The Stimulus is Still Stimulating

Respectfully submitted by Lawrence Rafferty(rafflaw)-Guest Blogger

Now that I have digested some wonderful Thanksgiving food and celebrated my grandson’s first birthday, it is time to get back to work.  In light of the recent calls by Rep. Paul Ryan, Rep. Eric Cantor and former Speaker and current GOP Presidential Candidate Newt Gingrich to terminate the non-partisan Congressional Budge Office (CBO), I couldn’t help but wonder why the Republicans have a problem with the CBO?  The CBO has been critical of both parties legislation in the past when the numbers just didn’t add up.  Could this latest announcement by the CBO that the Obama Stimulus package of 2009 is still stimulating the economy be the last straw for the Republicans in their support of the Congressional Budget Office?

“Despite Republican mythmaking that the American Recovery and Reinvestment Act (ARRA) “created zero jobs,” the CBO reported that the stimulus added up to 2.4 million jobs and boosted GDP by as much as 1.9 points in the past quarter. As it turns out, that conclusion confirms the consensus of most economists – including John McCain’s 2008 brain trust- that President Obama’s recovery program is continuing to deliver benefits for the American people.  From the beginning, the CBO has testified to the success of the largely concluded 2009 stimulus package in driving employment and economic growth. (That’s one reason why Republicans like GOP frontrunner Newt Gingrich want to abolish the agency.)

Now, as The Hill reported Tuesday, the CBO has found that “President Obama’s 2009 stimulus package continues to benefit the struggling economy”:  The agency said the measure raised gross domestic product by between 0.3 and 1.9 percent in the third quarter of 2011, which ended Sept. 30. The Commerce Department said Tuesday that GDP in that quarter was only 2 percent total.  CBO said that the stimulus also lowered the unemployment rate by between 0.2 and 1.3 percentage points and increased the number of people employed by between 0.4 million and 2.4 million…  By CBO’s numbers, the $800 billion stimulus added up to 0.9 million jobs in 2009, 3.3 million jobs in 2010 and 2.6 million jobs in 2011.”  Crooks and Liars 

The CBO Abstract that provided these numbers just won’t jive with candidate Newt Gingrich’s opinion of the stimulus and along with his past concern with the CBO’s projections on Obamacare might just have led to this recent call to abolish the CBO.  “Gingrich’s animus is hardly surprising. When House Republicans proposed HR 2 in January to repeal the dreaded “Obamacare,” they quickly got a rude awakening from the CBO. Demolishing Republican talking points on the subject, the CBO concluded repealing the Affordable Care Act would increase, not decrease, federal budget deficits:  Over the 2012-2021 period, the effect of H.R. 2 on federal deficits as a result of changes in direct spending and revenues is likely to be an increase in the vicinity of $230 billion.

That result did not fit the GOP script. So House Majority Leader Eric Cantor doubled down, essentially accusing the agency of lying.  Cantor also disputed the claim, put forth by the nonpartisan Congressional Budget Office, that the health care reform bill passed by Congress last year will actually reduce the deficit by $143 billion, calling the figure “budget gimmickry.”  “I think what we do know is the health care bill costs over $1 trillion,” Cantor told Hill. “And we know it was full of budget gimmickry. And it spends money we don’t have in this country.”‘  Perspectives

What facts do Newt and his fellow CBO detractors bring to try to prove that the CBO is lying or is inaccurate?  As best that I can tell the only argument that they use is the “Trust Us” argument. The CBO numbers tell us that the slow economy would be even worse had the stimulus package of 2009 not been passed and for some reason Mr. Gingrich and company can’t handle the truth.

If Speaker Gingrich does not want to believe the CBO numbers on anything that supports the Obama Administration, why has he praised and utilized the CBO in the past when it suited his agenda?  “Gingrich himself has been complimentary to the CBO in the past. In 1995, he bragged, “We’re still very proud of the fact that — as a team — House and Senate Republicans passed the first balanced budget in a generation. . . . We did it honestly, using the Congressional Budget Office, which was tough.” ‘  Washington Post

What will it take for politicians of any stripe to actually admit when legislation backed by their opponents has been successful?  I and many others here have criticized the Obama Administration in the past on its failure to prosecute the Torture enthusiasts from the Bush Administration and for declaring that it is legal for any President to put American citizens on assassination lists without any judicial oversight.  Bloggers and commenters have correctly excoriated the Obama Administration for not including single payer elements into Obamacare. Shouldn’t we hold the Republicans up to the same standard of truth when it comes to an agency of Congress that has been non-partisan since its inception?

For Rep. Cantor to claim that the CBO is basically lying and then not produce any evidence to back up the claim is egregious.  Especially since Cantor is the one making the incendiary claim and he is also the House Majority Leader.  Maybe we should be happy that Cantor only called the CBO liars.  He could have called them Socialists as Newt Gingrich did!  Do you think the Congressional Budge Office is truly non-partisan and if not, why not?  Let us hear what you think.  Don’t be shy!  Happy Thanksgiving!

 


 

53 thoughts on “The Stimulus is Still Stimulating

  1. rafflaw,

    Thanks – I missed the link. Yes, I haven’t the foggiest what Newt is talking about. As far as the data, no I don’t disagree with it. But I believe it is being reported incompletely. 2.4, I believe, was the ceiling. And the floor was 700K. In any event, it was a complete waste of money.

    Mike,

    Frankly, the only thing worse than a Democrat is an incompetent Republican. Democrats spend, spend, spend, and raise, raise, raise. And incompetent Republican just spends, spends, spends. Frankly, both are terrible but the latter is worse. You’re not going to hear argument against that from me (although the tax the 1 percent bit is rhetoric…it won’t even touch our long term debt; to fix the problem Congress must reduce entitlement programs – it’s a matter of math).

  2. Ekeyra> Funny how they are equating stimulus projects to increases in taxes. Perhaps that may be the case in a healthy economy but that isn’t the case poor economic times. What taxes have been raised this time?? Very few IF ANY.

    And those projects, when there is a significant lack of any others, are actually stimulating and have been throughout much of the other 20th century recessions. By lumping peace time stimulus in with starting a war-related stimulate is misleading.

    Through this broken window fallacy argument’s logic, any and all infrastructure project or maintenance is destroying job creating potential in other sectors. Was this case the transcontinental railroad which bridged both coasts of the US? Was this the case with the interstate highway system? Was this the case with all the public works systems like providing safe and effective water systems to US cities, or all the power utilities, or sanitation systems or even the massive expansion of the internet we’re each using right now? Did are all these government funded projects destroy private sector jobs?

    A little hard to swallow isn’t it?

  3. Bulletin,

    “By lumping peace time stimulus in with starting a war-related stimulate is misleading. ”

    Actually noone did that but you. The broken window fallacy doesnt rely on the explicit destruction of property to apply its logic. You say the stimulus created jobs, but what you are not looking at is how many jobs could have been created had those resources not been confiscated and funneled through the largest beauracracy in human history. That is the broken window fallacy. Looking at what you did produce and not at what could have been produced. The seen and the unseen. Besides that, if people truly valued those projects why wouldnt they have simply funded them voluntarily instead of using the force of government?

    “Through this broken window fallacy argument’s logic, any and all infrastructure project or maintenance is destroying job creating potential in other sectors. ”

    Correct, you’re learning.

    “Was this case the transcontinental railroad which bridged both coasts of the US?”

    Yes

    “Was this the case with the interstate highway system?”

    Yes

    “Was this the case with all the public works systems like providing safe and effective water systems to US cities, or all the power utilities, or sanitation systems or even the massive expansion of the internet we’re each using right now?”

    Yes

    “Did are all these government funded projects destroy private sector jobs? ”

    Yes

    “A little hard to swallow isn’t it?”

    Well when you sum up the federal governments spending debacles of the last century it is staggering to think how much wealth we’ve pissed away.

  4. Ekeyra>
    ““By lumping peace time stimulus in with starting a war-related stimulate is misleading. ”Actually noone did that but you. ”

    Uh…nope, sorry. Your video did @ 3:18. Check it out. And as far as your interpretation that all those examples I gave reducing private sector jobs is EXTREMELY speculative and fits quit well in to a libertarian philosophy. In reality, it’d be impossible to determine. And your questions about, why didn’t people just voluntarily do it themselves is…well amusing at best. I especially love how you assert clean water, utility and sanitation infrastructure killed private sector jobs. Wow!

    I pose some other questions for you. How much did the transcontinental railroad increase business across the country? How many opportunities did it create for expansion of those private sector businesses? The interstate highway system…same questions? I’ll help ya out this time. I only need two words…A LOT (simple answer). Where do you think the state of domestic business would be without those arteries that bring goods and services to everyone in the country? The internet…once again a facilitator for commerce expansion.

    All these things I mentioned are prime examples of HOW government projects have resulted in facilitating the growth and expansion of business and commerce in this country. You really cannot provide much of a substantive argument that we’d be better off without those systems those projects created and that we use on a daily basis. You really think it’d be more effective if ALL of them were run privately? I don’t see many people agreeing with you once they imagine the realities of such a situation. And speaking of that I challenge you to imagine that. Imagine what a typical road trip across the country would cost you as you traverse toll road after toll road after toll road charging whatever they want because they know you have no choice but to take their roadway to get where you’re going. Imagine the high cost for businesses to be located along those roads because the private owners also own the right of ways. And of course those right of ways would be “prime real estate” with high costs. Imagine that gas station located there and how much they’d have to charge you because their rent is so high and they have to pay more to supply that gas to because the supply trucks have to pay the high tolls to bring that gas to the station which is all passed along to the consumer.

    Getting the picture here? I do hope so.

  5. Bulletin,

    “Uh…nope, sorry. Your video did @ 3:18.”

    Sorry poor choice of words. Noone was mislead by that but you. War-time spending and peace time spending must both be financed by confiscating resources from taxpayers. Why would there be a difference? The same case you could make for taxing people and saying “oh look you have roads” could be made by the most hawkish republican saying “yes we spent all this money on a tank that exploded but look how much it protected you before it exploded”

    “And your questions about, why didn’t people just voluntarily do it themselves is…well amusing at best. ”

    Do you really not see the difference between a society organized by peaceful, voluntary and mutually beneficial cooperation, and one organized by government force? If they didnt organize and simply do it themselves, then what sense does it make to force them to pay for it and then try to layout some explanation that its really what they wanted because government is the will of the people.

    “I especially love how you assert clean water, utility and sanitation infrastructure killed private sector jobs. ”

    If the government is monopolizing services that could be fulfilled by the private sector how can you claim that they are not killing private sector jobs?

    “I pose some other questions for you. How much did the transcontinental railroad increase business across the country? How many opportunities did it create for expansion of those private sector businesses? The interstate highway system…same questions?”

    So I guess in your world a businessman buys or builds a factory and then just stands around going “gee i hope someone comes and builds a road really soon before i need to ship my products” ? Besides that, forwarding this argument is just making the case for corporate welfare. Why should the government be providing free roads to some businesses, and not every single one of them regardless of cost or location?

    “I don’t see many people agreeing with you once they imagine the realities of such a situation. And speaking of that I challenge you to imagine that.”

    The Privatization of Roads and Highways
    http://mises.org/resources/4084

    Done.

  6. Yes, you are. Sorry but your arguments are not based in a the realities of an ever evolving world. Government projects simply do not kill private sector jobs as they employ NUMEROUS private employers to work on those projects which filters through the economy as those employed people spend money on various goods and services which in turn creates demand for others which leads to more hiring and so on. Are government projects the sole source of job creation? No, of course not but during poor economic times like we’re in now, they are what helps build the economy back up along with other stimulative efforts. Once the economy is strong enough again the government pulls back again and the baton is handed back to the private sector (so to speak).

    The assertion that government hurts the economy more than it helps simply goes against the history of the US, especially from the mid-20th century on. You make the government sound like this massive force that takes peoples money and property and gives nothing back or people don’t benefit from it at all. An assertion that could not be further from the truth.

    Does private industry help further economic growth? Yes.
    Does the government further economic growth? Yes
    Do both of these working in concert with one another spur economic growth? Yes.
    Is privatization of everything the utopian view of a perfectly run society that benefits all? Nope. Sorry. The history of this country is replete with examples of how industry left to its own devices with no oversight does not work.

    NOW we’re done.

  7. “although the tax the 1 percent bit is rhetoric…it won’t even touch our long term debt; to fix the problem Congress must reduce entitlement programs – it’s a matter of math”

    Jack,

    Raising taxes on the 1% will get back the trillion$ that was lost due to the Bush tax giveaway. That money is directly related to the precipitous rise of our national debt, along with these ridiculous wars. However, putting the burden upon those most affected by these bad policy decisions is not the answer. The answer lies in that bloated defense budget, which is mainly an excuse to enrich those in the Military/Industrial complex. Our defense budget is larger than all other countries combined, to what end? Why do we have troops in Germany, S.Korea and other outposts, not to mention the follies that are Iraq and Afghanistan? Let America stop playing empire and start re-building itself. That is where the bloat in the budget lies, but that discussion never seems to be put on the table.

  8. Critical to any society is maintaining good health care for all. Imagine a society where illness is rampant. The cost to government for negligently ignoring the sick, dying and those who will become ill due to lack of proper health care will necessarily be borne by taxpayers in one form or another. Originally, health care was provided in the US by employers because many workplace environments were dangerous. Employers worried about lawsuits from improper adherence to worker safety. –

    See the most recently released blog post at our new web site
    <.http://www.caramoantourpackage.com

Comments are closed.