Democrats insist their nearly trillion dollar stimulus package was successful in preventing the nation from sliding into another Great Depression. While that is overstating the matter a bit, I would agree the economy required a much needed boost that only the federal government could provide, especially considering the Dow hit rock bottom at 6,547 in March 2009.
Something big was needed, if for no other reason than to convince investors that the world wasn’t going to end with Obama’s election – investors are, after all, a forward looking group and I highly doubt many believed Obama would be good for business.
What could have been a beneficial investment in our nation’s future, turned bad when Democrats in Washington chose for themselves who would get the money. Not surprisingly, instead of businesses and investors receiving tax breaks to spur private sector job creation, the majority of stimulus funds were directed to state and local governments, politically connected unions and pork projects that only a politician could love.
Because of the Democrat’s poor choices, the $787 billion in borrowed Chinese money hasn’t ended our economic misery, but merely postponed it.
Did Joe Biden Reveal a Secret White House Plan to Socialize America?
We are already seeing the consequences of the Democrats reckless spending in the elevated unemployment rate. What was unimaginable not so long ago, economists now predict unemployment in the 10% range for years to come, if not permanently. Vice President Joe Biden’s comment that he did not expect the 5 million jobs lost during the recession to return is particularly illuminating. To believe the $14.3 trillion U.S. economy would be unable to create a measly 5 mil jobs seems ludicrous at first glance.
There is only one reason for anyone to expect unemployment to remain permanently elevated, namely the socialization of America along the lines of Europe, where 10% unemployment is the norm. I can think of no other explanation. It is as though Biden’s admission regarding the lost jobs means Obama’s secret plan to socialize America isn’t so secret in the White House.
Obama “Saved” the Wrong 3 Million Jobs
The bad economic news starts with the so-called “3 million saved or created jobs” that Obama often mentions. In some respects, he is correct… millions of jobs were saved, but unfortunately for us, they were the wrong jobs. What Obama is referring to is the millions of overpaid public sector employees that get to keep their position at the public trough, while the rest of us in private industry don’t seem to matter.
Over the past couple of years while the private sector has been cutting jobs to survive, the federal government, flush with stimulus cash, has added 300,000 to the payroll. The same can be said of state and local governments. Rather than face up to economic reality by making budget cuts, many have used federal stimulus funds to keep their bloated workforce in place while some have even hired on additional personnel.
Approximately 8 million private sector jobs have been lost in the recession, not to mention the millions who have experienced lost income and work hours. Considering that 20% of the American workforce is in the public sector, just to maintain economic balance there should have been around 1.25 – 1.75 million government jobs lost during the recession. It is these workers that account for much of Obama’s highly touted “saved or created” jobs statistic.
And we’re not talking about $10 per hour work here either. Government employees make on average 70% more than their private sector counterparts with benefit packages that are off the charts. While the rest of us have to wait until we’re 65 or older to collect Social Security, public sector employees often retire at 55 or younger.
Not only are their pay scales astronomical in comparison, it appears that many public sector employees have been giving themselves hefty pay raises since the recession began. The number of federal civil servants making six figures has climbed from 14% to 19% of the workforce since 2007. That’s 750,000 federal employees making $100,000 or more. An extreme example can be found in the Transportation Department where in 2007 only one employee made $170,000… now 1,690 make that much.
How Can the Wealthiest Nation in the History of the World Be Going Broke?
The U.S. is the wealthiest nation in the history of the world and yet we’re going broke because of our obscenely overpaid government workforce. Unfortunately for them, the stimulus party can’t last forever and we are starting to see signs of things to come.
The police union in East St. Louis was given the option to accept a one year, 20% pay cut that would allow the city to keep most of the officers on staff. Rather than working with the city to decrease costs, as many private sector employees have done over the past couple of years to save their jobs, the union refused compromise giving the city no choice but to lay off almost half the police department leaving the streets in one of the most dangerous neighborhoods in the country unprotected.
The original purpose of the stimulus funds was to create jobs, or more accurately, private sector employment. However, rather than invest in job creators, businesses, investors, entrepreneurs, etc… the Democrats decision to hand over the stimulus money to the public sector has merely postponed the inevitable federal, state and local government budget cuts that by a couple of years.
Basically the economy is at exactly the same place as when this whole mess started, with trillions more added to our national debt no less.
What Would Ronald Reagan Do?
Just imagine where unemployment would be now if Republicans had doled out the stimulus funds in accordance with Ronald Reagan’s proven trickle down economics model. If Congress had implemented tax cuts for businesses and lowered tax rates for the wealthiest Americans, we would be well on our way to economic recovery. While this might not sound like a great idea to class warfare proponents, I doubt we would be looking down the barrel at a 9.5% unemployment rate.
You can see the difference in the effects between the TARP fund created under the Bush administration and the stimulus monstrosity put forward by Obama. While TARP may not be popular, even in some conservative circles, most of the money was given to job creating banks that know how to create and maintain wealth. In other words, TARP wasn’t a handout; it was an investment in successful American businesses that has since been repaid to the government with interest.
Obama stimulus was the exact opposite. Rather than investing a trillion dollars in job creating businesses and individuals, it was a handout to state and local governments that wasted the money on keeping their bloated payrolls intact when they should have been ridding themselves of many thousands of overpaid and unnecessary employees.
A Better Way Forward
I agree with Sen. McCain that politicians should be banned from earmark spending, but I would take his idea it a step further. I am convinced that government agencies should never spend money on businesses outside of their immediate suppliers. For example, rather than handing out $130 million to a car battery company in Michigan like Obama did last month, if the government feels it necessary to give back money to the public, then it should be done with across the board tax cuts. Any other way and we’re just begging for politicians to engage in financial mismanagement.
While I don’t have all the answers, I do have 5 suggestions on how to get our nation moving in the right economic direction:
- Get rid of all government jobs created since 2006; an additional 5% cut in the workforce from there couldn’t hurt.
- Return government pay scales and benefits back to what they were in 2006.
- Return government spending back to what it was in 2006, before the Democrat controlled Congress increased federal spending by over 30% in 3 years.
- Raise the retirement age of all government workers to 65.
- Use the proceeds from steps 1, 2, 3 and 4 in tax breaks for private businesses.
And then let’s see if we can’t get America back to work.
