Tag Archives: Stimulus

How do Democrat policies stimulate the economy?

Consider this Washington Times article to see how it works. (H/T Gateway Pundit)

Excerpt:

The Obama administration revealed last week that as much as $16.1 million from the stimulus program is going to save the San Francisco Bay Area habitat of, among other things, the endangered salt marsh harvest mouse.

That has revived Republican criticism that the pet project was an “invisible earmark” in the massive spending bill for Mrs. Pelosi, whose San Francisco district abuts the Bay, and epitomizes what Republicans say is the failure of stimulus spending so far to help an economy still shedding jobs.

“Lo and behold, the government has announced that the mouse is getting its money after all,” House Minority Leader John A. Boehner, Ohio Republican, said, standing beside a poster of the furry varmint. “Speaker Pelosi must be so proud.”

Mrs. Pelosi’s office was quick to dismiss the criticism.

My preferred stimulus was to spend under $400 billion and to temporarily suspend the employer portion of payroll taxes, so that American employees would go on sale. When people have jobs, then they are comfortable spending money. But Obama and Pelosi preferred to spend the money on mice. American workers or mice? Which one stimulates the economy?

Earlier this week I wrote about how well the first two stimulus bills worked, and how the Democrats would like to pass a third stimulus bill.

Raising taxes

Democrats also think that raising taxes on businesses and individuals will stimulate the economy. See, when the unemployment rate goes to 9.5%, and everyone has to pay more for electricity and gas, then Democrats believe that people will spend more.

Consider this article from Politico which lists some of the ideas they are considering. (H/T Michelle Malkin)

Excerpt:

— Broaden the 1.45-percent Medicare tax on earned income to “passive income,” which could include money from capital gains, rental properties and businesses that do not require direct participation. This could raise $100 billion.

— Levy a five-percent surtax on individuals who earn more than $500,000 and couples that make $1 million.

— Tax health benefits at a higher level than had been considered. Two scenarios are in play. Taxing plans worth more than $20,300 for a family and $8,300 for an individual could raise $240 billion. Increasing the cut-off to plans worth more than $25,000 would bring $90 billion.

— Capping the tax break on itemized deductions at 28 percent, as President Barack Obama had proposed, or freezing the top deduction rate at 35 percent when the Bush tax cuts expire in 2010. The first scenario would raise $168 billion, while the second would collect $90 billion.

— Issue tax credit bonds to pay for the proposed Medicaid expansion, raising $75 billion.

— Charge fees to pharmaceutical manufacturers, bringing in as much as $20 billion, and insurance providers, raising $75 billion.

– Raise taxes on sodas and sugary drinks. A 3-cent hike could pick up $30 billion, and a 10-cent hike could make $100 billion. This one already appears out of favor: Many senators have specifically ruled out the sugar tax, and a Senate Democratic source said it was the one option that was clearly not gaining traction with committee members.

Try to think about what effect this will have on the person who rents you your apartment, who supplies your employer with capital, or who pays your salary. Try to think about whether you will pay more or less for the goods and services you need when the people who provide them are attacked by the government. Try to think about what effect increased borrowing will have on the prosperity of your children.

Obama’s federal aid overwhelmingly given to Democrat-supporting counties

USA Today reports. (H/T Gateway Pundit)

Excerpt:

Billions of dollars in federal aid delivered directly to the local level to help revive the economy have gone overwhelmingly to places that supported President Obama in last year’s presidential election.

That aid — about $17 billion — is the first piece of the administration’s massive stimulus package that can be tracked locally. Much of it has followed a well-worn path to places that regularly collect a bigger share of federal grants and contracts, guided by formulas that have been in place for decades and leave little room for manipulation.

“There’s no politics at work when it comes to spending for the recovery,” White House spokesman Robert Gibbs says.

Counties that supported Obama last year have reaped twice as much money per person from the administration’s $787 billion economic stimulus package as those that voted for his Republican rival, Sen. John McCain, a USA TODAY analysis of government disclosure and accounting records shows. That money includes aid to repair military bases, improve public housing and help students pay for college.

The reports show the 872 counties that supported Obama received about $69 per person, on average. The 2,234 that supported McCain received about $34.

This reminds of Obama’s doings in Chicago.

$18 Million Dollar Contract goes to Democrat-supporting IT firm

David Freddoso broke a story today about an $18 million dollar IT contract awarded to a firm that donates exclusively to Democrat House Majority Leader Steny Hoyer. (H/T Hot Air)

Here is an excerpt from the Washington Examiner story:

ABC reports this morning that the Maryland firm Smartronix has won what seems like an enormous $18 million contract to re-design the Recovery.gov website. Approximately $9.5 million would be spent by January in order to make “Recovery 2.0” out of the site that is supposed to track the spending of federal stimulus funds in detail.

Smartronix, a medium-sized Maryland-based firm (over 500 employees) founded in 1995, boasts a large number of government clients, mostly military. The company appears to have just one important political connection: according to FEC records, Smartronix president, Mohammed Javaid, vice president Alan Parris, and partner John Parris have together given $19,000 to House Majority Leader Steny Hoyer (D) since 1999. There is no record of a Smartronix employee contributing to any other federal politician.

UPDATE: Smartronix got $260 million in other federal contracts

Smartronix has received more than $260 million in federal contracts since the year 2000, with the top awarding agencies being the U.S. Navy, Federal Technology Service, U.S. Air Force, U.S. Minerals Management Service, and the Office of Policy, Management and Budget (not clear which department or agency issued this contract), according to USASpending.gov.

Nearly $180 million of the contracts awarded to Smartronix during the period 2000-2009 were awarded on less-than-competitive basis, including $21 million for non-competitive awards. Another $33 million was awarded in competitive processes in which Smartronix was the sole bidder.

And one of my co-workers noticed that this even got posted on SlashDot with 341 comments so far!

The Republican response

House Republicans released this new ad about the staggering 9.5% unemployment rate.

H/T Gateway Pundit.

Democrat Majority Leader Steny Hoyer says we may need another massive stimulus

Budget Deficit
Budget Deficit

The first two spending bills didn’t work, so we just need to keep trying harder to spend our way out of debt!

Check out this story from Reuters. (H/T Gateway Pundit)

Excerpt:

U.S. leaders should be open to the possibility of a second stimulus package to jolt the economy out of a recession still causing job losses, House of Representatives Majority Leader Steny Hoyer said on Tuesday.

…President Barack Obama led the charge for a two-year $787 billion stimulus package that his fellow Democrats who control Congress pushed through the House and Senate in February and he has argued it would help create or save up to 4 million jobs.

Create 4 million jobs? He’s lost 2.5 million jobs so far. Maybe he doesn’t know what the word create means?

foundry_recovery_plan_full

Michelle Malkin lists a few more of the Democrats in favor of more government spending.

Excerpt:

As you all have heard, Laura D’Andrea Tyson, the Clinton economic adviser now on Team Obama, has floated a second stimulus plan. Democrat Sen. Sheldon Whitehouse of Rhode Island has echoed the call. Other Democrats are open to it.

Only 10 percent of Porkulus One has been spent, misspent, or gone untracked, but who’s counting?

I’ve uploaded two documents for your perusal this morning: The first is a GAO report on stimulus spending by states and localities, which will be released this morning at a House oversight hearing.

You can read the whole thing here.

Bottom line: The funds are not being spent on what they’re supposed to be spent on. States made up their own criteria for spending. School and transportation bureaucrats preserved their own jobs instead of “stimulating” others.

The second document is a GOP memo dissecting the failures of Porkulus One.

You can read the whole thing here
.

Michelle lists a few of the key findings from the second document.

National Debt
National Debt

Why didn’t the massive Democrat spending spree work?

This is lesson one of Economics 101. When government spends money, the money comes out of the private sector. Government is not even close to allocating capital and producing wealth as efficiently as the free market system.

Ed Morrissey explains:

Here’s where we get into the “saved or created” dodge of the Obama administration.  The Porkulus money may have “saved” jobs, but they were government jobs, not the private sector.  Most government employees have union representation, primarily by the SEIU.  The only jobs Porkulus may have saved were those of bureaucrats in state government, and mostly to make sure the unions stay on the side of the Democrats.

None of that money went into promoting growth in the private sector, which is why unemployment skyrocketed.  Capital stayed out of the market, in part because of fears of confiscatory tax increases and in part because of the amount of regulation threatened by the Obama administration, and what capital was left will get eaten up by the cost of Porkulus eventually.  And the GAO says it will take months just to get effective reporting on how that money gets spent, regardless of where it goes.

Obama’s support is now virtually 50-50 according to Rasmussen Reports.But he won’t care, because he’s the Obamessiah! As long as the left-wing fascists and terrorists love him, who cares what economically-literate peons like us think?