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Written by Wayne Pugh
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Wednesday, 08 July 2009 00:00 |
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When the administration’s top economic advisors, Christina Romer and Jared Bernstein, released their projections in early January, they estimated that the unemployment rate would reach 9 percent in 2010 unless massive amounts of government funding were allocated to stem the loss of jobs. If the $787 billion economic stimulus was approved, they said, the unemployment rate would likely peak just shy of 8 percent in the middle of 2009.
Now, half-way through the year, the unemployment rate has reached 9.5 percent – and President Obama says it will likely rise above 10 percent. 
Source: Bureau of Labor Statistics and “The Job Impact of the American Recovery and Investment Plan”
Click to Enlarge.
Originally we were told that fast-acting treatment was needed to bandage the economy and “create or save” 3.5 million jobs. What we received was a slow-acting, time-release injection of money. Only 6 percent of the stimulus has been spent so far, and only 23 percent is slated to be spent before 2010. According to the Congressional Budget Office, the bulk of the spending (nearly $400 billion) will actually occur next year, with 91 percent of the spending having taken place by 2012. The July 2 release from the Bureau of Labor Statistics shows a decline in the rate of job loss from last quarter. Though payroll employment has fallen 6.5 million since December 2007, the rate of job loss has declined from an average of 691,000 per month in the first quarter of 2009 to 436,000 per month in the second quarter. If this trend continues, the bulk of the stimulus money could hit in the midst of the recovery – generating another artificial boom.
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He told employees of CAT "Think about all the work out there to be done, and Caterpillar will be selling the equipment that does the work"
CAT CEO Jim Owens said that "We literally (went from) a three-year order backlog coming into November to now having order cancellations to the point where we cannot run at capacity"
Obama thought he was going to save some CAT jobs that by his stimulus (which passed) and there has not been any magical results, just more wasteful, non-audited spending.
If that tax money had been in the hands of the consumers, our country wouldn't been as bad as it is now.
Wayne, great job on explaining the facts instead of shooting out opinions.
Dick Murdock
"This will put pressure on the Administration to do another "stimulus", and perhaps they will actually put something on the table that is not so wasteful and partisan? Lets hope so!"
Rich, keep dreaming!
Vince
Many of the unemployment figures are extrapolated from a monthly survey of 60,000 households. Details regarding what does and does not contribute to the reported statistics can be found on the BLS website. They also release interesting reports on a regular basis.
http://www.bls.gov/cps/cps_htgm.htm
http://www.bls.gov/news.release/empsit.nr0.htm
I hope to hear more from you in the future.
To paraphrase Ronald Reagan, "A recession is when your neighbor loses his job; a depression is when you lose your job; a recovery is when Obama loses his job." On the bright side, it looks like people are finally starting to wake up (see link below)
www.rasmussenreports.com/
But as for the proper timing of stimulus, I personally feel that no one person or any group of people could ever possess enough information to make that decision correctly and will always get it wrong. But we can't do that because that would be doing nothing! Shocking! The american people wont stand for our elected leaders doing nothing! I for one would prefer it.
The "stimulus" and Ominbus Spending Bill seemed to deal more with paying off people that supported them through the election and in supporting the progressive/liberal agenda than it ever did in actually trying to help get at the root causes of our problems. This will put pressure on the Administration to do another "stimulus", and perhaps they will actually put something on the table that is not so wasteful and partisan? Lets hope so!