | Permalink
Yeah, they were too busy listening to sensible liberals and market apologists - and trying to be bipartisan.
There were a lot of people who at the time claimed the plans were overly optimistic in their estimates of job losses and economic contraction.
Turns out the folks who believed the stimulus package needed to be much larger than it was, and, let's face it - much larger than could have been passed with Blue Dog and Republican opposition, were correct in their suggestions as to how far we had yet to fall.
No shit, they made some mistakes.
Among them, listening to folks like yourself.
I get that you want instant gratification, "make it better, NOW!"
Too bad. It doesn't work that way - in fact, as the decade preceding today shows, it makes things worse.
July 9, 2009 8:54 PM | Reply | Permalink
It's not about instant gratification. It's about better ways to design the "stimulus".
By the way - did you respond to my point about taxing the "rich"?
July 10, 2009 6:35 AM | Reply | Permalink
this info supports coonsey.
July 9, 2009 4:06 PM | Reply | Permalink
What part of "Create OR Save" do you not understand Lalo?
You continue to leave off the OR SAVE part of his statements.
July 9, 2009 9:03 PM | Reply | Permalink
How can one measure "saving" jobs? If I didn't get fired yesterday does that mean that Obama "saved" my job?
I must give Obama credit for coming up with the "saved" concept - Bush wasn't smart enough to come up with a gimmick like that.
Since the stimulus was passed we've lost over a million jobs. But invoke the magic words of "jobs saved" and presto! The stimulus is working because we've "saved" a couple hundred thousand jobs.
July 10, 2009 6:43 AM | Reply | Permalink
Actually Obama did say that with the stimulus, unemployment would only hit 7.8% by April 2009. Without a stimulus, unemployment would hit 8.5% by April 2009.
July 9, 2009 2:22 PM | Reply | Permalink
Here it is right from the horses mouth. Report from the Administration showing how unemployment in 2009 will be lower if the Stimulus gets passed.
http://otrans.3cdn.net/ee40602f9a7d8172b8_ozm6bt5oi.pdf
July 9, 2009 2:41 PM | Reply | Permalink
Apparently you are ignorning what Bush said over the past 8 years about CREATING JOBS and STIMULATING the ECONOMY -- read the post again,
"Mr. Bush hailed the legislation as a job-creating measure that would also put much-needed cash in the hands of working people."
and this...
"Our pro-growth policies stand in stark contrast to those in Washington who believe you grow your economy by raising taxes and centralizing power," said Mr. Bush, who was joined at the signing ceremony by Vice President Dick Cheney. "They are wrong. Our pro-growth economic policies are working for all Americans."
Obama at least admitted to possible bumps in the road..."None of this will be easy," he said. "The road to recovery will not be straight. We will make progress, and there may be some slippage along the way.".
Why are you so willing to give Bush 8 years and 4-5 tax cuts later --ending with the worst recession in DECADES --credit for ANYTHING? But you can't give Obama and the Dem's even ONE YEAR to fix the worst mess we've had in years?
As for excepting BAD comments about the Obama admin, I've done so myself many times already over his foreign policy/torture issues.
July 9, 2009 9:13 PM | Reply | Permalink
Who brought Bush into this discussion? Why do you keep comparing this to other situations? The stimulus package and its impact on job creation has nothing to do with Bush. I'm focused on our current situation and not, for example, whether the 2003 tax cuts helped get us out of 2001-2002 downturn.
I would give Obama more slack if he didn't talk about how urgent it was to pass a bill and how it would impact unemployment in 2009.
Your argument is that at least Obama admitted that there would be bumps in the road and Bush/McCain/Palin didn't? That is the lamest thing I've heard you write in a long time. McCain said that the "fundamentals of our economy are strong". And what Obama said wasn't much different - "We remain the most prosperous, powerful nation on Earth. Our workers are no less productive than when this crisis began. Our minds are no less inventive, our goods and services no less needed than they were last week or last month or last year. Our capacity remains undiminished." Sounds like they both said the same thing to me.
But as long as he "warned" us therefore that makes it ok to pass a Stimulus bill that was hailed to be all about "jobs jobs jobs" but really wasn't?
July 10, 2009 6:24 AM | Reply | Permalink
You AGAIN miss the POINT of my post. I pointed out the TIME it took to PASS and GET MONEY OUT from tax cuts during Bush years to show how LONG it can take to actually IMPLEMENT a bill. In other words, the stimulus bill will take MORE than just 4.5 months to WORK....DUH!
I don't know about YOUR State but in mine, ALREADY jobs have been SAVED and CREATED because of the stimulus bill being passed so URGENTLY. Just think what the unemployment rate would be if they hadn't passed that bill. You think 10% is bad, think about 15-20%.
I defy you to prove that ANY bill can be passed and implement and actually CAUSE a difference within 5 months --- ANY?
July 10, 2009 11:20 AM | Reply | Permalink
You really like using all caps, huh?
You made many points, and one was that Obama never made any statement about how quickly the stimulus would impact unemployment. And you pushed back by saying it will take more than 4.5 months to work. I think you even used the term "DUH" (how old are you, by the way?).
I don't disagree that the stimulus as structured will take time since a lot of the money hasn't been spent. But the President and his staff told us something different.
July 10, 2009 11:53 AM | Reply | Permalink
Do you REally know how much you'll be making 6 months from now? Really? Probably not, because as we all know, anything could happen, illness, a death in family, loss of job, company cuts pay, etc..
You can make a Guess -- but you never REALLY know what you'll bring home pay will tomorrow, let alone 3-6 months from now.
And yet you claim Obama LIED about loss of jobs? Hell, if we had listened to the GOP and Bush, NO the unemployment rate ACCORDING to THEM would have been 4%. According to Bush, John McCain and Sarah Palin - the economy was on SOLID GROUND!
At least Obama TRIED to make a good estimate at what it might be, so what if he UNDERESTIMATED, he at least WARNED us it was going to be BAD -- Bush, McCain and Palin didn't.
July 9, 2009 10:46 PM | Reply | Permalink