Noth­ing ‘trans­par­ent’ about the stim­u­lus plan

The Washington Times Weekly - - Commentary - Don­ald Lam­bro

For a pres­i­dent who promised his ac­tions would be the most trans­par­ent in U.S. his­tory, key de­tails in Barack Obama’s eco­nomic stim­u­lus pro­gram have been frus­trat­ingly opaque. Some might call them in­vis­i­ble or il­lu­sion­ary, cer­tainly slip­pery, maybe even tricky.

“Does any­one re­ally know how many jobs the stim­u­lus has ‘saved or cre­ated’? Does any­one know how much stim­u­lus money has ac­tu­ally been spent?” House Repub­li­cans asked June 8.

Not with any pre­ci­sion. Mr. Obama and his ad­min­is­tra­tion throw out a lot of big, im­pres­sive num­bers: We will spend $800 bil­lion to “save or cre­ate” 3.5 mil­lion jobs. But it turns out the num­bers and goals of­ten come with a lot of math­e­mat­i­cal caveats, def­i­ni­tional con­tin­gen­cies and nar­rowly pro­scribed, con­vo­luted loop­holes and es­cape hatches.

“The truth is, even the Obama ad­min­is­tra­tion isn’t able to say for sure how many jobs the stim­u­lus is sav­ing and/or cre­at­ing,” ABC News bluntly re­ported two weeks ago.

“With its prom­ises to ‘save or cre­ate’ “ so many jobs, the news net­work says “the Obama White House has set a fuzzy bar for it­self; no one will ever re­ally be able to say whether it’s been cleared.”

Vice Pres­i­dent Joseph R. Bi­den Jr.’s chief econ­o­mist Jared Bern­stein says it’s im­pos­si­ble to say how many projects ap­proved by the ad­min­is­tra­tion have re­ally got­ten un­der way be­cause “it’s such a mov­ing tar­get.”

For ex­am­ple, take the jobs num­ber. The White House said at the end of May that the pro­gram had saved or cre­ated nearly 150,000 jobs. But that’s al­most im­pos­si­ble to ver­ify be­cause the jobs cal­cu­la­tion is ac­tu­ally based on es­ti­mates of how poorly the econ­omy and the jobs pic­ture might have been if the stim­u­lus had not been en­acted.

And what about this so-called “saved jobs” con­cept? That’s a very tricky num­ber open to all kinds of math­e­mat­i­cal Ponzi scheme con­fig­u­ra­tions.

“The coun­try has lost 1.3 mil­lion jobs since Fe­bru­ary, a fig­ure the Obama ad­min­is­tra­tion says would have been far higher if not for the re­cov­ery ef­fort,” writes White House re­porter Charles Babington of the As­so­ci­ated Press. Ap­par­ently you can save all kinds of jobs with that kind of soft math.

So what about that 150,000 jobs num­ber? It turns out that th­ese are not nec­es­sar­ily longterm, full-time jobs. Many, if not most of them, will end when the pub­lic works money runs out and the project is com­pleted.

Af­ter the June 5 un­em­ploy­ment num­bers showed the job­less rate had jumped to 9.4 per­cent in May and a Gallup poll found pub­lic sup­port for Mr. Obama’s han­dling of the econ­omy was slip­ping, the White House said it was go­ing to speed up the stim­u­lus ex­pen­di­tures. told re­porters on Mon­day: “We’re up to about $135 bil­lion in terms of obli­ga­tions.”

“Obli­ga­tions” sounded a bit too vague to NBC’s White House re­porter Chuck Todd. “Ob­li­gated, not nec­es­sar­ily spent yet?” he in­quired.

“Right,” Mr. Bern­stein fi­nally said. “Spent out is closer to $44 bil­lion.” So here we are at midyear, and the ad­min­is­tra­tion has ac­tu­ally spent a lit­tle more than 5 per­cent of its stim­u­lus money — a small frac­tion of what Mr. Obama said was needed to move the once- stan­ti­ate that claim. “No. That would be a very dif­fi­cult thing for any­body to sub­stan­ti­ate,” Mr. Hall replied.

The very na­ture of spending stim­u­lus pro­grams — and the rea­son they never work — is that it takes a very long time for the money to make its way through the gov­ern­ment’s snail’s-pace bu­reau­cracy to the states and lo­cal­i­ties and through the bid­ding process be­fore any jobs are cre­ated.

Mr. Obama’s economists warned of this in pol­icy po­si­tion pa­pers last year. By the time most of the money is “spent,” the re­ces­sion is long over. Only a frac­tion of the $800 bil­lion will be spent in this fis­cal year, which ends Sept. 30. Seventy per­cent of the money won’t be spent un­til the end of the sum­mer in 2010, when the ad­min­is­tra­tion says the econ­omy will be grow­ing again.

In the end, de­spite the ad­min­is­tra­tion’s be­lief that it is re­ally cre­at­ing net new jobs, each dol­lar it bor­rows or taxes out of the econ­omy to cre­ate, in Mr. Bi­den’s words, “make-work jobs,” is one dol­lar less avail­able to the pri­vate sec­tor to in­vest and spend on real, full-time jobs.

Don­ald Lam­bro is chief po­lit­i­cal cor­re­spon­dent of The Wash­ing­ton Times.

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