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Darin McGregor, Pool / AP Photo A year ago this week, Obama signed the biggest single spending bill in U.S. history. What followed has dismayed his fans and stretched our political fabric to the breaking point.
When President Obama appears in Denver this week to mark the first anniversary of his $787 billion stimulus, he will no doubt vigorously defend the biggest single spending bill in American history. As he signed the legislation, he said it would create or save 3.5 million jobs over two years. He also promised the largest new investment in our national infrastructure since President Eisenhower’s Interstate highway program; the largest investment in education in the nation’s history; a complete overhaul and modernization of our health care system; an unprecedented increase in spending on basic research; major steps towards energy independence; and substantial increases in aid to states and local government. He went on to say that in addition to what was in the stimulus program, he would stem foreclosures, reform the financial system, and restore fiscal soundness. One year on, where are we economically and politically?
In retrospect, the attempt to deal simultaneously with so many major reforms may have been a fatal mistake.
The president’s biggest accomplishment has been to avert a financial meltdown and deep depression. Politicians rarely get credit for something that didn’t happen, but in this case the president and his team deserve the highest praise. While no one should underestimate the impact of the gigantic stimulus, however, the rescue of the American economy was also due to other programs. After all, the administration could draw on the $700 billion TARP program to bail out failing financial institutions, and the Federal Reserve provided unprecedented help by lowering interest rates to zero and by buying up more than $1 trillion of mortgage-backed securities and other troubled assets.
The administration says it has saved or generated 1.6 million jobs—a claim not easy to verify, given fuzzy definitions. But whatever the precise number is, the challenge of unemployment became much greater than almost anyone imagined. Over 8 million jobs have been lost during the recession. Unemployment reached 10% of the population, some 14 million people. Last week the administration projected an average unemployment rate of 10% this year, barely declining to 8.2 % in 2012.
Economic growth has improved, but it’s hard to say whether it is artificial growth held up by government funds that will eventually peter out, or whether we have a sustainable expansion, propelled by the private sector.
As for state budgets, their collective deficits in fiscal 2010 will be $125 billion, while next year it is estimated to be $140 billion.
On other fronts, federal help to hard-pressed homeowners has been pitifully slow, and foreclosures have not abated, having reached 88,000 last month alone. Health-care reform is hanging by a thread, financial reform is stuck in Congress, and the cap-and-trade centerpiece of climate and energy legislation that Mr. Obama championed is dead.
The bottom line: after one year, the economic record is mixed. On the other hand, the political outlook may be more significant.
It is understandable that a president who campaigned on fundamental change and found himself in a deep financial and economic crisis on taking office would feel compelled to emulate President Franklin Delano Roosevelt by creating a blizzard of initiatives not just to get people back to work but to revamp the very foundations of the economy. But Mr. Obama inadvertently created a specter of runaway government with legislation that was hastily passed, contained thousands of pages of fine print, and involved highly visible backroom dealing. At the same time, he did not produce enough jobs, or help enough families stay in their homes, or hold enough banks responsible for the tragedies they unleashed. In retrospect, the attempt to deal simultaneously with so many major reforms may have been a fatal mistake.
As a result, the president aroused deep suspicion—even more, deep cynicism—in too many Americans about the ability of government to function, even aside from the question of its size. Moreover, he has caused the public to focus not just on the horrendous budget deficits of today—the largest relative to the GDP since just after World War II—but the gigantic debts that are projected well into the future, on current policies reaching almost 80% of GDP, and putting the country in dangerously unchartered territory.
View as Single Page 12 Back to Top February 16, 2010 | 10:37am Facebook | Twitter | Digg | Share | Emails | print var OutbrainPermaLink=document.location.href.replace(document.location.search, '').replace(/\/\d+\/$/,'/').replace(document.location.host, 'thedailybeast.com'); var OB_Template = "The Daily Beast"; var OB_demoMode = false; var OBITm = "1255455386150"; var OB_langJS ='http://widgets.outbrain.com/lang_en.js'; if ( typeof(OB_Script)!='undefined' ) OutbrainStart(); else { var OB_Script = true; var str = ''; document.write(str); } $787 Billion Stimulus, President Obama, Economics, Politics, Cap And Trade, Medicaid, President Eisenhower, Medicare, Tarp, Gdp, Franklin Delano Roosevelt, Bailout (–) Show Replies Collapse Replies Sort Up Sort Down sort by date: AlanD2
The single biggest problem with the stimulus bill was that it wasn't big enough. The high unemployment that we now see results in large part from insufficient government stimulus spending. As for Obama's failure to pass other legislation that would have helped average Americans during this recession, the party of "No" bears most of the responsibility.
Flag It | Permalink | Reply | (–) Show Replies Collapse Replies 11:41 am, Feb 16, 2010 AngryJHAHAHHA...wooo...that was a good one. You really had me going there...
Flag It | Permalink | Reply 11:51 am, Feb 16, 2010 Baddchildoh AlanR2D2, you are so drunk on the kool-aid you have no idea which way is up. There has never been a spending bill in the history of the United States that came close to wasting the money this bill has. It's not that we didn't waste enough money, it's that the money was wasted period. America would have been better off if they just cut the bill in half and gave the money directly to US Citizens to spend. The money would have gotten back into the economy and it would have created taxable income for 0bama to blow on so-called green jobs instead of just stealing it from Americans. But the idea wasn't to save the economy - it was to control all aspects of Americans everyday life. Not to create jobs but to control what jobs are to be created and they couldn't even create those - Evan BAyh admitted thet this congress hasn't created a job in 6 months. As for the party of NO - congress didn't need one GOP vote to pass any bill yet they are so inept that they couldn't pass anything, by far the worse congress in the history of America. Why couldn't they pass anything? Because the policy of the Dems is so out of touch with mainstream America that people in their own party couldn't even support it. You dumb ass libs call the GOP dumb, stupid, etc. yet they are supposedly so smart that they can stop the messiah's agenda in its tracks... which is it? Make up your minds or are they only intelligent when you need someone to blame for the liberal failings? I've always encouraged you to try and make an arguement AlanR2D2 isntead of just calling people trolls who prove you wrong all the time but maybe you should just go back to calling names atleast this way we won't set our expectations of you so high. kind of like our expectations of 0bama and the dems.
Flag It | Permalink | Reply 1:09 pm, Feb 16, 2010 AngryJHappy B-day Spendulous. This has been a great year for you and your special interest groups. I cannot wait to see what other miracles you have in store for the USA as time progresses. I hear you little brother (or sister) is on the way. Perhaps, we really can spend our way out of debt. I know anytime I run up a huge debt more money magically comes flowing in. "Highest praise," to your Daddy Obama, and Mommy the Democratically controlled Congress.
Flag It | Permalink | Reply 11:46 am, Feb 16, 2010 TaterSaladHere is Redistribution of Wealth to the highest degree: http://sweetness-light.com/archive/uk-taxpayers-provide-mansions-for-poo r
Flag It | Permalink | Reply 12:05 pm, Feb 16, 2010 Wulfe51Haveta say, I'm pretty disappointed in the proceedings of the last year. I'd welcome a change of leadership in at least one house of congress, if only to send Harry Reid or, preferably, Nancy Pelosis, back to the rank and file. That said, I'm not gonna vote for Sarah Palin or Mitt (Empty Suit) Romney, and neither is anyone else.
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