Stimulus Anniversary a Dubious Mark

February 22, 2011 Last week marked the two-year anniversary of the stimulus, but you didn't hear much fanfare from those who once advocated for it. The spending package that cost over $1 trillion was supposed to lead our economy out of the doldrums and put the unemployed back to work. Supporters of the stimulus believed we needed to spend our way to a solution. Yet two years later, it has failed to live up to the promises. Think back to February 2009, when many were advocating for the stimulus as a means to boost the economy and create jobs. The Obama Administration presented us with a now-famous chart with two projections: one that estimated future U.S. job creation with the stimulus, and one without it. We were told that, without the stimulus, the unemployment rate in the first quarter of 2011 would be above 8 percent. If the stimulus passed, they argued, unemployment would be 7 percent. And yet, here we are in 2011 with an unemployment rate above 9 percent – a full percent higher than what we were told would happen had we done nothing at all. At the time, supporters of the stimulus claimed it would create about 3.5 million jobs, translating to about $229,000 per job. Given that the average salary in Nebraska at the time was about $35,000, it hardly seemed like a sound investment. Meanwhile, many economists were claiming the stimulus would produce far fewer jobs than that lofty projection, and given the unemployment figures cited above, they unfortunately appear to have been correct. Thus the cost of a stimulus-created job is far higher than $229,000. Given these numbers, it is all the more astounding that the Obama Administration last week sent to Congress a budget proposal that spends $3.7 trillion, imposes more than $1 trillion in new taxes, and skyrockets our national debt to a devastating $26.3 trillion by 2021. It would also run an annual budget deficit of $1.65 trillion – a shocking statistic when you consider the budget deficit in 2007 was $160 billion. Perhaps the most disappointing news is the manner in which the Administration presented it to the American people. They claim the budget would actually lower the deficit; however, this claim fails to mention that their budget does not include temporary spending for programs like unemployment insurance and Medicare doctor reimbursement rates. The Administration surely does not intend to simply let these programs expire, which will cost more money and add more to the debt. Furthermore, President Obama largely ignored the recommendations by his own Debt Commission. The commission's chairmen have stated the president's budget "goes nowhere close" to "addressing the nation's fiscal challenges," and "falls far short of comprehensive reform needed to … reduce the deficit." The budget proposal put forth by the Obama Administration demonstrates a continued lack of commitment to addressing our reckless spending. I remain determined to working toward solutions to balance our budget and rein in the debt. We must get our fiscal house in order, or our debt problem today will be our children and grandchildren's debt crisis tomorrow.