Tag Archives: Stimulate

MUST-READ: Why Obama’s spending took us to 10% unemployment

First, let’s see Obama’s record on economic policy. (H/T ECM)

$1,650,971,205,167 added to the national debt, bringing the total to $7.5 trillion.

99 banks taken over by the Federal Deposit Insurance Company.

684 banks receiving support from the Troubled Asset Relief Program that doesn’t buy troubled assets.

11.2 percent: the percentage of the federal deficit to GDP. This is the highest that ratio has been since Japan surrendered in 1945.

$164 billion spent out of the entire $787 billion in stimulus funding in the American Recovery and Reinvestment Act. Most of this has gone to Medicaid, unemployment and the Making Work Pay Tax Credit.

And, now, Keith Hennessey takes a look at Obama’s record on reducing unemployment.

Here’s the graph of total employment since Obama took office:

Employment has declined steadily since Obama took office
Employment has declined steadily since Obama took office

Now, you may be hearing Obama say that we’ve turned the corner on unemployment. For instance, look at how the White House is spinning this graph.

Hennessey writes:

Check out the slightly different slopes of the three line segments indicated by arrows.  The purple arrow shows a segment that slopes downward slightly less than the yellow arrow.  A mathematician would say the shift from yellow to purple was an inflection point, shifting the curve from convex to concave.

This is what led the President in early August to say the economy was “pointed in the right direction.”  The red arrow shows the worse news of last Friday’s jobs report, with a line that slopes downward slightly more sharply.  The curve shifted back to a convex shape, in which the slope was more sharply downward than in the prior month.

If you’re saying to yourself, “That’s ridiculous!  They’re all going down, and the differences in slopes are almost too hard to see!” then you’ve got my point.

And below I’m going to explain why Obama’s massive government spending created this worsening unemployment.

Economics in One Lesson

We are going to have to pay for all this spending on Obama’s favored special interest groups eventually, and that means that taxes will go up, or that the value of the dollar will go down, due to inflation. It has to be one or the other or both. There is no third way. When employers see that higher taxes or inflation are coming, they stop hiring people because they know that higher taxes and/or inflation kills the economy.

Perhaps it is time to review Henry Hazlitt’s Economics in One Lesson, chapter 4, entitled “Public Works Mean Taxes”.

Excerpt:

Therefore, for every public job created by the bridge project a private job has been destroyed somewhere else. We can see the men employed on the bridge. We can watch them at work. The employment argument of the government spenders becomes vivid, and probably for most people convincing. But there are other things that we do not see, because, alas, they have never been permitted to come into existence. They are the jobs destroyed by the $10 million taken from the taxpayers. All that has happened, at best, is that there has been a diversion of jobs because of the project. More bridge builders; fewer automobile workers, television technicians, clothing workers, farmers.

And consider Chapter 5 as well, entitled “Taxes Discourage Production”.

In our modern world there is never the same percentage of income tax levied on everybody. The great burden of income taxes is imposed on a minor percentage of the nation’s income; and these income taxes have to be supplemented by taxes of other kinds. These taxes inevitably affect the actions and incentives of those from whom they are taken. When a corporation loses a hundred cents of every dollar it loses, and is permitted to keep only fifty-two cents of every dollar it gains, and when it cannot adequately offset its years of losses against its years of gains, its policies are affected. It does not expand its operations, or it expands only those attended with a minimum of risk. People who recognize this situation are deterred from starting new enterprises. Thus old employers do not give more employment, or not as much more as they might have; and others decide not to become employers at all. Improved machinery and better-equipped factories come into existence much more slowly than they otherwise would. The result in the long run is that consumers are prevented from getting better and cheaper products to the extent that they otherwise would, and that real wages are held down, compared with what they might have been.

There is a similar effect when personal incomes are taxed 50, 60 or 70 percent. People begin to ask themselves why they should work six, eight or nine months of the entire year for the government, and only six, four or three months for themselves and their families. If they lose the whole dollar when they lose, but can keep only a fraction of it when they win, they decide that it is foolish to take risks with their capital. In addition, the capital available for risk-taking itself shrinks enormously. It is being taxed away before it can be accumulated. In brief, capital to provide new private jobs is first prevented from coming into existence, and the part that does come into existence is then discouraged from starting new enterprises. The government spenders create the very problem of unemployment that they profess to solve.

What Obama did, in effect, is to fire all of those millions of private sector people, so that he could reward the people who voted for him. And jobs are created far more efficiently by small businesses than they are by big government. What creates new jobs is entrepreneurs with ideas who hire people. And government spending diverts money away from these efficient entrepreneurs and towards inefficient government bureaucracies.

Democrats say they rescued the economy, Republicans ask where are the jobs?

Barack Obama will announce today “We rescued the economy”. (H/T ECM, Breitbart TV, Hot Air, Gateway Pundit)

Gateway Pundit adds:

President Disaster will quadruple the US budget deficit his first year in office. He will reportedly spend $23.7 trillion to “fix” the economy… or bankrupt it by next year.

…Government Motors sales drop 22%. (H/T ECM, Gateway Pundit,

Meanwhile, 134 House Rebublicans ask “Where are the Jobs?”.

Gateway Pundit adds:

President Obama and democrats in Congress, of course, promised that their stimulus would prevent unemployment from rising about 8%. Today it is at 9.7% and House Republicans who unanimously opposed the Stimulus Bill want to know where are the jobs?

The unemployment rate during the Bush years was 5.27%.
President Disaster’s unemployment rate is averaging above 8.6%.

Jim Demint contends with the leftist media trying to get the word out.

Pundit and Pundette give him a gold star!

They’ve got the transcript, too!

Excerpt:

LAUER: . . . But over the past couple of days, I don’t have to tell you, you’ve ignited a firestorm, and people are saying that you are playing pure politics with this issue. How do you respond?

DEMINT: Well, it has nothing to do with politics or it’s certainly not personal. But, but the President’s policies have not matched up to his promises so far. We saw that in this giant stimulus, his trillion dollar stimulus that has stimulated the government, but really cost American jobs and, and, and loaded lots of debt on top of future generations.
LAUER: But, but sticking to health care reform, let, let me, you know, give you your own words here. You, you were addressing the group Conservatives for Patients Rights about the health care debate and you said quote, “If we’re able to stop Obama on this, it will be his Waterloo. It will break him.” Now are you rallying conservatives to the cause of health care reform? Or are you rallying conservatives to the cause of breaking a president?

DEMINT: Oh, we need to put the brakes on this President. He’s been on a spending spree since he took office. And we need health care reform. Unfortunately, when the President was in the Senate, I’ve probably offered more health care reform proposals than anyone in the Senate. And the President voted against every proposal that would have made health insurance more available and more affordable to people. His goal seems to be a government takeover, not making insurance more available. So I do think we need to stop the President on this. We need to stop his policy, because if we allow him to continue to ram things through Congress before we even get a chance to read them.

LAUER: But-

DEMINT: Matt, I just brought one of the bills this morning. I mean, if you look at this bill, it’s one of the three bills that we’re gonna have to look at.

LAUER: It’s a complicated issue. There are a lot of details in that bill.

DEMINT: Well why do we need to pass it in two weeks before we go home in August?

LAUER: Well that’s, that’s a good question. And I’m gonna get to that in a second. But, but the words you chose were very specific. “It could be his Waterloo, it could break this President.” I, I guess the obvious question is, it wouldn’t break your heart if you break this President, would it?

DEMINT: Well, again, it’s not personal, but we’ve got to stop his policies, Matt. The policies are not matching up to the promises. They’re loading trillions of dollars of debt onto the American people. And the thing is we need real health care reform. I’ve introduced proposals that would help individuals own their own health insurance policies if they don’t get it at work.

LAUER: Right.

DEMINT: There are a lot of ways to do this without a government takeover and a government plan.

LAUER: And I read, I read some of your plan. You wrote it in an op-ed, and I, and I did read that, and would encourage people to go see that. Is the deadline dead, Senator?

DEMINT: It appears to be, and I hope it is. And that’s what I mean, the Senate is supposed to be the body that deliberates and debates and actually reads bill, bills. You know, I hear that more than anything else, as I go around the country. Why don’t you guys read the bills before you pass them? There are a lot of things in these bills that are gonna alarm the American people. I’m afraid the President knows that. He wants to push it through before we’re able to take a look at what’s really in it. And that shouldn’t happen in Congress. This doesn’t take effect for four years, Matt. We don’t need to pass it in two weeks. It’s 20 percent of the American economy.

LAUER: Right.

DEMINT: It’s one of the most personal issues that we deal with as Americans. The government shouldn’t take it over and we shouldn’t pass a bill in two weeks.

LAUER: Senator Jim DeMint. Senator thanks for joining us this morning. We appreciate your time.

DEMINT: Thank you Matt.

Worst. President. Ever.