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McConnell: "Americans Have 1.7 Mil. Reasons To Oppose Another Stimulus"; WSJ, ABC Examine Failures Of The Original Stimulus‏ | Missouri Political News Service

McConnell: “Americans Have 1.7 Mil. Reasons To Oppose Another Stimulus”; WSJ, ABC Examine Failures Of The Original Stimulus‏

September 8th, 2011 by mopns · No Comments

In an op-ed for Politico today previewing the president’s speech, Senate Republican Leader Mitch McConnell writes, “President Barack Obama will reportedly do two things in his speech to a joint session of Congress tonight: ask us to believe that a second stimulus will be more effective than his first; and pin the blame on others for a jobs crisis that his own economic policies have done more than anything else to perpetuate. Such a speech would, no doubt, cheer the most ardent Democratic partisans. But it would do nothing to create jobs. That’s why many of us believe the president should instead begin by candidly acknowledging the failures of an economic agenda that centers on massive government spending and debt.”

ABC News examines the stimulus’ infrastructure spending, reporting today, “President Obama isn’t likely to use the term ‘shovel-ready’ in his jobs speech tonight, but he is expected to call for billions in new government spending for infrastructure projects he believes will lead to immediate hiring. . . . If the refrain sounds familiar, it’s because it is. Sources knowledgeable about the administration proposals say Obama might seek to fast-track up to $50 billion in infrastructure spending in the next year as part of a broader transportation package, an idea he first proposed a year ago but which failed to gain traction. . . . A January 2010 Associated Press analysis of Recovery Act found spending on roads and bridges ‘had no effect on local unemployment and only barely helped the beleaguered construction industry,’ regardless of how many dollars lawmakers threw at the various projects.”

And The Wall Street Journal explains the overall failure of the stimulus in an editorial: “Even zero jobs growth in August doesn’t seem to have disrupted President Obama’s faith in the economic policies of his first three years, so one theme we’ll be listening for in tonight’s speech is how he explains the current moment. Why did his first jobs plan—the $825 billion stimulus—so quickly result in the need for another jobs plan? For readers who want to know, an important account is offered in a pair of new Mercatus Center working papers by the George Mason economists Garett Jones and Daniel Rothschild, who did field research on what they call the supply side of the stimulus. . . . In the first paper, the authors survey 85 different businesses, nonprofits and local governments across the country and conclude that ‘As is often the case when economic models are transferred from the blackboard to actual public policy, there was a gap between theory and practice.’ . . . The second paper suggests that the stimulus did not ‘create or save’ nearly as many jobs as the models indicate. On the basis of 1,300 interviews, Messrs. Jones and Rothschild estimate that merely 42.1% of the firms that received grants hired people who were unemployed. Instead, they poached workers from their competitors.”

The WSJ editorial concludes, “The lesson of such on-the-ground knowledge is that the stimulus was a lost opportunity. In practice it became a shotgun marriage between an economic theory justified by computer models and 40 years of liberal social priorities (clean energy, Medicaid expansions and the rest). This produced the 9.1% unemployment we now have. The economy would have benefitted far more if the government had instead improved the incentives for people and businesses to invest, produce and grow. The President probably won’t mention any of this, but it does explain why he has to give his latest speech.”

As Leader McConnell wrote, “Here’s the bottom line: There are now 1.7 million fewer jobs in America, according to the Bureau of Labor Statistics, than there were before the president signed the economic stimulus into law. By the president’s own standards, in other words, the centerpiece of his jobs agenda has been a failure. At this point, most Americans have concluded that the problem with our economy isn’t that Washington is doing too little — but that it’s doing too much.”

He elaborated in a speech on the Senate floor this morning, “I’d say that Americans have 1.7 million reasons to oppose another Stimulus. And that’s why many of us have been calling on the President to propose something different tonight. Not because of politics. But because the kind of policies he’s proposed have failed.  The problem here isn’t politics. The problem is policy. . . . So tonight, the President should take a different approach. He should acknowledge the failures of an economic agenda that centers on government spending and debt, and work across the aisle on a plan that puts people and businesses at the forefront of job creation.”



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