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Archive for the ‘Stimulus Package’ Category

$9 Billion of ‘Stimulus’ Funds Blown on Green Energy Projects

Posted by Steve Markowitz on June 26, 2012

CNSNews.com reported on one boondoggle that came from President Obama’s Stimulus spending program.  According to the article that analyzed statistics from the US Department of Energy’s National Renewable Energy Laboratory, $9 billion of the Stimulus funds were spent on solar and wind projects from 2009 through 2011.

The Stimulus spending program was falsely promoted to the American people as a jobs bill meant to offset the negative effects on the economy of the recession.  In fact, as the green energy spending demonstrates, it was really used as a program to give the President and Democratic Congress the authority to spend money on pet projects.  As a jobs bill the Stimulus program was a failure.

According to the CNSNews.com report, the $9 billion of Stimulus spending on green energy projects created only 910 direct jobs.  In addition, the spending created 4,600 indirect and temporary jobs for building infrastructure and similar items.  Dividing the $9 billion by the 5,510total jobs created results in a cost per job of just over $1.6 million.  Not impressive especially since green energy is not economically viable.

President Obama’s response to the above?  Incredibly he proposes even more spending on similar boondoggles.  Yikes.


Posted in Government Waste, Stimulus Package | Tagged: , , | 1 Comment »

Stimulus Money Given to Tax Cheats

Posted by Steve Markowitz on May 24, 2011

CNNmoney reported on corruption in Washington that would be comical if it wasn’t the peoples’ money being squandered.

According to the General Accountability Office, thousands of contractors who received work and funds under President Obama’s Stimulus Package have not been paying their taxes due Uncle Sam.  Under the American Recovery and Investment Act, nearly 4,000 contractors who received $24 billion in contracts owe $750 million in back taxes.

One example of the grotesqueness of the problem is a firm that received a $100,000 government contract, but owes $6 million in back taxes.  Yet during this period their top three executives received $700,000 in compensation.

None of this should be surprising.  The government has proven incapable of managing the peoples’ money.  In addition, money spent by the government is corruptive as it is often doled out to those with lobbyists and connections to the government spending authority.  But that has not stopped Carl Levin, Democrat Senator from Michigan from being surprised.  Levin incredibly said of the fiasco:

It is a matter of basic fairness that those who take government money should be required to pay their taxes like everyone else.  That such a huge amount of the stimulus money went to known tax cheats should be a wake up call for Congress.”

Senator Levin, the wakeup call came long ago.  It seems you slept through it.

Posted in Government Waste, Stimulus Package, Taxes | Tagged: , , , , , , , | Leave a Comment »

72,000 Dead People Sent Government Stimulus Payments

Posted by Steve Markowitz on October 21, 2010

The Associate Press reported about a week ago that 72,000 dead people received Stimulus checks of $250, according to the Social Security Administration’s Inspector General.  Slightly more than half of these payments were returned.  The other half, …..?

In addition, 17,000 prison inmates received Stimulus checks.  But not to worry, that was a mere $4.3 million, a drop in the bucket by today’s standards.

Stimulus payments to the deceased and the incarcerated were part of the government’s economic recovery enacted in February 2009.  Under that law, the $250 payments were sent to about 52 million Social Security recipients and federal retirees.

This is but another example of the waste that occurs when the government takes money from some and gives it to others.  Just as troubling, no one gets fired for these egregious errors.  Irrespective of the examples of continued mismanagement, Progressives want to give more authority to our failed government.  For those that will lose their seats in Congress next month, look no further for a reason!

Posted in Government Ineptness, Stimulus Package | Tagged: , , , , , | Leave a Comment »

Bridge to Nowhere; An Example of the Stimulus Boondoggle

Posted by Steve Markowitz on August 16, 2010

Here’s a video that is a must for those who believe in more government and more governmental spending.  This is truly a bridge to nowhere.  But don’t worry all you Progressives, the government only blew $150,000 on this boondoggle in New Hampshire.  When they are running trillion dollar deficits, what’s a mere $150,000 of OPM (other peoples’ money)?

Posted in Deficits, Government Waste, Stimulus Package | Tagged: , , , , , | Leave a Comment »

Obama’s Economic Policies; Fiction and Reality

Posted by Steve Markowitz on August 1, 2010

The President is stomping across the country, including appearing on daytime television’s, The View, in full campaign mode.  Obama’s narrative is that his economic policies are working with the following samplings of his claims:

July 2, 2010 – “Make no mistake, we are headed in the right direction.  We are not headed there fast enough for a lot of Americans.  We’re not headed there fast enough for me either.”

July, 8 2010 – “We’ve got a long way to go.  But what is absolutely clear is we’re moving in the right direction.

July 23, 2010 – “I want to talk about the progress we made today on three fronts as we work to repair the damage to our economy from this recession and build a stronger foundation for the future.

While Obama’s talk sounds like great progress on the economic front, reality is quite different.  Here are comments from people who have a real understanding of economics and our economy.

July 21, 2010, Federal Reserve Chairman Ben Bernanke – The economic outlook is “unusually uncertain.”  …  “We remain prepared to take further policy actions as needed to foster a return to full utilization of our nation’s productive potential in a context of price stability.”

July 29, 2010, Federal Reserve’s St. Louis Bank President, James Bullard – Bullard warns that the Fed’s policies were putting the economy at risk of becoming “enmeshed in a Japanese-style deflationary outcome within the next several years.”

July 30, 2010, CNN Money – The U.S. economy slowed in the second quarter, growing by only 2.5%.  “The big surprise to me was in how weak consumer spending turned out to be,” said Nigel Gault, chief U.S. economist at IHS Global Insight.

Additional claims from the President that are directly contradicted include:

2010 – “Every economist who’s looked at it says that the Recovery Act has done its job“.  OK Mr. President, here’s one from the “every” that disagrees:  University of Chicago’s Harald Uhlig has estimated that there is $3.40 of lost output for every dollar of government spending.

2010 – “It is largely thanks to the Recovery Act that a second Depression is no longer a possibility.”  Come on Mr. President, your own Council of Economic Advisers just estimated the stimulus bill’s effect on GDP at its worst was only 1%-2% in jobs.  If correct, that additional unemployment increase would not have made a “second Depression

The economy is faltering because the Stimulus money has been spent and its effect on the economy is running out of steam, as the graph shows.  This was predictable as history has shown that one-time government injections into the economy do not create long-term economic benefits.  However, this elixir of government spending is politically expedient and we should expect the President to request more Stimulus in the near future.

The President promised American that with his $787 billion Stimulus Package the unemployment rate would not exceed 8%.  Not only did it go to 10% after the Stimulus, a year and a half later it remains at 9.5%.  In the real world this is called a failed plan.  In Obama’s world it is claimed a success.

It is unrealistic to expect President Obama to admit that his economic policies have failed, especially given the proximity of the upcoming November elections.  The American people first need to speak at the elections and then maybe we can begin to undo the damage done to our economy by all of the governmental interventions.  That assumes that the Republicans will be ready to lead, an optimistic assumption.

Let’s close with some sage words from economist Friedrich August von Hayek in his Nobel Prize Speech in 1974: “… this economic condition has been brought about by policies which the majority of economists recommended and even urged governments to pursue.  We have indeed at the moment little cause for pride: as a profession we have made a mess of things.” ….

Posted in economics, economy, President Obama, Stimulus Package | Tagged: , , , , , , , , , , , , , , , , | Leave a Comment »

Tax Reform – The Real Stimulus

Posted by Steve Markowitz on April 16, 2010

Today we have a guest-posting from Jim Mahoney that is a really good read.  Jim, a CPA, offers an alternative to the failed Obama Stimulus Plan.  While we cannot turn back the clock, about half of the Stimulus remains unspent.  Jim’s approach for that $500 billion would better serve the country and our economy.  But don’t expect logic from the Progressives in Washington whose motto seems to be: “If a governmental program fails, double-down on the bet.”

Tax Reform – The Real Stimulus, by Jim Mahoney

Ever since the “Financial Meltdown” occurred in October of 2008, there has been a concerted government effort to frighten the American people about the urgency of passing the Stimulus Bill in order to head off economic collapse.  Early in the spring of 2009, when the unemployment rate was 7%, Obama ominously told the American public that if Congress did not pass the stimulus bill immediately the economy was in danger of imminent collapse and the unemployment rate could go as high as 9%.  Well, the Bill passed and the national unemployment rate is now hovering at 10% and climbing.  If you factor in discouraged workers who are either underemployed or have given up looking for work entirely, that figure rises to over17%.  The economy remains in the doldrums and the Administration keeps telling us that the Stimulus is working, even as they move to extend jobless benefits for a total of 99 weeks.  As of now, about half of the $1 trillion allocated to the Stimulus has been spent, with very little of it being used for its original stated purpose.  Any funds that have been repaid by the financial industry have been illegally reallocated into a political slush fund, instead of being returned to the Treasury, and billions of dollars of Stimulus funds have simply vanished.  By any measure the Stimulus has been a complete failure.  You can expect the Administration to tap into the remaining $500 billion to sprinkle additional funding around in 2010 to provide a short lived economic sugar rush just in time for the mid term elections.

Now suppose that when the “crisis” was first identified, instead of shuffling money like a Three Card Monte through a maze of federal agencies headed by faceless unaccountable Czars and bureaucrats, the federal government had responded by cutting the individual income tax rates in half.  According to IRS data, the revenues received by the federal government from personal income taxes in 2008 totaled a little over $1 trillion.  By the way, this was a record level of tax revenue that was the direct result of the George Bush tax cuts for the “wealthy”, but that’s a topic for another article.

Since we’ve all just recently filed our income tax returns, let’s bring this discussion closer to home.  Take out your 2009 Tax Return and look at your total federal income tax liability.  This is Line 46 on Form 1040 (Line 28 on Form 1040-A).  More Americans need to focus on this number.  Because of employer income tax withholding and quarterly estimated payments, many Americans are oblivious as to how much they actually pay in income taxes.  Pay no attention to the relatively lower amount of any taxes due with your return or to the amount you “got back” as a refund.  Look at your total gross income tax liability before any payments or credits.  It’s a pretty eye opening amount, isn’t it?

Now imagine you had half of this amount available as cash in your pocket to use in whatever way you pleased.  You might invest it, use it to pay down debt, make additional donations to your favorite charities, start your own business, or buy the kind of new car you actually wanted, instead of some politically correct, government approved, roller skate in a Cash for Clunkers program.  In fact, how you decide to use it is irrelevant since it is your own money after all.  You would patronize businesses, restaurants and other services of your choice and inject capital into the system in the process.  These companies in turn would hire more employees to handle the increased business.  The employees hired would then begin paying taxes themselves instead of being idle workers living on unemployment benefits.  Well-run companies that provide good customer service would be rewarded and poorly run companies would go out of business.  This is how capitalism works when it is freed from government interference.  This would create a true economic stimulus because the money would have been voluntarily spent and invested by you in your local community, not confiscated by a government that seeks to create winners and losers based upon their political ideology and campaign contributions.

Now multiply this effect with taxpayers all across the country.  Giving taxpayers more of their money means that the funds would have been distributed to local communities throughout the county quickly and efficiently with no opportunity for fraud.  Cutting the personal tax rate in half would have instantly injected $500 billion into the economy without the need to establish a single federal agency, focus group, or suffer through a presidential speech.  Tax cuts have worked every time they have been tried.  Why is the government so fearful of letting the productive segment of society have control over our own money?

Posted in economy, Governmental Intervention, Stimulus Package, Stimulus Program, Taxes | Tagged: , , , , , , , , , , , , , , | 1 Comment »

The Stimulus Package: Numbers, Figurers and Liars

Posted by Steve Markowitz on November 1, 2009

Yesterday this Blog reviewed the GDP third quarter figure that showed 3.5% growth, the largest increase in nearly two years.  While on the surface a great report, the next day the stock market had its largest one-day drop of the year, 250 points.  Why the dichotomy?  Other numbers released by the Obama Administration do not add up.

The Obama Administration released its report on job creation from the Stimulus Package.  As expected, the report had a positive spin.  Talking points from Administration included “Stimulus creates 640,000 jobs.”  Who could be against 640,000 jobs being created!  However, the underlying numbers just don’t jive with the unemployment rate approaching 10%.

liarOkay, now let’s dig deeper into the numbers.  First, the Administration used slight-of-hand by not merely announcing the number of actual jobs created, but also jobs that were supposedly saved.  The intent here is apparent.  According to Carnegie Mellon economics professor Allan Meltzer: “One can search economic textbooks forever without finding a concept called ‘jobs saved,'” and,  “It doesn’t exist for good reason: how can anyone know that his or her job has been saved?”  Had the Stimulus really created significant jobs, this sleight-of-hand by the Administration would not have been required. Read the rest of this entry »

Posted in Governmental Intervention, Stimulus Package | Tagged: , , , , , , , , , , , , , , , , , , , , | Leave a Comment »

US Deficits – Punishing Our Children

Posted by Steve Markowitz on September 28, 2009

rendell030708Recently, Pennsylvania Governor Ed Rendell was questioned about the benefits of the $787 billion federal government Stimulus Package to the economy.  The interviewer questioned the success of the Stimulus Package given the continued economic weakness and high unemployment.  Governor Rendell’s answer was emphatic.  He stated that layoffs to State workers were avoided with a few thousand Pennsylvania jobs saved by the $2 billion Stimulus money received by our State.

Let’s assume for the time being that Governor Rendell was correct as to the Stimulus’s benefits to Pennsylvania.  His response, however, completely avoided an important part of the equation; who will pay for these benefits?  With trillion dollar deficits, this generation is no longer paying for the ever increasing governmental programs it has come up with.  Instead, the money will have to be paid back by the next generations, our children and their children.  While PA (and other states) may have saved jobs today, we have done so by mortgaging our children’s’ wealth. Read the rest of this entry »

Posted in Deficits, Stimulus Package | Tagged: , , , , , , | 1 Comment »