How to Blow $800 Billion
In his updated version of
Brewster's Millions, President Barack Obama engaged in stunning display of reckless spending without acquiring assets with his $800 Billion
stimulus package. And just like Monty Brewster, President Obama has very little to show from his spending orgy. In his new book "Money Well Spent",
reporter Michael Grabell presents the first detailed analysis of the President's plan, and believe us, it isn't pretty. He has a summary of his book
in The New York Post, writing:
Officially
called the American Recovery and Reinvestment Act, the $800 billion stimulus was the largest economic recovery program in history. Adjusted for
inflation, it was nearly five times more expensive than the Works Progress Administration. It was bigger than the Louisiana Purchase, the Manhattan
Project, the moon race and the Marshall Plan.
Economists and nonpartisan forecasting firms estimate that the stimulus created and saved
more than 2 million jobs. It generated an unprecedented buzz around clean energy. A relatively small pot of education grants goaded 32 states to enact
major reforms, such as tying teacher pay to student performance or lifting caps on charter schools. When the last dime is spent, more than 41,000
miles of roads will be paved, widened and improved; 600,000 low-income homes weatherized; and more than 3,000 rural schools connected to high-speed
Internet.
But despite these achievements, the stimulus ultimately failed to do what America expected it to do — bring about a strong,
sustainable recovery. The drop kick was shanked.
The stimulus was supposed to work like this: First, a flood of money in tax cuts, food
stamps and unemployment checks would get consumers spending. A deluge of education and health-care money would stanch the bleeding in state
budgets.
Then, a wave of “shovel-ready” infrastructure projects would kick in, creating new jobs repaving roads and making
homes more energy efficient. As the economy got churning again, new investments in wind farms, solar panel factories, electric cars, broadband and
high-speed rail would lead America out of the recession and into a 21st century economy competitive with the rest of the world.
That
opening gives an excellent introduction to the basic facts of the plan and provides a cost comparison. But, it gets better:
But it
didn’t happen like that. The White House’s economists, like nearly every forecaster, misread the recession. The state assistance
wasn’t enough to plug the budget holes and, in many cases, the school aid merely delayed rather than prevented teacher layoffs. Infrastructure
projects took months longer to break ground than the public had been led to believe.
That two sentence clip is a perfect explanation
for why this $800 Billion turkey was a complete bomb. Misreading the seriousness of the problem in a rush to satisfy voters (read: union backers)
combined with the short-term nature of the funding essentially ensured the failure of this enormous boondoggle. The post is an excellent and very
detailed breakdown of the failures of this plan, including a very handy graphic on page five and rates as a definite must read.
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