Republican’s Bold Stimulus Play Could Backfire

By Justin Gardner | Related entries in Barack, Economic recovery, Economy, Jobs, Money, Obama, Republicans

So let’s get this straight…

$87 billion of the $787 billion has already been spent in the past 3.5 months, and the monthly unemployment claims were cut in half last month (when compared to the previous 6 months) and the stimulus isn’t working?

This is in response to Republican lawmakers, specifically Sarah Palin, continuing to push the memes that the stimulus isn’t working and we’re headed towards socialism…the latter of which was “graphically” embarrassed recently.

Listen, I know that this is all positioning for 2010, but do they really think it’s wise to place their bets on this horse? I get that the Obama administration opened themselves up for criticism recently because they estimated that unemployment would top off at 8%, but signs are pointing to a recovery within the year. Because imagine if the monthly unemployment numbers come in at 250,000 next month. And then 150,000 after that. And then 100,000.

What if by the end of the year we’re seeing job growth? What then?

Would they consider the stimulus a failure?

Regardless of economic philosophy, I just think they’re betting it all on red and that could easily turn up a losing hand if they’re not careful.


This entry was posted on Monday, June 8th, 2009 and is filed under Barack, Economic recovery, Economy, Jobs, Money, Obama, Republicans. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

11 Responses to “Republican’s Bold Stimulus Play Could Backfire”

  1. Simon Says:

    “Republican’s Bold Stimulus Play Could Backfire.” Or not.

  2. Jimmy the Dhimmi Says:

    The best Obama can hope for is another bubble economy. Just like the one President Bush ushered in 7-8 years ago when he inherited a recession and tried to stave it off with government spending and lowering interest rates to encourage more lending. Although I’m not sure which sector of the economy will balloon this time.

  3. Simon Says:

    By the way, the pie chart you posted recently–whatever its vices or virtues–did not even purport to speak to whether we are headed in the direction of socialism. It addressed whether we are there now, and Palin is talking about the former in the interview snippet you link to:

    PALIN: Well, that is where we are headed. That is where we have to be blunt enough and candid enough and honest enough with Americans to let them know that if we keep going down these roads… nationalizing many of our services, our projects, our businesses, yes that is where we would head.

    (Emphases added.)

  4. ExiledIndependent Says:

    Wait, monthly unemployment claims were cut in half? In what country? Or are you talking about a percentage, and not the actual number of people receiving unemployment benefits?

    By the next election cycle, the second housing bubble will pop (thanks to ARMs) and inflation is going to become an increasing concern. The Supreme Court is going to seriously delay the nationalization of Chrysler and GM (since Obama sort of wants to rewrite contract law). So I’m hoping that no one is raising an economic “Mission Accomplished” banner any time soon.

  5. Justin Gardner Says:

    Simon,

    The graph actually did show that if you compare the government’s continued interest in buying additional pieces of private corporate assets when compared to the total corporate asset pool.

    So what’s the continued interest? Virtually none.

    And hey, let’s say for argument’s sake that the government was interested in buying up 5% of the nation’s corporate assets and stopping there. You’re telling me that a government owning 5% of a nation’s once privately held assets amounts to socialism?

    Palin and company are distorting that word to trick voters. That’s all this is.

    Exiled,

    The number of new people who filed to receive unemployment benefits was cut in half. Or, to put it another way, the number of people who lost their jobs in May dropped by about half from the previous month. So while we’re still adding hundreds of thousands of people to the overall unemployment number, the rate at which the economy is shedding jobs is slowing.

  6. Brian Says:

    So the stimulus plan, which was so critical that it needed to be rushed through Congress with a minimum of debate lest we experience a financial freefall, has been about 11% deployed and we’re already coming out of the recession? So we can just save the rest of the money, right?

  7. michael reynolds Says:

    The socialism meme is idiotic. If there’s socialism it’s Social Security and Medicare. Someone let me know when the GOP is ready to shut either down.

    GM and AIG are pimples on the rear end of Social Security and Medicare. And people who scream about socialism and fall mute in the face of the 800 pound gorillas of socialism just make me yawn.

  8. gerryf Says:

    The fact that the number of people being layed off this past month is half as many as those were layed off three months ago is little solace to those who were layed off.

    The chirping coming from some on the left (and I am on the left) is overly optimistic. There is nothing that has occurred in the last three months that will lead to anything but a slow, jobless recovery. The GM and Chrysler plans are designed to make a company profitable again, not to re-enable the industrial sector or retain or create jobs.

    While I believe the stimulus money is ultimately necessary and will be beneficial in the long run, I believe that in many ways it is being wrongly applied. States are using the money to prevent deficits, not stimulate the economy–while I think there is some positive effect in stopping further bleeding, this is hardly stimulus

    And strangely, while the right’s concerns of hyperinflation are overstated, I find myself agreeing with those who say that we are heading toward another bubble economy.

    We have many of the same players from the Clinton financial advisors–who themselves are adherents of the Wall Street buffoons who have inflated the last several bubbles still running the show. Geitner, Sumner should never have been allowed anywhere near economy.

    It is painfully obvious that the Obama team’s plans all along were to re-inflate the bubble and allow Wall Street to get back to the business of being Wall Street.

  9. Simon Says:

    Justin,
    The pie chart in your post–which is what I was talking about when I referred to “the pie chart you posted recently”–represented an instantaneous snapshot of the “[p]ercentage of American corporate and business assets not held by the United States government” vs. the “[p]ercentage of American corporate and business assets recently nationalized by the U.S. government” at the time it was created. It didn’t purport to represent a trend, and nor could it, unless you want to explain how a single pie chart can represent a linear progression.

    The graph in a post linked from the post you linked to–I address it since maybe that’s what you’re referring to–shows government spending as a percentage of GDP, and while graphs in abstracto are obviously capable of displaying trends, that one doesn’t help you, since it would be statistically inapt to put a trendline on it with that spike at the end.

  10. Justin Gardner Says:

    Simon,

    Again, I was speaking in the sense if you compared the numbers to other numbers. It’s a point of comparison. You take me WAY too literally sometimes.

    Listen, there’s no doubt that government ownership would go up if you were showing a true, plotted out trend. But here’s the question…if government ownership went from .11% in 2008 to the current .21%…what would you think? I have a pretty good guess, but I still contend that the number is so rock bottom low that it’s laughable to suggest we’re “headed” towards anything resembling socialism.

    And hey, you can have your “% of GDP” all day. Historically that has expanded and contracted as the circumstances warranted it (see The Great Depression), but the important part here is that ownership in this country has remained private and that’s what you should be debating if you’re going to argue about socialism.

  11. Simon Says:

    Justin, even assuming that a prerequisite for “socialism” is government ownership, rather than government control, your analysis assumes a linear progression, an assumption that you base on… What?

    It’s silly to suggest that what we have now is “socialism,” and I find all the rhetoric about how we’re headed there rather overheated. I’ve lived in a country with actual socialists with their grubby mitts closer to the levers of power than I’d like, so that perhaps gives me some perspective. But it’s quite clear that the direction of this administration is in that direction – and that they intend it to be a vector rather than an arrow is no defense. They want to see more government control of more and more aspects of what people do, and let us not pretend that there is some dichotomy between individual rights and economic rights, see, e.g., Scalia, Economic Affairs as Human Affairs, 4 Cato J. 703 (1985).

    Their model is a far greater level of government direction (and federal government direction, at that), and that is a step in the direction of socialism. It may not be socialism, but it is a step in that direction, and there is much wisdom in Justice Douglas’ observation that “[a]s nightfall does not come at once, neither does oppression. In both instances, there is a twilight when everything remains seemingly unchanged. And it is in such twilight that we all must be most aware of change in the air — however slight — lest we become unwitting victims of the darknes.” The Douglas Letters 16 (Urofsky & Urofsky, eds. 1987).

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