Busted: Bankers and The Global Economy

January 27, 2009

Obama: When is a Stimulus not a Stimulus?

barack-and-energyWhen is a U.S. government stimulus not a stimulus? The latest rendition of the $825 billion economic stimulus plan won’t be spent very quickly for what President Obama has specified to the American public. What do I mean? The Congressional Business Office released data that suggests that it will take longer than expected to boost the economy. Why? The government wouldn’t be able to spend at least one-fourth of a proposed $825 billion economic stimulus plan until after 2010. Even then, only about 12% of the stimulus is actually being used for stimulus.

According to the preliminary report, the government would spend about $26 billion of the money this year and $110 billion in 2010. $103 billion would be spent in 2011, $53 billion would be spent in 2012 and $63 billion between 2013 and 2019. That is stretching the total stimulus plan for a decade.

Wouldn’t you like to see the report for yourself? Now that the details have seen the light of scrutiny, those wonderful PDF files that American taxpayers have paid for have been rendered unavailable in a similar fashion to the EESA budget details in 2008.

The Obama administration said $3 of every $4 in the package should be spent within 18 months to have maximum impact on jobs and taxpayers.

• Less than $5 billion of the $30 billion set aside for highway spending would be spent within the next two years, the CBO said.

• Only $26 billion out of $274 billion in infrastructure spending would be delivered into the economy by the Sept. 30 end of the budget year, just 7 percent.

• Just one in seven dollars of a huge $18.5 billion investment in energy efficiency and renewable energy programs would be spent within a year and a half.

• About $907 million of a $6 billion plan to expand broadband access in rural and other under-served areas would be spent by 2011.

• Just one-fourth of clean drinking water projects can be completed by October of next year.

• $275 billion worth of tax cuts to 95 percent of filers and a huge infusion of help for state governments is to be distributed into the economy on an uncertain time line.

What is the stimulus really for?

• The House stimulus bill includes an extra $87 billion in federal aid to state Medicaid programs.

• It allots some $120 billion to boost state and city education programs.

• There’s $4 billion for state and local anti-crime initiatives in the legislation, not to mention $30-plus billion for highways and other infrastructure projects.

• $6.9 billion to help state and local governments make investments that make them more energy efficient and reduce carbon emissions.

• $87 billion to states, increasing through the end of FY 2010 the share of Medicaid costs the Federal government reimburses all states by 4.8 percent, with extra relief tied to rates of unemployment.

• $120 billion to states and school districts to stabilize budgets and prevent tax increases and deep cuts to critical education programs.

Overall, about one-quarter of the entire $825 billion recovery package would be devoted to activities crucial to governors, mayors, and local school boards. Out of 157 items, 117 have nothing to do with job production or employment/economic stimulus per Representative Mark Kirk.

The bottom line is that the latest stimulus plan is not an economic stimulus plan at all, but rather a bailout for government entities and federal programs. Most of the stimulus money that has been planned to be spent this year is not for economic stimulus at all. The nation needs more economic “energy” put in the right places if we are going to spend the money at all. ~ E. Manning

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