When President Obama signed the American Recovery and Reinvestment Act of 2009, aka the Stimulus bill, many Republicans and Independents were willing to give him the benefit of the doubt. The act approved over $800 billion of taxpayer money for supposedly “shovel-ready” projects across the country, in hopes of fending off a deeper recession. The President’s stated goal for his first legislative triumph was to lower unemployment to seven percent within a year.
Nearly two years later, we have seen unemployment remain at levels near ten percent, and Mr. Obama’s claim that hundreds of thousands of jobs were saved by the Stimulus, seems to ignore the fact that there has been a net loss of millions of jobs since the Stimulus bill was passed. Just this month the unemployment rate crept up to 9.6%, almost the same as where it was over a year ago.
In addition to the ineffectiveness of the bill, there was an unacceptable level of wasteful spending of taxpayer dollars. Senators John McCain (R-AZ) and Tom Coburn (R-OK) recently released a report detailing projects that clearly had no chance of saving or creating jobs. According to the report, some of the projects included in the 2009 Stimulus bill were:
- Half a million dollars to replace windows at an Oregon visitor center that is closed.
- $2 million for researchers to study exotic ants in the Far East.
- $296,000 for a study on dog domestication.
- $762,000 for an interactive choreography program at a university.
- $89,000 to replace sidewalks in Oklahoma, even though they were just replaced five years ago.
The list goes on. The Stimulus bill, designed to create jobs, has done a markedly dismal job at reviving the American economy. So naturally, one would assume that the President and Democrats in Congress have learned from their mistake, and that they would seek to avoid such mistakes in the future by developing alternative solutions.
If you made such an assumption, brace yourself for some discomforting news. In the past week, the President has announced a new plan to get the economy back on track. The “new” plan’s peculiarity is twofold: the proposal of nearly $200 billion in federal economic spending is evidently just a slightly less expensive version of the original stimulus, and the administration has been unusually careful to avoid the word Stimulus when discussing the proposal. During his term, the President has made a point of avoiding terms that he feels are indicative of failure or blunders, most notably his official purging of the Bush-era term “ the War on Terror,” so it is reasonable to wonder why he is now avoiding a term that he previously claimed was a sign of success.
If President Obama’s second economic recovery bill passes, and turns out to be as fruitless as the first bill, the American taxpayer will have seen an unprecedented $1 trillion of their hard-earned money spent on a failed program. This is not to say that the government spending hasn’t saved any jobs, but it has overwhelmingly failed to achieve the objectives of both the President and the American people, many of whom remain jobless and hopeless. To put that $1 trillion number into proper context, the government spent $200 billion less on the Iraq War over a seven-year period, and FDR spent half that amount (adjusted for inflation) on his New Deal programs of the 1930s. What Mr. Obama has to grasp is that the enormous cost of his policy initiatives, such as the Stimulus and healthcare reform, is rapidly adding up, and it is deteriorating the confidence of investors as well as everyday consumers.
For once, America should follow the lead of Europe, which is by and large coming to the realization that austerity measures are the best way to revive a beleaguered economy. The U.K., like the U.S., already attempted the Keynesian method of spending their way out of the recession, and it failed. The increased spending in both the U.S. and U.K. not only fell drastically short of job creation goals, it also caused potential investors to hold on to their money, instead of lending it to financial institutions, the government, businesses, and ordinary citizens. Both economies received a short burst of financial activity after their respective stimulus bills, but they became stagnant after continued reports of government overspending painted a gloomy picture of negligence and naïveté.
This inactivity must be addressed before the government spends more billions of dollars on programs that have not been proven to work. Britain has wisely decided that the best way to restore confidence, and subsequently lending, is by showing that the government can live within its means, because after all, who wants to lend money to an entity that is backed by reckless spending?
America’s economy is on the brink of a double-dip recession, and now that the Obama administration has shaken the confidence of citizens and investors alike, we must make certain that the next hundred billion dollars we spend is not the straw which breaks the camel’s back. The American people have been forced to live within their means because of this recession, and the government should be held to the same standard.