Second Stimulus Package Approved

Updated March 19, 2010

Background
According to WRAL, the original second stimulus package allocated another $174 billion in taxpayer funds. However, opponent Congressman Jerry Lewis (ranking Republican on Appropriations – not the telethon host), estimated its cost at a mere $150 billion.

The bill is not being called a "stimulus" package, however.  Since the first stimulus bill has received so much criticism (and has gone over budget by more than $100 billion), this second proposal is being called a "jobs" bill.

Funny ... we thought that's what the first bill was for.

In any event, the US House approved the new package 217-212 on December 16 and the proposal moved to the Senate, where it passed on February 25, 2010, albeit in a much less costly form. For this one, taxpayers were only on the hook for $35 billion - a figure which rose to $38 billion by the time Obama stepped into the Rose Garden to sign the compromise legislation into law in March.

Promises, Promises
In January 2009, Obama issued an economic study predicting a stimulus jobs bonanza, stating that the first stimulus plan would “likely save or create three to four million jobs. Ninety percent of these jobs will be created in the private sector. The remaining 10 percent are mainly public sector jobs we save, like the teachers, police officers, firefighters, and others who provide vital services in our communities.”

It was an aggressive prediction, and in fact, it hasn’t happened. A visual look at the actual results tells a much different story.

According to the Administration's official Recovery website, the stimulus has created or saved 1,239,000 jobs from its inception through December 2009, mostly in government. Obama himself says that figure is closer to 2,000,000+, leaving one to wonder why that isn't reflected on his own administration's website.

In any event, based on investigations of Recovery.gov's claims by the media, at least 94,000 of the claimed jobs don’t even exist.

For example, ten jobs were claimed for a Fort Bragg project that hasn’t even received any money yet.

Government Unions
The real purpose of stimulus has been brilliantly explained by Almanac of American Politics author Michael Barone. It’s a payoff. Barone says that “It looks like a happy new year for you — if you're a public employee . . .”

Private-sector employment peaked at 115.8 million in December 2007, when the recession officially began. It was down to 108.5 million last November. That's a 6-percent decline.

Public-sector employment peaked at 22.6 million in August 2008. It fell a bit in 2009, but then rebounded back to 22.5 million in November. That's less than a 1-percent decline.

This is not an accident; it is the result of deliberate public policy. About one-third of the $787 billion stimulus package passed in February 2009 was directed at state and local governments, which have been facing declining revenues – and most are required to balance their budgets.

Though most taxpayers thought that the first stimulus package was all about job creation and infrastructure, the true policy aim, according to proponents, was to maintain public services and aid. The political aim, however, was to maintain public-sector jobs — including the flow of union dues to the public employees’ unions that represent almost 40-percent of public-sector workers.

Those unions in turn have contributed generously to Democrats. Services Employee International Union (SEIU) head Andy Stern, the most frequent nongovernment visitor to the Obama White House, has boasted that his union steered $60 million to Democrats in the 2008 election cycle (the total union contribution to Democrats has been estimated at $400 million).

So in effect, some significant portion of the stimulus package can be regarded as taxpayer funding of the Democratic Party. (Wall Street Journal 12/31/09)

Stimulus 2
All of this brings us to the $38 billion injection into the same old stimulus programs. Under the new bill, employers would be exempted from paying Social Security payroll taxes for newly hired workers who have been unemployed for at least 60 days. It also provides a $1,000 tax credit for any worker who is retained for at least a year. Businesses would be able to expense new equipment purchases, rather than having to depreciate that cost over time.

Speaker Pelosi puts an interesting spin on the bill in order to make taxpayers believe that it’s not money out of their pockets. She claims that the second stimulus will be paid for with unneeded Wall Street bailout money – as if that wasn’t from taxpayers in the first place.  But will it stimulate employers in the private sector to hire new workers?

That's unlikely.  Employers will take the tax credit, but it won't cause them to hire more workers.  Employers only hire workers when the need is there and they can afford to hire.  A one-year handout that's worth roughly $3-$4k isn't going to change that dynamic and cause them to hire workers they don't need and can't afford.

Two Americas
A recent Rasmussen survey found 46-percent of government employees think the economy is getting better while 31-percent say it’s worse. But among the private sector, 49-percent of workers believe the economy’s getting worse and only 32-percent see an improvement.

That’s logical because, as former Senator Edwards said, there are two Americas. Government America is protected from the economy. The rest of us aren’t. Government America is happy and the rest of us keep getting screwed by our big, fat, dumb, happy government.

God help us when the Chinese quit buying the debt.