Stimuli

Sorry guys... The Stimulus worked

On February 17^th 2009, Congress Passed and the President signed the American Recovery and Reinvestment Act, better known as the Stimulus Act.  The stimulus had the immediate goal of stopping or at least slowing the momentum of the worst economic decline since the Great Depression, and turning the direction of economy as a whole around. 

Well let’s look at what it did.  Before the recession U.S. GDP, total employment, and private sector layoffs looked great.  In late 2007 all three of these economic indexes began to falter then plummet throughout 2008.  Obama had a tremendously difficult job from day one.  He inherited the worst economic collapse we’ve seen in our life times.  In January 2009, the first month of his presidency, the country lost more jobs than any other month in the last sixty years.  At the end of 2008 GDP was falling at landslide proportions, and private sector layoffs spiked higher each consecutive month. 

During the first quarter of the Stimulus Act GDP still declined, but at a much slower rate.  GDP begins to successfully turn around and grow again by the 3^rd quarter of 2009.  Other than GDP rising, after the stimulus, job losses also slow down immediately and in early 2010 we began actually adding jobs to the economy for the first time in two years.  As for private sector layoffs, they peaked in February 2009, the month the Stimulus Act passed, then declined dramatically and with in one year layoffs are down to pre-recession levels.  The data all tells the same story. America and the world were teetering on complete collapse; the stimulus prevented further devastation and helped to forge a recovery.  The only valid complaints that can made about the stimulus is that it wasn’t allowed to go far enough because of partisan bickering, and moronic rants about government spending.

If spending were an issue of the Right when Reagan, Bush, and his daddy were in office the deficit situation wouldn’t be as dire as it is.  Partisan politics aside the only way out of recession of this scope is government intervention and spending.  Lowering taxes spending slashing spending will never spur economic growth.  You will be hard pressed to find an economist that will tell you otherwise.  In fact, of the many lessons we can learn from the European financial crisis is that austerity only leads to further economic demise.  So how about we stop complaining about stimulus spending, a necessary evil in times of recession, and start actually implementing policy that brings America to a full recovery. 


We have done little to fix the system (Wall Street) that crashed.  We have however given Wall Street four of the most profitable years it has ever experienced as the rest of America lay wrecked.  Lack of market regulation was the major contributing factor to both the Great Depression and the Great Recession.  This needs to be addressed, and controls need to be placed on an unbridled banking system that does more to control the government than government does to control it.  The Dodd-Frank Act was intentionally delayed, and then watered down to the point of having no real impact.  Regulation doesn’t prevent a free market, it ensures it.  Regulation enforces fairness and accountability.  An unfair market is not a free market.  Without a free market there is no capitalism.

Social and educational programs aren’t only a win win for the entire country.  But the lack of morality involved in insisting we not restore the tax rates of the 1990’s in place of firing teachers, police, and firefighters is disgusting.  This is made even more shameful when you factor in the harsh economic times these civil employees are enduring.  If we were to hire back all the state employees such as teachers, police officers, and firefighters that have been laid off in the last 4 years we would have an expected unemployment rate below 7% and the economy would be well on its way to a full rebound.