Less than a month after taking the oath of office, President Barack Obama stood on a windy construction site in Northern Virginia and promised that his landmark $787 billion economic recovery stimulus program would “create or save almost 100,000 jobs in Virginia, doing work at sites just like this one. Where we’re standing, that could mean hundreds of construction jobs.” Thanks in great part to the surge of employment his program would create, especially in the road and construction industries, Obama said, unemployment would not exceed 7.8 percent nationally, and up to 3.6 million jobs would be “created or saved.”
Today, nearly a year later, unemployment stands at 10 percent. The actual total is closer to 17 percent when you include people who gave up after months of fruitlessly searching for work. The Obama stimulus program has become the butt of jokes on late-night talk shows, thanks to revelations by The Examiner and others of the phantom nature of more than 100,000 of the 640,000 positions claimed by Obama to have been created or saved, as well as revelations about jobs saved or created in congressional districts and ZIP codes that don’t exist.
Now, along comes the Associated Press with a detailed study of whether the Obama stimulus program had any measurable effect on the construction industry. The AP study was reviewed by economists at five universities. Here’s what the AP found:
“Ten months into President Barack Obama’s first economic stimulus plan, a surge in spending on roads and bridges has had no effect on local unemployment and only barely helped the beleaguered construction industry, an Associated Press analysis has found. Spend a lot or spend nothing at all, it didn’t matter, the AP analysis showed: Local unemployment rates rose and fell regardless of how much stimulus money Washington poured out for transportation, raising questions about Obama’s argument that more road money would address an ‘urgent need to accelerate job growth.’”
Despite the evidence that federal stimulus spending does not do what its advocates promise, Obama and his Democratic allies who control Congress are determined to take another whack at the taxpayers by passing a second stimulus program, the $75 billion Jobs for Main Street Act that will spend most of its funds on — what else? — construction projects. The House approved the proposal in December on a narrow 217-212 vote, and the Senate is expected to take it up later this month.
The basic reason government stimulus spending doesn’t work is this: For the government to spend $75 billion in one part of the economy, it must first take $75 billion out of the economy somewhere else. There is another name for this process: robbing Peter to pay Paul.