Fact check – Stimulus “exactly what was needed”, success

In the Vestal Public Library, Dan Lamb, speaking on behalf of Rep. Maurice Hinchey for the night, made a statement about the Stimulus. He stated that the Stimulus was “exactly what was needed” at the time. He also stated that supporters of his boss should be as proud as Rep. Hinchey is about his actions in support of his constituents. He later discussed the Stimulus as a success – having 1.3 – 3 million jobs created or ‘saved’.

We want to point out that Mr. Lamb later verified the source for this figure, and therefore the success of the Stimulus, come from the CBO. Which is in fact from the August 2010 report on the Stimulus. We do not dispute the range stated by the CBO, nor do we question either Mr. Lamb or Rep. Hinchey for quoting this range.

But we do dispute the implication that this range verifies success. Websters Online Dictionary defines success as: “favorable or desired outcome”. We will keep this in mind.

The Stimulus, originally envisioned by Speaker Nancy Pelosi in October 2008 as a $50 billion proposal, swelled in scope and price the week of President Obama’s election, eventually reaching $787 billion. The claim was that the nation was on the brink of a depression – to paraphrase President Obama. The key economic advisors to the President (all but 1 now having left service to the President and public duty) claimed – and were repeatedly quoted by Democrats at the time – that if nothing was done unemployment would rise to 9% and eventually stagnate at over 10% until 2014 or so. If the Stimulus were to be passed unemployment would be capped at 8%, and by the 4th quarter of 2010 would be receeding under 7.5% and falling.

Therefore, the definition of success is not just that 3.5 million jobs be created or ‘saved’ (a term that has yet to be reasonably defined), but that unemployment be under 8%, the economy stable, and the at least latter stages of a recession be in place.

Now that we know the terms of success, let us evaluate what the Stimulus has done – based only in fact – and therfore determine if pride and accolades should be taken.

The Stimulus is currently projected to cost $814 billion, an increase of $27 billion. That is a revision from an earlier estimate of $862 billion. This is from the CBO. Therefore the Stimulus has failed to be on budget, and it is unknown what the actual cost will be especially since the on-going projections vary massively (massively being defined as the GDP of nations between the size of Latvia and Angola) – not accounting for interest payments on the national debt it increased.

The unemployment rate at the start of the current recession (Dec. 2007) was 4.8%. At the time of the Presidential election, and the swelling of the Stimulus proposal, unemployment was at 7.1%. At the time that the Stimulus was proposed to the American people (Feb. 2009) it was 8.9%. Unemployment has never been back to this level since. By Jan. 2010 unemployment hit the current high of 10.1%, and as of Oct 1st sat at 9.5%.

Therefore, according to the U.S. Bureau of Labor Statistics, the Stimulus has failed to cap unemployment at the desired level. It has failed to stabilize the economy. It has, in real numbers, failed to create any jobs and failed to ‘save’ jobs – however that term is wished to be defined.

Stepping away from the absolute facts, there are the softer facts which may be interpeted however anyone might wish. Those numbers show that the average cost for each job claimed to have been created and/or ‘saved’ is roughly $200,000 – jobs that pay roughly $30,000. Again these numbers vary from place to place and have been subject to improper documentation or just plain old bad math; but the consensus by everyone that evaluates the figues is that an inordinate amount of money is being spent on a per job basis.

There is also no question that the Stimulus was proposed to create some 60% of jobs in the private sector. There is equally no question that actual job creation in the private sector has never approached that percentage – arguably if any positive growth has occured at all. Which ignores the question of the long-term sustainability of the jobs, which debatably does not exist now.

Given these factual and subjective thoughts to contemplate, let us return to success and it’s definition. Has the Stimulus achieved success?

Also consider this fact. In the report from the CBO where the range (not an exact figure, and about as accurate as comparing the national population of Trinidad and Tobago to Panama) the report also stated that the positive effects of the Stimulus will

“gradually diminish during the second half of 2010 and beyond”

Therefore, the best possible outcome from the Stimulus has already come and passed. Which may be proven to be fact if the report by Gallup of an unemployment level shockingly increasing to 10.1% in September is accurate.

So in conclusion, the question once again is

By what criteria can the Stimulus be called a success?

That answer is probably the equal of another item, a coincidence if you will. While there is no doubt that Mr. Lamb has great pride in his work and his employer, Rep. Maurice Hinchey apparently does not hold the same regard for his votes in Congress. While we may be inaccurate, to our knowledge and research, there is not one political ad for re-election that shows Rep. Maurice Hinchey – or any other Democrat up for re-election – that promotes their voting record in Congress (Stimulus, Health Care Reform, Cap & Trade, DREAM Act, failure to pass a budget, failure to take a vote on the Bush Tax cuts).

Why should constituents be proud of Rep. Maurice Hinchey? There may be many reasons, but the Stimulus is definitely not among them.

Only your support allows us to provide mid-term election coverage, political event coverage, and our political commentary. Visit Alchemy at World of VASS, and/or World of Vass, and/or our store on eBay – help keep us going. We appreciate your support.

About the Author

Michael Vass
Born in 1968, a political commentator for over a decade. Has traveled the U.S. and lived in Moscow and Tsblisi, A former stockbroker and 2014 Congressional candidate. Passionate about politics with emphasis on 1st and 2nd Amendments.

Thank you for lending your voice. We appreciate hearing what you have to say.

%d bloggers like this: