'Stimulus' Sugar High: "Short-Term Fix" Didn't Work Before, Won't Work Now
While Republicans are removing barriers to long-term job growth and looking for ways to work together with the White House, the president is on a campaign-style road trip pitching his jobs plan – a “short-term fix” that he says “would mean an additional 1.9 million jobs.” Sound familiar?
If so, that’s because the Obama Administration made the same kinds of predictions about the last “stimulus” spending bill, even predicting it would “keep the unemployment rate below 8%.”
Republicans agree with portions of the president’s jobs plan – such as a change in the three percent withholding rule that affects government contractors, which is expected to be considered on the House floor next week – and are working to enact those initiatives into law. But other aspects of the president’s plan are clearly a rehash of the Administration’s failed “stimulus” spending philosophy, such as payments to state and local governments, federal school construction spending, and so-called neighborhood stabilization grants. Republican leaders detailed these areas of concern in a September 16 memo.
Economist Kevin Hassett once compared these kinds of “stimulus” policies to a “sugar high” that leaves you “worse off” than before. And in fact, the last “‘stimulus’ sugar high” left us with fewer jobs and more debt; why should the American people think another short-term fix would be any different?
DEMOCRATS SAID THE SAME THINGS ABOUT THE LAST FAILED “STIMULUS”: After the president pitched his new “stimulus” plan, ABC News said, “If the [president’s] refrain sounds familiar, it’s because it is”…
- In February 2009, President Obama said the “stimulus” spending bill would “save or create over three million jobs — almost all of them in the private sector.” The Administration quietly dropped the “created or saved” metric last year when those predictions didn’t pan out.
- The White House said the “stimulus” focused “on ready-to-go repairs and maintenance” – what Vice President Biden later called “shovel-ready” projects. President Obama admitted this summer those “shovel-ready” projects weren’t “as shovel-ready as we expected.”
- In June 2009, the president “vowed” to “accelerate stimulus spending” and create or save “600,000 jobs by summer's end.” A year later, VP Biden said the ‘stimulus’ “is working” as he kicked off “Recovery Summer.” None of this happened, and “Recovery Summer” fizzled.
AND HERE IS WHAT THOSE SHORT-TERM “STIMULUS” POLICIES GOT US: The unemployment rate has exceeded eight percent every month since the president’s ‘stimulus’ spending bill was signed into law…
- Since the “stimulus” was enacted in February 2009, nearly 1.2 million jobs have been lost and the unemployment rate and has averaged 9.4 percent.
- Minorities face disproportionately high unemployment rates, with the unemployment rate at 16 percent for African Americans and 11.3 percent for Hispanic or Latino Americans.
- The House Ways & Means Committee says “49 out of 50 States still have not reached the Administration’s job creation projections” under the “stimulus.”
- Associated Press reported 10 months after the “stimulus” began that “a surge in spending on roads and bridges has had no effect on local unemployment… Spend a lot or spend nothing at all, it didn't matter.”
- Even the president’s former chief economist regrets her “forecast that a big shot of federal spending would save millions of jobs and keep the unemployment rate under 8 percent.”
WHY SHOULD THE AMERICAN PEOPLE THINK ANOTHER “STIMULUS” WOULD BE DIFFERENT?: CNN says “a record high six out of ten Americans” think the president’s policies “will fail.” They’re not alone…
- The president says his new plan will “boost hiring and provide a jolt to the stalled economy,” but “economists on both ends of the political spectrum” say it “might not make much of a splash…”
- Stanford economist John B. Taylor says temporary measures like these “will not jump-start the recovery, which is what is needed to really reduce unemployment.” Democratic economist Mark Zandi “noted that benefits from the Obama plan wouldn't be lasting ones.”
- Peter Morici, University of Maryland economist, says the president’s tax hikes “would discourage hiring by many smaller businesses...” Glenn Hubbard, dean of Columbia Business School, agrees and says the president’s advocacy for higher tax rates “dampens” job growth.
- Speaker Boehner said the president’s proposals “are a poor substitute for the pro-growth policies that are needed to remove barriers to job creation in America,” and that job creators have “been hurt by a government that offers short-term gimmicks rather than fundamental reforms that will encourage long-term economic growth.”
Republicans have outlined areas of common ground with the president and pledged to consider elements of his jobs plan – and that’s happening. But much of the plan consists of the same kinds of short-term “stimulus” fixes that haven’t worked before. The Republican Plan for America’s Job Creators is focused on removing government obstacles to long-term economic growth – the kind of reforms needed to end the uncertainty facing small businesses and help create new private-sector jobs.