Obama’s Stimulus Plan Has All The Signs Of Failure

Even if it were not for the fact that President Barack Obama has turned his eye to a devastating energy policy that could further reduce domestic manufacturing, or a health care reform that “significantly expands the federal responsibility for health care costs”, the administrations ill-considered “stimulus” bill has the federal public debt sitting on a staggering precipice. The deficit crossed the trillion dollar threshold on Tuesday, achieved in just half a year.

The jobs promised by Mr.Obama are nowhere to be found. The stimulus bill aimed at keeping unemployment at 8%, has risen to 9.5% and is heading higher. This is the highest level of unemployment since 1983, for some people it’s too long ago to even remember. But the advisers who crafted the bill, Christina Romer and Jared Bernstein, have by contrast done quite well for themselves. And even as the country falls further and further into the tank, Ms.Romer talks about how much worse it would have been without the stimulus. The administration has even claimed that it had “saved” 150,000 jobs, but even if one accepted such a dubious number, it’s nowhere close to the promises made back in January during the “hopenchange” movement.

The rather insane thing in all of this, is the idea that Americans might be facing the sequel to the first horror movie: Stimulus II. Congressional Democrats have begun to talk about a possible second bill, explaining that the first one wasn’t implemented properly. But by doing so, does that not acknowledge that the first stimulus round did nothing to provide jobs or stimulate the economy? Some banking institutions and those “too big to fail” got rescued, but little else has been achieved in the short term. And even if we admit that the first one is too early to recognize any potential benefits yet, would that not indicate that a second stimulus bill would be imprudent at this time?

As Phil Kerpen writes, this isn’t really even the second stimulus plan being floated in Washington. George Bush also tried his own stimulus in his final year, and we all know how well that worked out. $152 billion was spent, and the economy still went into the sewer. The main problem with the concept behind a political “stimulus” model for a free market economy, is that all you’re doing, at best, is moving money around. We now know that the Obama plan was far too optimistic and unrealistic. We know that while some of the money was spent by the government, vast portions of it was simply thrown out the door without oversight, in the hopes that the speed of delivery would help. And finally, we know that ultimately all that’s been accomplished is a heavier burden on the public debt:

It’s actually pretty simple economics. The government does not create resources by spending; it simply moves them around. Every dollar the government spends has to come from somewhere, but the only three options all make people poorer. Higher taxes take money out of people’s pockets, and deny them the freedom to spend, save, or invest that money according to their own values. Simply printing money is inflationary, and destroys the value of every American’s savings, slams people on fixed incomes with higher prices, and creates a huge hurdle to new investment.

The Congressional Budget Office forecasts a $1.85 trillion deficit for this year, and any more spending would only pile the debt even higher. In the long-run, rising interest rates will make it more difficult to pay back the public debt, hurt business and economic growth, and ultimately defeat the logic behind a “stimulus” plan in the first place.

PETA Sells Veggies With Meat [Maybe NSFW]

UPI Photo/Kevin Dietsch

PETA [People for the Ethical Treatment of Animals] put on an event on Capitol Hill, Washington D.C., yesterday to promote veggie dogs. Part of their promotion was in using two Playboy playmates wearing vegetable bikinis. Puts a whole new meaning to your mothers advice “eat your veggies, they’re good for you.”

PETA is notorious for using scantily clad women to peddle their meat abstinence, but turning to the porn industry is really an intereresting move. I don’t imagine that the kind of people who read Playboy are also the kind to dine on Herbed Ricotta with Roasted Cherry Tomatoes, but hey… I could be wrong.

Vargas To Sotomayor: “We Did Not Ask For Sympathy Or Empathy”

Firefighter Lieutenant Ben Vargas got his chance to vent today during Sonia Sotomayor’s Supreme Court confirmation. Mr.Vargas was part of a suit against the city of New Haven for “reverse discrimination” when it threw out the results of an employment exam because no African-Americans scored high enough to qualify for a promotion. A federal court judge first ruled against the firefighters in a 78-page decision. On appeal, Ms.Sotomayor and two other judges dismissed the appeal in a single paragraph summary order.

“We did not ask for sympathy or empathy,” said Lt. Ben Vargas. “We asked only for even-handed enforcement of the law.”

Two weeks ago, the U.S. Supreme Court reversed appeals, and ruled in favour of the firefighters. Ben Vargas, in particular, is an interesting subject in this story because as the only minority in the 18-firefighter suit, his test results were also thrown out. He also angered elements of the Hispanic community by testifying against Ms.Sotomayor’s confirmation:

“To come and testify against her being nominated is really damaging to all of the people who have their hopes” lifted by the judge’s nomination. Sotomayor’s story — a Puerto Rican-American woman raised by a single mom in Bronx public housing — is about the American dream, said Rodriguez-Reyes. She’s an example that “you can achieve anything.”

She said Vargas’ actions have “gone against” the “entire Hispanic community.”

But Mr.Vargas has an answer for those people in his speech to the Senate.

“I am Hispanic and proud of the heritage and background that Judge Sotomayor and I share,” he said. “But the focus should not have been on me being Hispanic, the focus should have been on what I did to earn a promotion.”

Don’t Be So Quick To Turn Page On Budget Officer

Stephen Harper rejected the advice of Parliamentary Budget Officer Kevin Page in a report last week that called for changes to the current government plan that he says will end up in structural deficits extending beyond 2013-14. Calling Mr.Page’s report, that advises either cutting spending or raising taxes, “dumb”, surprised a few people with his candid rejection of the non-partisan bureaucrats findings, a position that his own government created just 15 months ago:

“We will not start raising taxes and cutting programs. That’s a very dumb policy and, to the extent, frankly, that the parliamentary budget officer suggested it, it’s a dumb position,” he said.

But is Mr.Page’s assessment of Canada’s budgetary finances erroneous enough to warrant the pejorative? Not so, according to several economists who agree with the report. Toronto TD chief economist Don Drummond predicts an even more dire warning for the government, expecting a $19.4 billion deficit in 2013-14, the year that Jim Flaherty says we’ll be back in black. The only way to reach the numbers proposed by the government is the one thing that our Conservative government won’t do: cut spending. And not just current spending levels, but just limiting spending increases to 2%. The average annual spending increases since 2005 has been 6.7%, three of those years under the Conservative government.

Another “financial watcher”, Dale Orr, says that Kevin Page’s predictions are “very reflective” of current economic thinking:

“The government is off base in criticizing it as too pessimistic. Any slight differences between [Mr.Page's] economic forecast and the current consensus of private sector forecasts would not significantly affect any of the major conclusions of the report.”

Mr.Orr also concludes a budget deficit by 2013-14 of $15-billion according to the current government budget, saying that Mr.Flaherty’s budget doesn’t take into account continuing job losses which will weaken the nominal GDP, the tax base that cushions the federal coffers.

This leaves the question, posed by journalist Alec Bruce: Do we need a Parliamentary Budget Office if the Prime Minister thinks his opinions are “dumb”?

It’s funny, when the Congressional Budget Office Director Douglas Elmendorf in the United States recently condemned the U.S. Health Care overhaul as being potentially bankrupting, nobody was questioning his professional integrity. As Mr.Bruce writes, “if Page interprets his job description more broadly than some office holders would like — but clearly within the spirit of accountability that Harper intended — isn’t that their problem?”