Why Obama's Stimulus Failed

[Chris]

Obama's stimulus isn't even good Keynesian economics.

Why Obama's Stimulus Failed: A Case Study of Silver Spring, Maryland (http://reason.com/blog/2012/07/08/why-obamas-stimulus-failed-a-case-study):
President Obama's top economic advisor Larry Summers laid out ground rules for how stimulus dollars should be spent: The funds must be "targeted" at resources idled by the recession, the interventions must be "temporary," and they needed to "timely," or injected quickly into the economy.

None of that turned out to be true. "Even if you were to believe that government spending can trigger economic growth," says Veronique de Rugy, Reason columnist and senior research fellow at the Mercatus Center, "the money is never spent in a way that's consistent with the conditions laid out by the Keynesians for it to be efficient."


http://www.youtube.com/watch?feature=player_embedded&v=MKCFj_JYb9c#!

[Deadwood]

I would like to have seen a link to this.

I agree with that economist is saying, it has been said before, including Barak Obama "shovel ready wasn't quite as shovel ready as we'd have liked".

But what made the US recovery a failure when those much less ambitious programs had success?

That's what needs to be explained. I think there was an overwhelming preference for union, ngo and Domocrat "friendly" organizations who had no experience in actually creating work, but a trillion dollars worth of oideas that looked good.

I keep thinking of the 2 million dollar grant to re-insulate poor people's homes in Seattle. The money was eaten up with meetings, not one new job was created, but some ngo workers got paid more for attending more meetings.

Now multiply that a few million times and you have one idea why the stimulus plan did nothing.

[michaelr]

The stimulus failed because the monies went to fortune 500's not small business. Fortune 500's don't hire much.

It, like everything this clown does, was a scam for his multinationals.

[Carygrant]

Show me with sources where so called stimulus funny money went?
Or put it another way , are there any examples of anybody getting any , apart from Banks ?

[michaelr]

Show me with sources where so called stimulus funny money went?
Or put it another way , are there any examples of anybody getting any , apart from Banks ?

Easiest request of the week. Big companies make hay off stimulus

(http://money.cnn.com/2009/06/09/news/companies/corporate_stimulus/index.htm)

[JohnAdams]

Show me with sources where so called stimulus funny money went?
Or put it another way , are there any examples of anybody getting any , apart from Banks ?



Ask and it shall be given to you:

http://www.usnews.com/opinion/blogs/economic-intelligence/2012/06/19/solyndra-not-the-only-questionable-obama-loan-to-green-energy (http://www.usnews.com/opinion/blogs/economic-intelligence/2012/06/19/solyndra-not-the-only-questionable-obama-loan-to-green-energy)


The 1705 program (under which Solyndra received funding) deserves particular attention. This program is a product of the economic stimulus bill of 2009. The data shows that:

26 projects were funded under the 1705, and guaranteed roughly $16 billion in total.
Some 2,378 permanent jobs were claimed to be created under the program. This works out to a potential cost per job of $6.7 million.
The recipient of the most 1705 loans is NRG Energy Inc.
NRG Energy Inc. received $3.8 billion (23.7 percent of the overall amount guaranteed under the 1705).
Four companies received 64 percent, or $10.3 billion, of the total amount guaranteed under the 1705 program.


There's just one example of Obammy's so called stimulus going to political cronies instead of where it was allegedly supposed to go too. And just one reason why Obammy's bogus stimulus was, well just that, a bogus payoff to his political cronies, that our children's children will be paying for.

Way to go there libs and leftists who voted to elect this man to sit in our Whitehouse.

[Carygrant]

Thanks John and Michael for that kindness .
My understanding is that US combined QE1 and 2 was $1600 billion .
Your links appear to show stimulus action to companies was a total that is peanuts .Compared to the 1600 billion figure ..
If I have read matters correctly , the Banks got everything except a few crumbs .
That certainly is what happened here because Banks were scared rigid of their own and undeclared debt toxicity and the desperate need to re capitalise , scared of inter bank lending and any other lending unless payback could metaphorically be promised in gold and tied with pink ribbons .
My point therefore stands and I suspect there was no significant stimulus -- it was all BS ( Bank Scammed in this instance).

[Trinnity]

Show me with sources where so called stimulus funny money went?
Or put it another way , are there any examples of anybody getting any , apart from Banks ?It's to my understanding that a lot of it went straight into state govts for budget shortfalls. *black hole in space*
Gov. Bev Purdue did that here in NC.

[Peter1469]

Thanks John and Michael for that kindness .
My understanding is that US combined QE1 and 2 was $1600 billion .
Your links appear to show stimulus action to companies was a total that is peanuts .Compared to the 1600 billion figure ..
If I have read matters correctly , the Banks got everything except a few crumbs .
That certainly is what happened here because Banks were scared rigid of their own and undeclared debt toxicity and the desperate need to re capitalise , scared of inter bank lending and any other lending unless payback could metaphorically be promised in gold and tied with pink ribbons .
My point therefore stands and I suspect there was no significant stimulus -- it was all BS ( Bank Scammed in this instance).

I think that you are correct.

[Carygrant]

It's to my understanding that a lot of it went straight into state govts for budget shortfalls. *black hole in space*
Gov. Bev Purdue did that here in NC.


And that I believe . I recall now that I was told hundreds of cities and quite a few states were bankrupt at least two years ago ..
The Government changed the law to ensure that they were not obliged to rescue . However , the Federal Reserve have independent and discretionary powers , and what you say is highly believable .
Is that a fair summary or not?

[Goldie Locks]

It failed because that crap has never worked. The definition of insanity is doing the same thing over and over again and expecting a different result. That is the Ubama ideology.

[Trinnity]

It failed because of many reasons. Too many to even list. In fact, everything about him is one big fail. Oh, but he got Bin Laden. Wait. That was the Navy Seals - he just took the credit.

[Deadwood]

It failed because that crap has never worked. The definition of insanity is doing the same thing over and over again and expecting a different result. That is the Ubama ideology.



Well, yes AND no. The similar packages in Canada and Europe, particularly Great Britain did have an impact. But then both countries have been at the game longer and they are not as politically corrupt.

However, Obama is the maker of his own undoing. The package was too big, and he and his minions created far too much expectation. The money had barely begun to flow and he was back-peddling about jobs "saved or created."

[Peter1469]

Debt spending is fine, to a point. We crossed that a long time ago.

[Chris]

I would like to have seen a link to this.

I agree with that economist is saying, it has been said before, including Barak Obama "shovel ready wasn't quite as shovel ready as we'd have liked".

But what made the US recovery a failure when those much less ambitious programs had success?

That's what needs to be explained. I think there was an overwhelming preference for union, ngo and Domocrat "friendly" organizations who had no experience in actually creating work, but a trillion dollars worth of oideas that looked good.

I keep thinking of the 2 million dollar grant to re-insulate poor people's homes in Seattle. The money was eaten up with meetings, not one new job was created, but some ngo workers got paid more for attending more meetings.

Now multiply that a few million times and you have one idea why the stimulus plan did nothing.

Link was in post, but I'll give it again: http://reason.com/blog/2012/07/08/why-obamas-stimulus-failed-a-case-study, and that blub links to fuller discusion @ http://reason.com/blog/2011/12/08/why-obamas-stimulus-failed-a-case-study.

[Chris]

Thanks John and Michael for that kindness .
My understanding is that US combined QE1 and 2 was $1600 billion .
Your links appear to show stimulus action to companies was a total that is peanuts .Compared to the 1600 billion figure ..
If I have read matters correctly , the Banks got everything except a few crumbs .
That certainly is what happened here because Banks were scared rigid of their own and undeclared debt toxicity and the desperate need to re capitalise , scared of inter bank lending and any other lending unless payback could metaphorically be promised in gold and tied with pink ribbons .
My point therefore stands and I suspect there was no significant stimulus -- it was all BS ( Bank Scammed in this instance).

Quantitative Easing (QE) actually de-stimulates the economy.

Definition of 'Quantitative Easing' (http://www.investopedia.com/terms/q/quantitative-easing.asp#ixzz20Af6Br5g): "A government monetary policy occasionally used to increase the money supply by buying government securities or other securities from the market. Quantitative easing increases the money supply by flooding financial institutions with capital, in an effort to promote increased lending and liquidity."

But what is the effect of increasing the money supply? Why it inflates money, it decreases the value of money, it reduces the purchasing power of consumers.

Moreover, IIRC, the Fed at the same time increased interest rates incentivizing banks to hold onto the money it had just quantitatively eased.

Now, we can argue the good or bad of any of these policies, but these mixed signal government is sending is why those animal spirits are so tame these days, why people are reluctant to invest. You don't know which way this government is going to turn next in its frantic insistence it must do something, so anything!!

[Goldie Locks]

Well, yes AND no. The similar packages in Canada and Europe, particularly Great Britain did have an impact. But then both countries have been at the game longer and they are not as politically corrupt.

However, Obama is the maker of his own undoing. The package was too big, and he and his minions created far too much expectation. The money had barely begun to flow and he was back-peddling about jobs "saved or created."


Sorry to disagree, but it doesn't work...The money all went to the banks and overseas...And now...make way for QE3!!! Lets see if that works any better.