Fed Govt Stimulus Destroys Jobs, study reveals

[Savoir Faire-Demogague in NJ]

I am surprised no one has posted this one. An Ohio State University study reveals the fed govt stimulus spending has destroyed one million private sector jobs, while creating 450,000 govt jobs.

New Study: One Million Private-Sector Jobs “Destroyed/Forestalled” by “Stimulus” Spending
www.speaker.gov/News/DocumentSingle.aspx?DocumentID=241747

Washington (May 16)

A new study by Timothy Conley and Bill Dupor, economists from the University of Western Ontario and The Ohio State University respectively, concludes that President Obama’s “stimulus” spending bill “destroyed/forestalled roughly one million private sector jobs.” From the study: web.econ.ohio-state.edu/dupor/arra10_may11.pdf

“Our benchmark results suggest that the ARRA created/saved approximately 450 thousand state and local government jobs and destroyed/forestalled roughly one million private sector jobs. State and local government jobs were saved because ARRA funds were largely used to offset state revenue shortfalls and Medicaid increases rather than boost private sector employment. The majority of destroyed/forestalled jobs were in growth industries including health, education, professional and business services.”

Read the full study here. web.econ.ohio-state.edu/dupor/arra10_may11.pdf
And click here to read recent analysis by Speaker Boehner’s policy analyst, David Stewart, who says “the economy has averaged an unemployment rate of 9.5 percent” since the “stimulus” was enacted – far above the 8 percent ceiling promised by the Obama Administration.

Economists say spending cuts are needed to create a better environment for private sector job growth, not tax hikes or more “stimulus.” That’s why – despite demands by the president and Democrats for a so-called “clean” debt limit increase and a “tax hike trigger” – Speaker Boehner and Republicans are listening to the American people and have said there will be no debt limit increase without serious spending cuts and meaningful budget reforms. And tax hikes are off the table.

Click here to learn more about the Path to Prosperity, the House-passed plan to spur private-sector job growth, stop Washington from spending money it doesn’t have, preserve programs like Medicare for current retirees and future generations, and pay down our debt over time.

[Politically_Incorrect12]

Interesting...

[ty]

There's a talk about a double dip recession. Or is it Depression?

www.businessday.co.za/articles/Content.aspx?id=143028


Watch US 10 year bonds for signs of double dip recession
Leading economist and financial strategist Clem Sunter says the worlds’ economy could be in for a tough time this year and he is watching US bonds closely


DES LATHAM

Published:2011/05/17 02:31:58 PM

Resected economic analyst Clem Sunter says he’s not convinced the world economy is out of danger yet and has advised investors to watch the US 10 year bond as closely as possible for signs of a double dip recession.

Speaking at a Frontfoot Business Breakfast in Sandton Johannesburg today, Sunter said there are signs that the world economy is in for a difficult year.

"One of the flags we are using to gauge the world economy is the crisis in Japan. The earthquake has caused many problems, while Tokyo’s debt to GDP ratio of 200% is largely because of people who owe money to the government and the real impact is on China," he said.

"China is Japan’s main trading partner, and China needs to grow at 8 to 10 percent to bolster global growth."

"But China is now also experiencing a property bubble," he added.

"While we believe there is still a 40% probability that the world economy could grow, we’re monitoring US bonds."

He says the US ten year bond performance will give good notice about how well the world’s economy is doing.

"We could then get into what we’re calling an ultraviolet phase, where the emerging markets grow while the established markets slow."

He however warned that the ogre of double dip recession is very real.

"There’s a misconception about the last time the global economy failed that the depression took place in 1929," he said.

"But it didn’t, it actually really started in 1931 and 1932 when the Dow plunged from 14000 points to 1000. We are watching the US 10 year bond closely, which is now at about 3,15%," said Sunter.

"It is nothing like the Greek bond, which has slumped to about 20%, but if I was an investor, I would be watching that US bond very very closely to identify a jump in the rate as early as possible."

[Deleted]

Not surprising at all. I do think that even though the Dems seem to be the vocal majority the more silent majority is swinging toward Republican ideas. All anyone has to do is read their plans to see the future success of our country lies in more conservative ideas. I hope they hold firm in Washington. They have to or, unlike Dems in solid Dem territory, conservatives will boot them out of office if given the chance.

[fairlycrazy23]

May 17, 2011 8:53:19 GMT -5 @ty said:

There's a talk about a double dip recession. Or is it Depression?

"There’s a misconception about the last time the global economy failed that the depression took place in 1929," he said.

"But it didn’t, it actually really started in 1931 and 1932 when the Dow plunged from 14000 points to 1000. We are watching the US

There are a lot of misconceptions about the 'great depression' one is that the war (or just government spending in general) got us out of it.

[Deleted]

Correct, wolf!!! All our screaming and howling for all these years confirmed!!
;D

[wyouser]

How secure are these govt created jobs going forward? There appear to be some pretty large government layoffs coming at the state and local levels now that stimulus funds have or are running out.

[Deleted]

Just like Pubs said a few years ago-- let it crash if it has to crash. IF we had not delayed the inevitable then we could be well in to recovery now. So I hear.

[Savoir Faire-Demogague in NJ]

How secure are these govt created jobs going forward?

Beats me...but hints of QE3 have been heard in recent months.

[AgeOfEnlightenmentSCP]

This ain't 1995. I think those talking of QE3 have greatly underestimated the present day active voter, and even slightly underestimated the Republican controlled Congress.

[Savoir Faire-Demogague in NJ]

I think those talking of QE3 have greatly underestimated the present day active voter, and even slightly underestimated the Republican controlled Congress.


Someone correct me, but the decision to move forward with another round of Quantitative Easing is made by "The Bernanke", not by congress.

Of course QE is merely the Fed buying US treasuries, which gets complicated because at the moment the govt cannot float more debt.

[AgeOfEnlightenmentSCP]

Oh, that's true- but Congress holds the purse strings, but there is a large and growing number of Republicans willing to hold up everything to get control of the spending and debt.

[AgeOfEnlightenmentSCP]

QE has turned out to be so much pushing on a string anyway. It would be inflationary if it was getting out into the system, but I think one reason inflation, while definitely out there, has been subdued is that the stimulus just isn't being accepted by the market.

[Deleted]

Smart people... keep talking....

[ugonow]

Just like Pubs said a few years ago-- let it crash if it has to crash.

Hmmm I remember them saying there is no recession, there is no recession...it is all in Americans minds..there is no recession,the economy is fundamentaly strong,there is no recession...OMG,....We are dead... the banks are all going to fail TARP TARP..... Now it is... there is no recovery...there is no recovery....

[AgeOfEnlightenmentSCP]

I'm amazed we need a "study" to tell us the stimulus failed.

[ugonow]

Why do I have this nagging feeling that if I look,I will find studies that say it helped the economy? Having said that, My personal feeling is that it might have helped a little bit,but not worth the cost. Not so sure about the destroyed jobs part of it...but then I am no expert, and like I said,I bet there are studies that say the opposite of this one,even the so caklled experts don't agree.

[Deleted]

The whole #s deal was about jobs SAVED, which amounted to paybacks to Unions, etc. There is NO WAY to count jobs actually saved, and the numbers are out there for jobs created.. soon to be lost. Waste of money. Another huge gov't lie.

[Savoir Faire-Demogague in NJ]

Why do I have this nagging feeling that if I look,I will find studies that say it helped the economy?

A large chunk of stimulus money went to states and localities to keep them from going bankrupt and to pay for other govt mandated services such as medicaid for example. 450,000+ govt jobs were created/saved.
If anything was improved, it was state and local govts...kept them alive.

[ugonow]

There is NO WAY to count jobs actually saved,

Wouldn't that make the study questionable? Like I said, I think the cost was too high, but there is actually a growing number [albeit slowly] number of private sector jobs.

[ugonow]

I figured it wouldn't be hard to find studies saying otherwise--- "It's no surprise that the administration would proclaim its own policies a success. But its verdict is backed by economists at Goldman Sachs, IHS Global Insight, JPMorgan Chase and Macroeconomic Advisers, who say the stimulus boosted gross domestic product by 2.1% to 2.7%.

It's impossible to determine precisely how many jobs or how much growth the stimulus program caused. In a nearly $14 trillion economy, economists can't go employer to employer counting new hires. And there are too many moving parts to confidently link any single factor with individual hiring decisions. Roughly one-third of the stimulus, for example, came in the form of tax cuts, which are designed to boost demand for a wide array of products and eventually result in related hiring.

But to estimate the answers to such questions, economists rely on models based on historical relationships between various policies and real-world results. Earlier this month, Zandi and co-author Alan Blinder, former vice chairman of the Federal Reserve, released the most detailed assessment of the government's efforts to combat the so-called Great Recession. Neither economist is regarded as a partisan firebrand. Zandi, for example, backed John McCain in the 2008 presidential campaign and has advised members of both parties.

Their conclusion: The fiscal stimulus created 2.7 million jobs and added $460 billion to gross domestic product. Unemployment would be 11% today if the stimulus hadn't been passed and 16.5% if neither the fiscal stimulus nor the banks' rescue had been enacted, according to Zandi and Blinder. "It's pretty hard to deny that it had a measurable impact," Zandi said."

[floridayankee]

May 17, 2011 10:56:15 GMT -5 @krickitt said:

Correct, wolf!!! All our screaming and howling for all these years confirmed!!
;D

Maybe if the right wasn't so racist people would have listened.

[maui1]

we will have qe3, but it just won't be called that, and it will be made less public...........but you can bank on it. there is nothing in this market but gov't stimulus, so it can't be removed, if they (and they aren't) aren't willing to let the economy fall, right before a presidential election year.

[fairlycrazy23]

May 17, 2011 13:59:40 GMT -5 ugonow said:

I figured it wouldn't be hard to find studies saying otherwise--- "It's no surprise that the administration would proclaim its own policies a success. But its verdict is backed by economists at Goldman Sachs, IHS Global Insight, JPMorgan Chase and Macroeconomic Advisers, who say the stimulus boosted gross domestic product by 2.1% to 2.7%.

It's impossible to determine precisely how many jobs or how much growth the stimulus program caused. In a nearly $14 trillion economy, economists can't go employer to employer counting new hires. And there are too many moving parts to confidently link any single factor with individual hiring decisions. Roughly one-third of the stimulus, for example, came in the form of tax cuts, which are designed to boost demand for a wide array of products and eventually result in related hiring.

But to estimate the answers to such questions, economists rely on models based on historical relationships between various policies and real-world results. Earlier this month, Zandi and co-author Alan Blinder, former vice chairman of the Federal Reserve, released the most detailed assessment of the government's efforts to combat the so-called Great Recession. Neither economist is regarded as a partisan firebrand. Zandi, for example, backed John McCain in the 2008 presidential campaign and has advised members of both parties.

Their conclusion: The fiscal stimulus created 2.7 million jobs and added $460 billion to gross domestic product. Unemployment would be 11% today if the stimulus hadn't been passed and 16.5% if neither the fiscal stimulus nor the banks' rescue had been enacted, according to Zandi and Blinder. "It's pretty hard to deny that it had a measurable impact," Zandi said."

Of course it had an impact, they injected 800 billion into the economy and got $460 billion increase to gdp. I don't see how anyone could argue that borrowing money from outside the economy and putting it into the economy wouldn't increase the GDP short term.

[maui1]

I don't see how anyone could argue that borrowing money from outside the economy and putting it into the economy wouldn't increase the GDP short term.


if that is what they were doing, but it is not what they are doing. the fed is buying federal debt, with debt. nothing is being injected anywhere, as their is nothing to be injected. all that is happening is the dilution of the dollar, by the increase in the supply of dollars.

all that is really happening is the gov't is kiting. which would be prosecuted by the gov't if not being preformed by the gov't.

[maui1]

kiting..........

the drawing against balances credited to uncollected checks. By writing checks drawn on two or more out-of-town banks, a person temporarily short of cash can write an interest-free unauthorized bank loan or temporarily inflate his account balance to improve his chances of getting a loan.

Read more: www.answers.com/topic/check-kiting#ixzz1MhuRewGW

[luckyme]

{ "But China is now also experiencing a property bubble," he added. }

Yeah, saw the video yesterday on China's "Ghost Towns"; gov't is pumping billions of dollars into building these large cities and hardly anybody lives in them. With so many empty buildings, many are actually deteriorating. It was spooky.

[maui1]

china equals dubai..

most knew this was in the cards. again........you can't borrow your way to prosperity, and or out of debt.......for that matter.

[maui1]

every gov't in the world, when given the opportunity to steal, will steal! you give gov'ts the opportunity to steal, by giving them the power to use a fiat currency.

even the most controlled, conservative, of countries will steal from their citizens, thru inflation, via the use of fiat currencies.

why free citizens give this right to it's gov't , i will never know, but thru out time, it always happens.