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Panel on Year One of the Stimulus Package

Panel on Year One of the Stimulus Package

By Special Report With Bret Baier - February 17, 2010

(BEGIN VIDEO CLIP)

PRESIDENT BARACK OBAMA: There has never been a program at this scale moved at this speed that has been enacted as effectively and as transparently as the Recovery Act. One year later if is largely thanks to the Recovery Act that a second depression is no longer a possibility.

(END VIDEO CLIP)

BAIER: That was the president today. There are critics of this administration who say a depression was avoided because of the Troubled Asset Relief Package, the TARP, one, that was passed under President Bush, and all the things that the Federal Reserve did, not the stimulus package. They also point to a bar graph sent out by the administration in January of 2009. It shows what the administration said would happen with the stimulus package and without the stimulus package, and you see that top line supposedly at nine percent for unemployment without the recovery plan, the stimulus package. Of course, we reached well over 10 percent unemployment and now unemployment stands at 9.6 percent. What about all of this, the stimulus package one year ago today. Let's bring in our panel, Steve Hayes, senior writer for the Weekly Standard, Mort Kondracke, Executive Editor of Roll Call, and syndicated columnist Charles Krauthammer. Charles?

CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: If you look at the graph, you see the upper line is the line of what Obama says we avoided, which he says was the Great Depression.

BAIER: Let's put up the graph again.

KRAUTHAMMER: But if that's the case, then 2009, which was worse than the top line of the graph, as you said, 10 percent unemployment, what does that mean, that we were in a great depression squared last year?

Look, all of this is hyperbole, nonsense, ad hoc numbers. The only hard number in all of this is the amount spent on the stimulus. That's the only real number, which the CBO has told us is now up to $862 billion. It will be $1 trillion with all the interest.

And we know that that is going to have a real effect, meaning it's going to increase our debt payments, interest payments, and interest rates in the future. So that's a fact. Everything else is speculative.

This idea of jobs saved or created - the Bureau of Labor Statistics has hundreds of numbers and statistics. It does not have a statistic dealing with, say, jobs. And the reason is that it can't be measured. It doesn't exist. It's a fiction.

The administration repeats it saved a million jobs, a million and a half or two million. All we know for sure is that the huge expenditures that were given to states to bail out the ones that had overspent or were almost bankrupt did for a year or two of the stimulus keep a lot of bureaucrats and state governments employed.

So, perhaps you could say, well, in the midst of a real recession you wanted to bottom out the trough, but $1 trillion dollars is a high price for a very small and temporary effect.

BAIER: I said the unemployment rate as at 9.6 percent. It's at 9.7 percent. The long term outlook for the year was to hover around 9.5.

Mort, there was a New York Times-CBS poll that said people believed already created jobs by the stimulus, the percentage of people, six percent believed that the stimulus package has already created jobs. That's pretty low when you look at the margin of error. It could be three percent.

MORT KONDRACKE, EXECUTIVE EDITOR, ROLL CALL: Well, the public obviously doesn't believe this thing.

Look, I cannot believe that if you throw $1 trillion dollars at a depression, something like $282 billion has been spent so far, that you haven't saved some jobs. But nobody knows how many jobs you have saved.

But there are a couple of good things about this. First, the education department used half a of $100 billion dollars so far not only to pay teachers to keep teaching kids in school who otherwise might have been laid off because the states couldn't afford to pay them, but also to stimulate some real education reform.

I mean state after state after state has adopted things like raising the cap on charter schools, which is a requirement in order to meet the race to the top ones. That's part of the stimulus package.

Secondly, a lot of money has been used for medical research to - medical research at the NIH budget had been flat for five years because the Bush administration refused to continue the doubling procedure that it had started, and so it needed a bump. So those are good things.

Now, the problem here is that if the Obama administration claims that 2 million jobs have been saved, let's accept that, that number, although we can't prove it. You spend $282 billion - if my math is correct, that's something like $140,000 per job saved, which seems like an awful lot of money.

BAIER: Steve, this is what Vice President Biden said today on a morning show about the stimulus package.

(BEGIN VIDEO CLIP)

VICE PRESIDENT JOE BIDEN : It was designed to have two stages to it. We have only been half way through the act. The job creating portions are really loaded at the second half here and the major projects that are being built. But yes, they have gotten their money's worth.

(END VIDEO CLIP)

BAIER: And here is what Dr. Cristina Romer said in congressional testimony back in October, quote, "Most analysts predict that the fiscal stimulus will have its greatest impact on the growth in second and third quarters of 2009. By mid 2010 fiscal stimulus will likely be contributing little to further growth." Of course, Romer is the head of the Economic Counsel of Advisers to the president.

STEVE HAYES, SENIOR WRITER, THE WEEKLY STANDARD: Contradictions are abundant here. You have not only that, but the White House itself can't agree on Sunday shows on its Web site on exactly how many saved or created jobs. It's a fictional number, as Charles points out, but they can't even get close. You are hearing a variance of a million jobs. It's, I think a troubling thing for the White House that they can't actually be more specific.

But the real question one year in is, did it work? I think the answer is not much in the short-term, and an emphatic no in the long-term.

You have to remember, the White House approached the stimulus with two goals. The short-term goal was to give the jolt to keep unemployment from going over eight percent. It didn't provide much of a jolt at all. It certainly didn't provide unemployment from going over eight percent. So I think you have to say it failed in that regard.

But the second point and I think arguably the more important point is when you heard President Obama talk about the stimulus and what it was going to do, he talked about remaking the American economy, fundamentally changing the way that the American economy works.

He hasn't done that. And not only has he not done that, it involved - that was going the first step of several steps. The second step was going to be health care. Then it was going to be cap and trade.

I think it's clear that the stimulus and the problems associated with the stimulus, the lack of effectiveness, the waste that's been everywhere and been much in evidence, been much remarked about, and the costs, primarily the cost, the size of the stimulus, went directly to the defeat of health care, raised questions about health care.

And you have seen then his domestic agenda crumble as a result.

BAIER: Charles, quickly, the administration and top Democrats on Capitol Hill are not calling it another stimulus, but the jobs bill is shaping up to be much like the first one, isn't it?

KRAUTHAMMER: It's exactly the same idea with a new name. They understand that stimulus is not good PR. People hate stimulus. As you said, six percent believe it worked, seven percent of Americans believe Elvis is alive, so it's, you know, neck and neck in those two beliefs.

They rename it a jobs bill. It's the same idea. And I think there is a lot of skepticism as to whether you can really have a government create a job that is going to be a real job as opposed to just hanging on to a bureaucratic job for a year or two.

 

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