An Investors.com article entitled “The ‘Stimulus’ Actually Raised Unemployment“ should be required reading for every American:
By ALAN REYNOLDS Posted 02/19/2010
President Obama seized on the one-year anniversary of the American Recovery and Reinvestment Act (ARRA) as an opportunity to take credit for the belated and tenuous economic recovery.
But the economy always recovered from recessions, long before anyone imagined that government borrowing could “create jobs.” And we didn’t used to have to wait nearly two years for signs of recovery, as we did this time.
A famous 1999 study by Christina Romer, who now heads the Council of Economic Advisers, found the average length of recessions from 1887 to 1929 was only 10.3 months, with the longest lasting 16 months.
Recessions lasted longer during the supposedly enlightened postwar era, with three of them lasting 16 to 21 months.
Keynesian countercyclical schemes have never worked in this country, just as they never worked in Japan.
The issue of “fiscal stimulus” must not be confused with TARP or with the Federal Reserve slashing interest rates and pumping up bank reserves.
One might argue that those Treasury and Fed programs helped prevent a hypothetical depression, but it’s impossible to make that argument about ARRA.
The “fiscal stimulus” refers only to a deliberate $862 billion increase in budget deficits. Importantly, only 23% ($200 billion) was spent in 2009, with 47% in 2010 and 30% in later years (according to the Congressional Budget Office this January).
How could the initial $200 billion have possibly had anything to do with the 5.7% rise in fourth-quarter GDP?
The Keynesian fable presumes that faster federal spending and consumers spending their federal benefit checks were the driving forces in the rebound.
Yet the GDP report clearly said the gain “reflected an increase in private inventory investment, a deceleration of imports and an upturn in nonresidential, fixed investment that was partly offset by decelerations in federal government (defense) spending and in personal consumption expenditures.”
Since federal spending accounted for exactly zero of the only significant increase GDP, how could such spending possibly have “created or saved” 2 million jobs?
The bill was launched last year amid grandiose promises of “shovel ready” make-work projects.
In reality, as the CBO explains, “five programs accounted for more than 80% of the outlays from ARRA in 2009: Medicaid, unemployment compensation, Social Security … grants to state and local governments … and student aid.”
In other words, what was labeled a “stimulus” bill was actually a stimulus to government transfer payments — cash and benefits that are primarily rewards for not working, or at least not working too hard.
First of all, believe it or not, America actually recovered from every single recession in its history without Barack Obama. And the longest recessions we’ve had have occurred during the period when elitist big government liberals were frantically pulling levers and pushing buttons.
UCLA economists have calculated that FDR’s policies actually prolonged the Great Depression by 7 years, a conclusion validated by Roosevelt’s own Treasury Secretary in his remarks to the House Ways and Means Committee:
“We have tried spending money. We are spending more than we have ever spent before and it does not work. And I have just one interest, and if I am wrong… somebody else can have my job. I want to see this country prosperous. I want to see people get a job. I want to see people get enough to eat. We have never made good on our promises… I say after eight years of this Administration we have just as much unemployment as when we started… And an enormous debt to boot!” – Henry Morganthau, FDR’s Treasury Secretary, May 1939 (Morganthau Diary, May 9, 1939 entry, Franklin Presidential Library)
For the record, the unemployment rate the month before this mea culpa had been a sky-high 20.7%. More than six years after FDR’s New Deal, more than 1 out of every five workers was unemployed.
Obama’s own expert (Christina Romer) pointed out that pre-FDR, pre-New Deal, pre-stimulus, and pre-Obama, recessions only lasted an overage of 1o.3 months. This one’s going to last a helluva lot longer in the age of Obama.
The next thing to consider is that the $24 trillion in TARP and other federal programs makes the $862 billion Obama stimulus – with only some $200-plus billion having been spent so far – look laughably puny in comparison. Obama’s claim that his stimulus saved the day is rather like the gnat telling the elephant, “I was pushing too. And it was my efforts that saved the day, not yours.”
Obama’s claim is laughable. And so is the mainstream media that has largely allowed Obama to continue making such a claim.
A third point is that it is simply a fact that all the Obama and Democrat claims of “shovel ready jobs” is just a lie.
From an Associated Press article:
“Even within the construction industry, which stood to benefit most from transportation money, the AP’s analysis found there was nearly no connection between stimulus money and the number of construction workers hired or fired since Congress passed the recovery program. The effect was so small, one economist compared it to trying to move the Empire State Building by pushing against it.”
Which is to say, the only thing that was ever “shovel ready” about the stimulus was bull crap. And the Democrats shoveled it high and deep.
Virtually all of the nowhere near 2 million jobs that were “saved or created” were government jobs. And government jobs are parasitic upon the private sector which taxes PAY for those government jobs. In other words, the government sector doesn’t produce; government jobs exist ONLY because of the productive output of the private sector, and the private sector taxes that provide the money for the government sector and all the bureaucrats on the payroll.
And what we have here is a case in which $862 billion plus interest has been sucked out of the private sector which actually creates the jobs that produce and given to the government. Which means less wealth for the private sector. Which means fewer private sector jobs. Which means less productivity. Which means lower tax revenues which fund the government payroll.
Which means we are in a vicious cycle. Obama is going to need to keep borrowing to pay the government workers on the government payrolls, which means less money for the private sector, which means fewer private sector jobs and less private sector productivity, which means lower tax revenues, which means more borrowing to fund the government sector jobs.
Which is why “Keynesian countercyclical schemes have never worked.”
Let’s look at the gigantic mess that Obama left Illinois in as an example of why this crap doesn’t work, and how Illinois has an $85 billion black hole of unfunded public employee pension obligations which it can never possibly hope to repay.
First of all, the government has a way of rewarding itself at the expense of the private sector over and over again. Thus:
“The level of pension benefits provided by the state’s plans generally exceeds those available in the private sector — i.e., available to taxpayers who pay the state’s bills,” the Commercial Club’s Martin contended in his report.
But at the same time government sector union benefits dwarf those of the private sector employees who pay for those massive benefits, another thing happens: the government, being an inherently amoral and short-sighted enterprise, can’t help but constantly rob Peter to pay Paul in a neverending attempt to eat their cake, and have it, too. Hence the Pension Modernization Task Force investigating the black hole of Illinois pensions was forced to conclude:
“Not wanting to implement dramatic cuts in spending on essential services, the legislature and various governors elected to instead divert revenue from making the required employer pension contribution to maintaining services like education, health care, public safety and caring for disadvantaged populations,” the center argued. “Effectively, the state used the pension systems as a credit card to fund ongoing service operations.”
Which is to say that first the government makes impossible promises, and then it engages in unsustainable and frankly insane policies to play their equivalent of budgetary Whac-a-Mole in order to juggle all the impossible competing spending priorities they’ve been insane enough to commit themselves to.
Which is exactly what happened in the case of the Obama stimulus. It was advertised as a “shovel-ready” package to create jobs, but instead it was “actually a stimulus to government transfer payments — cash and benefits that are primarily rewards for not working, or at least not working too hard.” And so money that was supposed to fund job creation instead went almost entirely to “Medicaid, unemployment compensation, Social Security … grants to state and local governments … and student aid.”
And jobs got sucked out of the economy.
To the extent that the Obama stimulus actually did any good, any benefit will be entirely consumed by the far greater harm it will do to the economy shortly down the road.
Fortunately, the claims that the Obama administration and the Democrat Party have made have been so inherently contradictory and so over-the-top fallacious that only six percent of Americans believe that Obama’s stimulus has created any jobs at all thus far.
Tags: American Recovery and Reinvestment Act, economic recovery, FDR, GDP, government sector, government transfer payments, Great Depression, Illinois, increased unemployment, keynesian, private sector, prolonged, raised unemployment, saved or created, shovel ready, stimulus, stimumlus, TARP
Start Thinking Right 
February 25, 2010 at 10:26 am
Fact: it took longer for this recovery to take hold, and for job losses to end, than is historically normal.
Opinion: The stimulus bill was the REASON it took longer to take hold. An alternative explanation is that this recession was much more severe in the first place.
I would not argue that the stimulus helped. But I would reject this analysis as ideology-driven.
February 25, 2010 at 6:29 pm
Okay. But implicit in your own analysis is that the claim that the stimulus CREATED jobs is itself ideology-driven. And the President of the United States and the Democrat Party are the supreme ideologues in constantly pushing that ideological propaganda. You weren’t upset at the million articles reporting all the jobs the stimulus created, but now you’re bothered over this one piece as ideologically-driven??? I mean, really?
And of course the fact that only 6% of Americans believe that the stimulus has created ANY jobs means that the people have pretty much spoken on the “success” of the stimulus.
Now, you make a claim to a particularly awful recession.
Let’s go back and look at a previous recession that liberals love to overlook (and I’ll quote myself):
Some elements of the Obama recession were far worse than the Reagan recession. But then, some elements of the Reagan recession were dramatically worse than the Obama recession.
Inflation, interest rates, and the overall misery index were far higher for Reagan than anything Obama has seen (though many conservatives are pointing out that he’s going to bring them back with his policies).
And Jimmy Carter not only acknowledged that he didn’t know what to do to solve the problems facing the country, but said he didn’t even know if there WAS a solution.
Let’s be clear here: the liberal model was completely unable to deal with these economy killers. And Carter acknowledged that inability.
Reagan was mocked and scorned up one side and down the other by liberal economists, but he had a solution that worked.
People tend to forget just how bad – and how structurally, systemically bad at that, things were when Reagan took office. Uncontrollable inflation and interest rates were like a cancer, and unemployment was very nearly as high when Reagan took office as it was when Obama took office.
Now allow me to make another point:
The argument that the recession was much more severe than the Obama administration thought is rather ridiculous, given that he repeatedly fearmongered it as the worst thing since the Great Depression. From the Wall Street Journal:
The Obama administration fearmongered the economy as being the worst since the Great Depression to sell the stimulus. And at the same time they confidently asserted that the stimulus would keep unemployment under 8%.
So when the White House claimed the recession “was much more severe” than they thought, what they were saying – based on their own previous claims – was that the recession was actually worse than the Great Depression. Which is absolutely absurd.
And that absurd claim has constantly been accompanied with the charge that it was Bush’s fault – which is the epitome of “ideologically-driven analysis.”
Now, in addition to the Investors article and my own comments on it, there’s some other reasons to argue that the stimulus actually increased unemployment: just look at how our unemployment rate fared against other countries that refused to undergo a massive stimulus.
You can’t ONLY blame the continuing unemployment on the stimulus, of course: Obama has imposed so many regulations and so much uncertainty that businesses are paralyzed, as this article shows.
As a last point, if you want to contemplate “ideologically-driven analysis,” consider the mainstream media which is constantly surprised by bad economic news under this president. They are using their favorite adverb – “unexpected” – every single day in myriad ways. There is this unrelenting mindset that things must be doing terrible because Republicans are running things, and another unrelenting mindset that things must be doing better because Democrats are running things.
Here’s an article on how the media reported on Reagan vs. Obama when the economic numbers were basically identical.
Here’s some other “unexpected” news 14 months into Obama’s presidency:
Bank lending is at its lowest point since 1942, and a terrifying 702 banks are in danger of failing. Unfortunately, that massive Obama stimulus didn’t do a dang thing about this situation – which is precisely why Meredith Whitney predicted that unemployment would rise to 13% or HIGHER.
Another bit of “unexpected” news is that new home sales plummeted. And again, the stimulus wasted money that could have been used to help deal with the real estate situation. Now we’ve blown our wad with the stimulus. The stimulus didn’t solve anything, but now we don’t have any money to fix the REAL problems.
Then there’s the “unexpected news” that consumer confidence is at its lowest point in 27 years. Where’s all that Obama hope and change? Where’s that confidence in the stimulus???
February 26, 2010 at 6:09 am
Michael:
Re-reading your original post, I realize this: I agree with most of it. I object primarily to your title, “Obama Stimulus Actually Raised Unemployment.” That is what is unsupportable.
Our economy has experienced a remarkably swift and strong recovery in the past year. The equity markets are up by 60%, more than $5 trillion. Job losses have gone from 700,000+ per month to even. GDP has gone from severe contraction to significant expansion.
I agree with you that the economy would have started heading in this direction on its own, although most likely more tepidly. I’m not here as a proponent of the stimulus package. If anything, I believe that the TARP and financial system rescue had more to do with the rebound than the stimulus.
Maybe the stimulus did not help. Maybe the money could have been spent better. But to swing the needle all the way to the opposite conclusion — that the stimulus actually RAISED unemployment — seems unsupportable to me. I don’t see anything in your post to support it, actually.
February 26, 2010 at 12:17 pm
I did think of one other thing on my way to work this morning, Mike. “Reagan was mocked and scorned up one side and down the other by liberal economists, but he had a solution that worked.” True. But let’s recall carefully exactly what was Reagan’s solution was.
During his presidency, federal spending increased by 53%. Total was spending $698 billion in 1981; it reached past the trillion dollar mark during his administration — $1,067 billion in 1988. You can look this up on the US Treasury’s website: http://www.fms.treas.gov/mts/MTS.xls
Federal debt on Reagan’s watch went from $907.7 billion (9/30/1980) to $2602.3 billion when he left office (9/30/1988). Yes, part of President Reagan solution was to nearly TRIPLE the US public debt. See it here, direct from the US Treasury: http://www.treasurydirect.gov/govt/reports/pd/histdebt/histdebt_histo4.htm.
So, what’s the difference between Reagan and Obama? Both are raising spending, both have cut taxes, both are presiding over huge deficits and explosive increases in the federal debt. The question isn’t why was Reagan “mocked and scorned up one side and down the other by liberal economists.” The question is why wasn’t he mocked and scorned by conservative economists.
Tax cutting is not conservative if it is merely replaced with debt. In fact, it is the height of irresponsibility and puts us on a most profoundly destabilizing path. That is the lesson to be learned in these times. We are on the brink of disaster because we have spent and spent and spent, and borrowed and borrowed and borrowed, for 25 years. STARTING WITH REAGAN. Obama is just the quarterback we threw in the game, down by five touchdowns entering the fourth quarter.
February 26, 2010 at 4:03 pm
First of all, my title is merely a nearly exact repeat of the Investor article title: “The ‘Stimulus’ Actually Raised Unemployment.“
Let me repeat myself (and yourself:
You say nothing whatsoever about the fact that “Obama Stimulus Actually Lowered Unemployment” is every bit as unsupportable as you say its opposite is. And yet that has been the Democrat narrative – repeated thousands of times on broadcast and in print – for the last year.
Where were you??? Why aren’t you all over the internet attacking those who falsely claimed that not only did the stimulus create jobs, but that it created 2 MILLION jobs???
You have repeatedly tried to present yourself as someone who is above the liberal vs. conservative fray, as one who is only interested in the truth. But you are anything but. Why won’t you just acknowledge what you are and be done with the facade?
An increase in GDP is generally a good thing. But it isn’t when it is created entirely out of nearly $30 trillion in government debt-spending (the TARP plus what Obama is doing).
Your claim that “Job losses have gone from 700,000+ per month to even” is simply false. Initial jobless claims rose by 22,000 just last week. And there is no indication that unemployment is going to go down.
Even the Obama administration’s own numbers acknowledge that unemployment will STILL be higher when Obama leaves office in 2012 than it was when he came in. And even that is with a great many rosy assumptions.
I cited Meredith Whitney as predicting unemployment rising to 13% or higher due to all the problems Obama failed to solve. Problems that he should have solved rather than wasting $862 billion (plus interest) on a stimulus that did nothing but create a liberal slush fund.
I cited some other very troubling facts in my last response.
At best this is a jobless “recovery,” which is really, really bad. At worst we are heading for a double dip recession, which would be a nightmare.
I have this to say to those who think we’re out of the woods because a few numbers look better (even as others look much, much worse). From Wikipedia:
And when you take a look at our disastrous consumer confidence, and when you take a look at how close we are to sharing Greece’s fate, you realize that maybe you should be reading up on Great Depression history – because it is very likely that we will soon be in Great Depression, Part Deux.
So please don’t start patting Obama on the back.
I agree with Daniel Hannan: “you cannot carry on forever, squeezing the productive bit of the economy in order to fund an unprecedented engorgement of the unproductive bit…. You cannot spend your way out of recession or borrow your way out of debt.”
As for your final paragraph, I suppose I’ll just have to cry myself to sleep and console myself with the realization that Jesus wasn’t able to convince every sinner, and I’ll probably not be able to convince every liberal, either.
February 26, 2010 at 4:27 pm
What you’re really saying is that you fail the quiz. You don’t have a clue how government works.
From the Herald-Journal, January 27, 1984”
Article One of the Constitution of the United States refutes your argument.
Ronald Reagan increased federal spending by exactly zero. Furthermore, Reagan never had control of the House, and he had only intermittent marginal control (and loss of control) of a Senate that changed hands more than once during his presidency.
Reagan could never cut spending the way he wanted, because the Democrats who ran Congress would never have allowed it. Reagan wanted to eliminate whole departments of entrenched bureaucracy (such as the Dept. of Education and the Dept. of Energy). The Democrats who held the purse strings wouldn’t let him.
This also gets us to the utterly false notion that “Bill Clinton ran a deficit surplus, while George Bush took us deep in the red. Baloney. Rather, the Republican Revolution that swept into power under the Contract with America after only two terrible years of Clinton misrule gave Bill Clinton a deficit-gutting budget to sign for 3/4ths of the Clinton presidency. As an example, Clinton vetoed welfare reform something like three times before he was finally forced to sign it. And then Slick Willy took credit for it as though it were his idea all along! On top of that, Clinton got to cut defense spending because Republicans had just won two wars for him (the Cold War and the first Iraq War). Clinton keeps getting the credit because the mainstream media consists of a bunch of propagandists.
You want to blame someone for all the debt accumulated during the Reagan years, why not blame the Democrat Congress? Why not blame Tip O’Neal? He was the Democrat Speaker of the Democrat House Majority from 1977 until he retired near the very end of the Reagan era. He controlled the purse-strings FAR more than Reagan did. You know, because of that Constitution-thingy.
Reagan didn’t spend a penny that old Tippy didn’t authorize him to spend.
That said, I took a look at another page in your historical debt section and found the FDR years. Franklin Delanor Roosevelt raised the debt from $22,538,672,560.15 to $258,682,187,409.93.
Mr. Center Square, that is an increase of 1,048%.
“Triple the National Debt”? FDR didn’t triple the national debt – he multiplied it by 11.5 TIMES. Which is to say that he nearly QUADRUPLED his TRIPLING of the national debt.
I mean, OMG. If only FDR had only tripled the national debt!!!
And unlike Ronald Reagan, who had to negotiate and compromise (I’ll sign your X if you give me my Y), FDR had a total Democrat majority throughout his entire presidency.
Oh, I hear the excuse: “FDR fought a war.”
Well, Reagan fought a war, too. The biggest, most expensive war ever fought. Ronald Wilson Reagan fought and won the Cold War, a war in which he defeated the mightiest nation that America ever confronted, an enemy that utterly DWARFED Nazi Germany and Imperial Japan in size and power.
And, of course, Reagan had an economy so ugly with problems so intractable that his outgoing Democrat president said, “It would be misleading for me to tell any of you that there is a solution to it.”
So if you want to say Reagan was a terrible president because of the deficit, acknowledge that FDR was a minimum of three times worse of a president.
And it’s not just Reagan vs. FDR. Here’s an article demonstrating that Democrats have increased the national debt to a tune of two-and-a-half-times more than Republicans.
And we find out that the old annual deficits under Republicans have now become the monthly deficits under Democrats:
And from the above, you see how disingenuous the Democrats have been about the Bush spending. Because when the spending was at its worst during the years 2006-2008, it was the DEMOCRATS who had both the House and the Senate who were spending it.
FDR’s spending blows your theory that we can solve our debt problems by jacking up taxes sky high. How did that work out for him?
I remembered I utterly blew somebody out of the water who had argued that tax cuts created deficits. Turns out it was you. In any event, I’ll reproduce it here:
Cutting taxes raises federal revenues. It’s been doing so forever. On the other end, raising taxes cuts federal revenues. It’s been doing so forever.
Tax cuts don’t create deficits; in fact, they would alleviate deficits if Congress would just cut their spending rather than continuously increase it.
Please don’t compare Obama to Reagan. Reagan succeeded wildly, and created a stable economy that lasted through Bush 1, Clinton, and into Bush II.
When Barack Obama creates a trend of prosperity that lasts for nearly twenty years, then you can compare him to Ronald Reagan.
February 27, 2010 at 9:02 am
I’m not making the claim that the stimulus reduced unemployment.
Cutting tax rates increases tax revenues. Okay. Then what is your theory why we had massive deficits and a tripling of debt under Reagan?
February 27, 2010 at 9:28 pm
You have two points:
I understand that. I was pleased and surprised to read it when you said it the first time.
But you HAVE to be aware that the argument that the Obama stimulus was a huge job creator has been THE central claim of the Obama administration and the Democrat Congress. It has been made over, and over, and over again, at the highest levels, and repeated over, and over, and over again by the media.
And my point is that if you want to be “above” the political fray, you should be spending FAR more of your time confronting the Democrats’ false claim than you are spending confronting mine – due to the sheer magnitude of the bogus liberal/Democrat claim.
As for your second point – or question:
It’s actually incredibly simple: something called “spending.”
for the sake of argument, let us say that we have “the perfect tax rate,” whatever that is (whether it be high like the liberals love, or low like conservatives love).
Now let us say that the Congress spends three times as much as it takes in.
And voila: you have a debt that is three times higher than what you collected in tax revenue. Notice that it doesn’t even MATTER how much you collect in taxes: it only matters how much you spend IN RELATION to how much you collect in taxes.
I notice again that you fixate on Regan’s “tripling of debt.” And I notice you omit mention of FDR’s quadrupling of his debt after he tripled it.
The Democrats who Controlled both the House (for all of Reagan’s presidency) and the Senate (for much of Reagan’s presidency) for had their budget priorities; and Reagan very much wanted those priorities reduced. At the same time, Reagan had HIS priorities (to defeat the Soviet Union and win the Cold War). They both had to give the other what the other wanted to get what they wanted.
I did mention that the U.S.S.R. was the largest, most powerful, and most terrifying of any enemy we have ever faced, didn’t I?
Reagan’s successful strategy was simple: we could not have a nuclear war. In the nuclear age, that was unthinkable. At the same time, the stalemate was similarly unthinkable to great presidents such as John F. Kennedy. Reagan therefore engaged in a military buildup that broke the Soviet’s economically trying to match. We defeated the most powerful military power in the history of the world without firing a shot as their economy imploded.
There is good reason to believe that this was the same strategy that JFK essentially had:
Reagan’s “Star Wars” is nothing if not a “Space Race.” And for what it is worth, it was Reagan who inspired me to volunteer to serve in the United States Army.
Such a race/buildup is not cheap. Far from it. But the greatest Republican president of modern history, and the greatest Democrat president in modern history, both agreed that it had to be done.
It’s not enough to say that Reagan and Kennedy were merely the greatest presidents in modern history, either. According to the Gallup poll, Reagan was the greatest president ever, and Kennedy is right behind him, tied with Lincoln. It would seem to me that these men, and their policies, merit the upmost of respect.
And, as I have pointed out before, JFK also stood for cutting taxes in order to increase federal tax revenues.
That link above cites FAR more Kennedy quotes, but the top three should do:
Thus, the two greatest presidents, certainly in modern history at least, across party lines, agreed on this principle that lowering taxes increased tax revenues.
The Laffer Curve isn’t merely a theory: it is an illustration of a simple fact (here is a pretty good and yet pretty short article on it). If you tax people at 100% of their income, how much will you collect in revenue? Very quickly, it will be zero. Why? Would YOU continue to work and labor and produce when you aren’t allowed to keep ANYTHING? Of course not. You’d stop working and the economy would cease to exist. At the same time, if the tax rate was 0%, we’d have all kinds of economic production, but the government would starve. What you are looking for is the “sweet spot” in which taxes maximize revenues. At this level, the government collects the most in revenue, and the workers/investors get to keep the most in earnings.
There are two “sweet spots” presented in the curve where you collect about the same revenues. But in the first, lower rate, compliance is fairly easy, and more people pay their taxes. At the second, higher rate, people don’t want to pay, and shelter their money and do things to avoid paying.
I can go to liberals such as John and Teresa Kerry (see here and here), Oprah Winfrey, and Michael Moore, to demonstrate that even liberals will do everything they can to protect their money from taxes. Which amounts to a beautiful illustration of the accuracy and wisdom of the Laffer curve.
March 3, 2010 at 9:27 pm
I’m not sure what your Reagan analysis is supposed to mean. That he would have been fiscally responsible, except he had good reasons not to be (the Soviet threat)? Or that he would have been fiscally responsible, except for the other political party?
Isn’t that EVERY administration?
You think people 30 years from now won’t say that Obama had good reasons to run huge deficits and inflate the debt? What’s the difference?
March 3, 2010 at 11:21 pm
I’m surprised that you have so much difficulty understanding something that is actually rather quite simple.
My “Reagan analysis” means that Reagan didn’t spend us into massive deficits – as you incorrectly claimed. He didn’t spend anything. The Congress – which was controlled by Democrats – spent us into massive deficits. That is simply a fact of our Constitutional system, and if you don’t understand that, you ought to learn. Start by reading Article 1 of the Constitution. As a corollary to that, it wasn’t Clinton that gave us a budget surplus, it was the Republican Congress that took over and imposed the Contract with America; and I should now mention that Barack Obama has had – unlike Reagan – nothing but an overwhelming Democrat majority in both the House and Senate such that Democrats and ONLY Democrats are to blame for the current shockingly massive deficit spending. I ALSO pointed out that if you’re going to damn Reagan as a bad president for “tripling” the deficit, would you at least have the courtesy for damning FDR for multiplying the deficit he inherited by a dozenfold? I’d appreciate the integrity.
Don’t you dare demonize Reagan for tripling the deficit, and lionize FDR who tripled the deficit, and then tripled it again nearly FOUR TIMES.
You fundamentally misunderstood what I thought I was making clear: so let me go back to my earlier post in which I said about midway down:
I gave the “Soviet threat” stuff and the Cold War spending merely to counter any potential charge that FDR multiplied the debt by a dozenfold only because he was a president at war. When the fact of the matter is that Reagan was a president at war, too. Quite a few argue that the Cold War was World War III. It’s largely a matter of semantics, but there’s no question that the Cold War dominated every president’s foreign policy for 45 years. Every president had fought the Cold War; Reagan came up with the strategy that WON it. And without the billions of casualties most people expected.
Not every administration has to fight wars. Clinton didn’t have to fight wars, because Reagan and Bush I won them for him. So, no, it’s NOT every administration.
What I said earlier about the fact that it is CONGRESS, not the president, that controls the spending leads to another point about George Bush that I’ve posted before, namely:
And we find out that the old annual deficits under Republicans have now become the monthly deficits under Democrats:
Somehow Bush got all the blame, but it was Nancy Pelosi and Harry Reid who did all the actual spending. And when Republicans have been in charge of Congress – regardless of which party was in the White House – spending has been far lower. When Democrats have been in charge of Congress – regardless of which party was in power – spending has been FAR, FAR higher.
On the subject of Bush and taxes and spending, I thought I’d pass along a recent WaPo article I came across:
March 4, 2010 at 10:59 am
[Prologue: So you don’t have to be frustrated, when I say, “I don’t understand,” what I really mean is that your argument is inconsistent. “OBAMA’S $3.8 trillion budget”? “BUSH’s tax cuts”? REAGAN’s tax cuts? All of those were Congress’s doing, no?. Somehow, you have ascribed the 1980s tax cuts to Reagan, but the spending increases of that era to Congress. I don’t understand — i.e., You are being inconsistent in arguing — that Constitutional distinction]
In any event, let’s set aside who was responsible for the massive deficits and skyrocketing debt we saw beginning in the mid-1980s. Factually, it happened. It seems like we should either be willing to accept persistent deficits and the accumulation of debt in both the Reagan and Obama eras, or we should decry them in both. Personally, I decry them both.
And that is what I would sincerely like to understand. Do you see some distinction that I do not between the two eras? Some reason that you view the Reagan era favorably, but this era unfavorably, when the federal fiscal trajectories are the same? To recap:
Increased federal spending? Reagan-era: check; Obama-era: check.
Decreased taxes? Reagan-era: check; Obama-era: check.
Substantially increased federal deficits? Reagan-era: check; Obama-era: check.
Substantially increased federal deficits? Reagan-era: check; Obama-era: check.
So why do you draw different conclusions between the two cases?
March 4, 2010 at 11:04 am
Typo: I meant the last one to be: Substantially increased federal DEBT? Reagan-era: check; Obama-era: check.
March 4, 2010 at 11:19 am
P.S.: Perhaps your post here should be re-titled. Not “Obama Stimulus Actually Raised Unemployment,” but rather “Congressional Stimulus Actually Raised Unemployment.” Article I of the Constitution, and all that.
P.P.S: This is a fascinating bit of federal fiscal history. You mentioned Clinton and Gingrich. Did you know that, of the four Congresses with which Clinton worked, federal spending rose the most slowly during the first? Yep. Gingrich got there, and spending accelerated.
Here’s the data from the US Treasury’s website (http://www.fms.treas.gov/mts/index.html):
Congress #1: FY1992 $1381 billion –> FY1994 $1461 billion :: +2.8%/year
GINGRICH ARRIVES: Congress #2: FY1994 $1461 billion –> FY1996 $1560 billion :: +3.4%/year
Congress #3: FY1996 $1560 billion –> FY1998 $1652 billion :: +2.9%/year
Congress #4: FY1998 $1652 billion –> FY2000 $1788 billion :: +4.0%/year
There is blinding orthodoxy that the Reaganites, Gingrich included, were great constrainers of government. Hardly. They were tax cutters, not spending cutters.
March 4, 2010 at 11:17 pm
Here’s the deal: Technically, Congress should both get credit for the tax cuts, and “credit” for the spending. It was in their power to authorize both. The President cannot impose either. The only thing he CAN do is veto something Congress sends him that he doesn’t like.
That said, Reagan wanted the tax cuts, pushed for them, negotiated for them, and compromised to get them. At the same time, he wanted to eliminate the Departments of Education and Energy, for example. And the Democrat-controlled Congress wanted more spending. And they gave Reagan what he wanted in exchange for Reagan giving them some of what they wanted.
Still surprised why this is so hard for you to understand.
Reagan wanted tax cuts, and the same sort of defense/Star Wars spending JFK wanted (as per my earlier comment). The Democrat Congress wanted a bunch of social spending. Reagan negotiated with a hostile Congress to try to achieve the best deal he could get at the lowest cost.
Did Obama have to negotiate and compromise with a hostile Senate? Is Obama the arch, uber-conservative, and Nancy Pelosi and Harry Reid the stark raving liberals? Or are Pelosi and Reid the arch, uber-conservatives and Obama the stark raving liberal?
Neither. Obama is in total ideological agreement with his fellow Democrats.
And that’s what separates him, and the deficits created by this Congress, from Ronald Reagan.
March 4, 2010 at 11:35 pm
You never bothered to explain to me 1) why you attacked the idea that the Obama stimulus cost jobs but never attacked the constantly propagated view that the Obama stimulus created jobs – even though you acknowledged that it DIDN’T create jobs.
You said, and I quote:
You never bothered to explain why you are at home with being an ideologue yourself, a guy who attacks only one side, but never the other. Where are your articles on the “Obama’s stimulus created 2 million jobs” lies? Where are your articles stating that Obama and the Democrats have been lying to the American people??? Which frankly is why I should reject your “analysis” as ideology-driven by your own reasoning.
And 2) you never bothered to address the fact that if Reagan’s tripling of the deficit was so bad, then why wasn’t it a literal crime against humanity that Franklin Delanor Roosevelt multiplied the deficit by 11.5 times (basically, he tripled the deficit, and then quadrupled what he’d tripled).
By your own analysis, FDR is the worst president in American history, and should be excoriated, and his New Deal reviled. No president EVER raised the deficit as much as FDR – although the turkey we have now is on pace to break the FDR deficit record.
And 3) you’ve never bothered to deal with the fact that both JFK and Ronald Reagan – our two greatest presidents according to Gallup polling – were both tax cutters, and both believed that cutting taxes increased federal revenue.
But you haven’t been intellectually honest. I’ve raised all three of these points several times, and you just pretend they don’t exist.
Which is why I’m frankly done arguing with you. I’ve dealt with every point you’ve raised, and you’ve ignored most every point I’ve raised. I’m bored with you. I’ve given you plenty of opportunity to make your points. I’m not going to keep arguing with you forever. Which is why I’m not going to allow any more comments from you on this issue.
Since I’ve dealt with all your other points, I’ll deal with the two you make here as well:
As per your first P.S., technically, there’s no question you’re right. The only qualifier (but it’s an awfully BIG qualifier), is that Obama wanted every single penny of the massive spending that his current Democrat Congress imposed over staunch Republican objections. And for that matter, as Senator Obama he voted for most of the giant spending of the last Congress under Bush before being elected president, with the capstone being TARP.
In other words, it was Congress that voted to spend the trillions of dollars of debt, but Obama not only cheered for it – he BEGGED for it. He pushed HARD for his stimulus. He pushed HARD for his omnibus bill. Etc.
Big difference from Reagan. Don’t know why you can’t understand that.
As for the P.P.S., when Bill Clinton was elected,the country was just emerging from a severe recession.
The Time Magazine issue making Clinton “Person of the Year” gets to the issue:
The fact of the matter – and this is a FACT – is that the Bush I recession was COMPLETELY OVER even before the 1992 election. Not that the mainstream media did anything to help Bush out by broadcasting that message.
Bill Clinton began his presidency with an economy recovered from recession and beginning to hum along.
When you have a recession, you have a downturn in productivity and the GDP. When you begin a recovery, you are 1) starting from a much lower base, and 2) therefore have a far higher percentage growth even though the recovery might be lower in absolute dollar terms.
An obvious example: say I have 1 penny, and after work and investment, I get a second penny. That is a phenomenal 100% increase in growth. Boy did I do great!
Now suppose I already had two pennies (representing a stronger economy), and get that same additional penny. I got the same absolute gain, but that only represents an extremely disappointing (by comparison) 50% increase in the rate of growth.
That’s what your surface-impressive growth rate leaves out.
Low starting point + recovery = a much higher growth rate than a higher starting point + a recovery.
Kind of obvious, I would think.
It’s also interesting that you think it right to pat Bill Clinton on the back for his wonderful first two years in office, when the American people were so furious with him that they voted out Democrats in the largest political landslide in American history after those “wonderful” two years.
For the record, here is a study demonstrating which Party’s Congress have been more fiscally responsible over the last 30 years.
Democrats Increase the National Debt more then Republicans over the past 30 years
Dave
Sat, 21 Nov 2009 19:24:00 -0800
For the past 30 years, the lowest average National Debt Increase
stretch was from 1994-2006, when the conservatives had the majority of
congress.
When Democrats outnumbered Republicans in Congress for their 2 year
term – The Average 2 Year % Increase to the Public Debt was 25.125%
When Republicans outnumbered Democrats in Congress for their 2 year
term – The Average 2 Year % Increase to the Public Debt was 10.57%
PROOF –
(in rounded Millions of dollars)
YEAR DEBT DIFFERENCE 2 YEAR
FROM PREV % INCREASE
YEARS DEBT
2008 10,024,725 1,017,072
2007 9,007,653 500,679
2006-2008 Democrat Congress Margin +32 17.8%
2006 8,506,974 574,264
2005 7,932,710 553,657
2004-2006 Democrat Congress Margin -41 15.3%
2004 7,379,053 595,822
2003 6,783,231 554,995
2002-2004 Democrat Congress Margin -28 18.5%
2002 6,228,236 420,773
2001 5,807,463 133,285
2000-2002 Democrat Congress Margin -8 9.8%
2000 5,674,178 17,907
1999 5,656,271 130,078
1998-2000 Democrat Congress Margin -22 2.7%
1998 5,526,193 113,047
1997 5,413,146 188,335
1996-1998 Democrat Congress Margin -32 5.8%
1996 5,224,811 250,828
1995 4,973,983 281,233
1994-1996 Democrat Congress Margin -42 11.3%
1994 4,692,750 281,261
1993 4,411,489 346,868
1992-1994 Democrat Congress Margin +94 15.5%
1992 4,064,621 399,318
1991 3,665,303 431,990
1990-1992 Democrat Congress Margin +112 25.7%
1990 3,233,313 375,882
1989 2,857,431 255,093
1988-1990 Democrat Congress Margin +95 24.2%
1988 2,602,338 252,061
1987 2,350,277 224,974
1986-1988 Democrat Congress Margin +91 22.4%
1986 2,125,303 179,361
1985 1,945,942 282,976
1984-1986 Democrat Congress Margin +65 27.8%
1984 1,662,966 252,264
1983 1,410,702 213,629
1982-1984 Democrat Congress Margin +95 38.9%
1982 1,197,073 168,344
1981 1,028,729 98,519
1980-1982 Democrat Congress Margin +41 28.7%
1980 930,210
.
.
.
.
If you misunderstood the table it may be because google groups uses a
proportional font.
Example taken from my table –
(in rounded Millions of dollars)
YEAR DEBT DIFFERENCE 2 YEAR
FROM PREV
%INCREASE
YEARS DEBT
1984 1,662,966 252,264
1983 1,410,702 213,629
1982-1984 Democrat Congress Margin +95 38.9%
1982 1,197,073 168,344
1981 1,028,729 98,519
1980-1982 Democrat Congress Margin +41 28.7%
As how I came up with my figures –
1982 – Senate – 54R 46D
1982 – HR – 166R 269D
Total Democrats – Total Republicans = Democrat Majority Margin = 315D
– 220R = +95 (There were 95 more Democrats in Congress then there were
Republicans from 1982-1984)
(in rounded Millions of dollars)
>From 1982-1984 the Debt rose from (base debt) 1,197,073 to 1,662,966 –
an increase of 465,893.
The amount of increase / The base debt = its percentage increase
so 465,893 / 1,197,073 = 0.38919 = 38.9%
>From this information I can say –
>From 1982 through 1984, when the Democrats had a majority in Congress,
the National Debt increased by 38.9%
And the last thing I did –
Averaged all those individual National Debt increases when Democrats
had a majority of Congress = 25.125%
Averaged all those individual National Debt increases when Republicans
had a majority of Congress = 10.57%
March 5, 2010 at 4:21 pm
I don’t address those issues because those aren’t the point I am making. The point I am making is that our spending and our deficits have grown, regardless of whether Republicans or Democrats have been in control of either Congress or the White House. Everything I have posted is consistent with that, and all the facts support that contention.
You, on the other hand, seem to think that Repubicans produce spending cuts and balanced budgets, and Democrats produce spending growth and deficits. Nothing in our modern history supports that.
I’m not here to defend Democrats. I don’t have any opposite-leaning blog posts, because no one is out there claiming Democrats are cutting spending and balancing budgets. If I ever see such a post, I will critique it as surely as I have critiqued yours.
March 5, 2010 at 5:17 pm
I’m going to allow your comment just because it illustrates how truly hopeless a discussion with you is.
You seem to think that I should have to answer all your questions and challenges, but you shouldn’t be in any way required bother with any of mine. You seem to think that you should be able to come to my blog and engage me in a debate which you get to shape entirely on your own terms.
What you’re doing is rather like this:
Challenge 1) There was a smoking gun in your hand.
Challenge 2) There was a corpse on the floor at your feet.
Challenge 3) The bullet was fired from the gun in your hand, and the victim’s blood was found splattered on your clothes.
Murder suspect: “I don’t address those issues because those aren’t the point I am making.”
That tactic wouldn’t work in a courtroom, and it won’t work here.
In a reasonable discussion, both sides get to make points. And both sides have to respond to the other’s points. But you aren’t interested in a reasonable discussion. You aren’t interested in give and take. You ask the questions and demand the answers, and ignore my questions altogether. I don’t get to ask questions or cross-examine you. Only your “point” counts.
You say (yet again), “I’m not here to defend Democrats.” And yet that is ALL you’ve been doing. And in point of fact, it is all you have EVER done in every single discussion you’ve ever had with me on this blog.
It’s that whole, “Are you going to believe me, or are you going to believe your lying eyes” thing. I believe what I’ve seen you do over and over again, rather than in your self-righteous denials.
Heck, how about if I say “I’m not here to defend Republicans?” I’d be just as “honest” as you.
The difference between you and I is that we both have a very clear perspective, but only I am honest enough to actually acknowledge it.
You aren’t any different from Obama. You depict yourself as majestically transcending the petty political divides that are just so far beneath you, when in reality you are every bit the ideologue. At the health care summit, Obama deceitfully presented himself as the moderator of the event, when in reality he was a doctrinaire liberal who couldn’t have been more completely on the Democrats’ side. That’s what you constantly try to do.
I’ll end with this: Re-read your comment, Far Left Square. You tell me all about your “point,” namely, “that our spending and our deficits have grown, regardless of whether Republicans or Democrats have been in control.” Now go back to your first comment that started our argument: that wasn’t the damn point you were making. And in point of fact, in your self-righteous post here, you don’t even ALLUDE to the actual point you were making!!!
What was your initial “point,” contrary to your deceitful straw man here? Let’s reproduce it:
I’m sorry. Did I miss something in there? Where’s that point “that our spending and our deficits have grown, regardless of whether Republicans or Democrats have been in control of either Congress or the White House” that you claim to have been making all along???
In my response to that first post I legitimately pointed out out the hypocrisy underlying your argument: that it was FINE with you when the Democrats and Obama spend the last YEAR falsely claiming that the stimulus created 2 million jobs; but that a conservative making the argument that the stimulus actually created MORE unemployment than jobs was unacceptable and had to be confronted.
So what you are doing here is erecting a total straw man, to artificially present yourself as being all hoity-toity transcendentally bipartisan that “neither side is perfect,” with me defending some idiot’s point (as though I actually ever said, “Republicans always produce spending cuts and balanced budgets”). What I said to that regard – and in fact what I documented in my comments – is that Republicans have done a much better job of at least TRYING to do that than Democrats.
Now I’m done with you, and have good reason to be.
You have flat-out told me here that you see no reason whatsoever to respond to any point that you don’t like. You won’t deal with any objections that might confront or even contradict your ideology. You claimed that Reagan was a proof of your “point” because he tripled the deficit, but you refused to deal with the fact that FDR tripled the deficit and then quadrupled the deficit he had tripled. Why not? Because it tears your Reagan “point” apart, that’s why. And you’re just not capable of dealing with being refuted. Easier to just ignore it and go on talking like it never happened.
There’s no point whatsoever in having a discussion with somebody who pointedly ignores any point or argument or fact you make that he doesn’t want to deal with.
So buh-bye, Far Left Square.
March 7, 2010 at 9:50 pm
The Center Square is just spam now, but he left this parting “shot” to my above comment:
Again, this guy does a wonderful job of proving my point for me.
Center Square went after Reagan’s deficit – and anyone can go back to his comments to verify this for themselves – NOT to merely suggest that Republicans aren’t perfect either, as he falsely claims; but rather to present the liberal talking point that Reagan’s Republican policies were to blame for ballooning the deficit. Center Square tried to maintain that Reagan’s tax cuts created the deficit – which is doctrinaire liberal ideology.
I brought up the example of FDR from the SAME website Center Square used to demonstrate that FDR not only “tripled” the deficit, as he had accused Reagan of doing, but multiplying the deficit by 11.5 TIMES. Which is to say that FDR not only “tripled” the deficit, but tripled it, and then quadrupled it AFTER he’d tripled it.
But Center Square – who continuously falsely presents himself as being neither liberal nor conservative – can’t be fair with facts. So after I repeatedly pointed out that FDR had multiplied the deficit so much worse than ANYONE EVER DID – which stands as a direct refutation of DEMOCRAT policies – suddenly that point didn’t matter.
Center Square refused to even acknowledge it. And now when he does, he cites it as though FDR merely “tripled” the debt to put him at parity with Reagan.
But that’s a lie.
That gets me to the second thing: Center Square loves his straw men.
So Center Square presents the beauty that he’s merely saying, “I don’t understand why I can’t be against bad fiscal policies from both parties,” whereas I’m allegedly somehow arguing that only Democrats have ever been guilty of bad fiscal policies and Republicans are perfect.
Again, that is just a transparent lie.
Allow me to quote my true position from another article comment from nearly a month ago:
Does that sound like someone doesn’t think there are “bad fiscal policies from both parties”??? That’s not the thesis that was being debated – and Center Square is entirely dishonest for suggesting that it is.
Rather, the issue was which party was more responsible for the staggering deficits and debts that face us. And I documented that it was Democrats far and away.
Center Square is not merely a liberal; he is a dishonest liberal who tries to masquerade as something that he is not (some kind of transcendent moderate who only cares about reason and fairness). And even as he disingenuously presents himself as someone who transcends political ideology even as he routinely embraces leftist political positions, he also disingenuously tries to caricature his opponent’s position in the form of stupid and extremist Republican straw men.
Which is why I don’t want to have anything more to do with him.