The Administration is quick to point out again today that it inherited this recession.
Which is what most every president has said over the last two decades, and despite the fact that the president and vice president were sitting Senators in the US Congress when the housing and credit bubbles were ballooning (the vice president has been in government since the Nixon Administration).
It's questionable whether you can blame the economic mess on the White House.
But has the White House delivered on its stimulus promises of lowering the unemployment rate and creating 3.5 million jobs by the end of this year, much less its promises of cutting the deficit, already growing at record levels not seen in the eight years of the Reagan or George W. Bush Administrations?
Did stimulus save the economy, as the White House contends? Or was it the Treasury and the Federal Reserve pumping massive amounts of liquidity, trillions of dollars worth, into the US banking system that stopped another Great Depression?
Recovery.org, which tracks stimulus money that has actually gone towards actual contracts to hire workers, estimates just 500,000 jobs have been created so far at a $43 billion cost in stimulus spending. Not 2 million jobs created or "saved," as the White House contends.
It's a point of contention now whether stimulus "saved" 1.5 million other workers, and how many of those jobs are in the public sector, as that data gathering has been discredited by the Government Accountability Office. The Office of Management and Budget has backed off supporting it after the GAO found widespread flaws, as has Recovery.gov, the White House office overseeing stimulus spending (see below).
With the expert help of Fox News analyst James Farrell, we found out the following. Did you know that since the Administration's stimulus was enacted:
Unemployment Has Risen
* The unemployment rate has increased since the stimulus bill was enacted, by +1.5% to 9.7%, from 8.2% in Feb 2009.
* The number of people who are unemployed increased by 2.1 million, from 12.71 million in February 2009 to 14.8 million in January 2010.
* The number of states/federal districts with an unemployment rate of 10% or higher increased from Feb 7, 2009 to December 17, 2009 (latest data).
* Payroll employment decreased by 3.3 million (132.823 million in Feb 09; 129.527 million in Jan 2010). Private payrolls are at levels not seen since 1999.
* The construction sector lost 810,000 jobs (6,435,000 in Feb 2009/5,625,000 in Jan 2010).
* The manufacturing sector lost 837,000 jobs (12,377,000 in Feb 2009/11,540,000 in Jan 2010).
* Employment in the federal government (excluding the Post Office) increased by 113,200 (2.068 million in Feb 09 / 2.181 million in Jan 2010). The number of federal, state and local employees is now about twice the number in US manufacturing jobs.
* Most jobs supported by the stimulus so far are public employees.
Stimulus Costs Have Risen
* The CBO raised its estimated cost of the bill from $787 billion to $862 billion - a $75 billion increase, due to more spending on things like unemployment benefits and food stamps.
Stimulus Money Yet to Be Spent
According to the Wall Street Journal and USAToday:
* About 1/3 of the stimulus has been paid out so far.
* Only about 11% of stimulus infrastructure spending has been paid out.
* About 58% of stimulus spending so far has gone to government and social services.
* Nearly $130 billion went towards tax cuts, Medicaid assistance for the states, unemployment and food stamps.
* $112 billion of 2009 stimulus spending went to balance state budgets.
* Administering the stimulus cost $700 million in 2009
* More than $3.5 billion in economic stimulus funds are going to programs that President Obama wants to eliminate or trim in his new budget.
* A dozen Republicans requested stimulus funding for their districts, the Wall Street Journalreports, showing the fiscal hawks have flown the coop and adult supervision in DC is eroding.
Administration Backs Away from Jobs "Saved"
* The Administration has quietly backed down from its assertion that the stimulus "created or saved" 640,000 jobs, due to unreliable or fraudulent data.
"There is a range of significant reporting and quality issues that need to be addressed" in these statistics, said a November 2009 report from the Government Accountability Office.
*Earl Devaney, chairman of the Administration's Recovery Board which oversees this data, testified before Congress that the 640,000 jobs saved or created "may not be the correct number."
Devaney has also informed the Oversight and Government Reform Committee that his department will now report jobs funded rather than created or saved on the White House's official site counting jobs attributed to the stimulus.
* The November 2009 GAO audit found widespread discrepancies in the reports that the government collected from local officials. These officials were charged with reporting back to the government on how the stimulus program “created or saved” jobs in their areas.
Widespread massaging of the data was found. For example, state and local officials counted planned raises to staffers towards the jobs saved data.
For instance, if a workforce was, say, going to get a 10% raise in salary, officials would take the total number of workers and multiply it by 10% to come up with a new jobs saved number.
The GAO found other discrepancies:
- 3,978 reports showed that numerous districts received no stimulus dollars, but somehow officials reported more than 50,000 jobs created or saved
- 9,247 reports showed no full time jobs were created, but somehow did show they received $965 million in stimulus money. For example, 935 jobs at Southwest Georgia Community Action Council were reportedly saved due to the stimulus--but only 508 people work there.
- According to Illinois state officials, some of their local education authorities “had double-counted the number of positions, attributing the positions to both state fiscal year 2009 (which ended on June 30, 2009) and fiscal year 2010 (beginning July 1, 2009), in part because the reporting period covered both of the state's fiscal years,” the GAO found.
- Despite the requirement that “jobs created or retained" were to be expressed as full-time employees, “data were reported inconsistently” by recipients, "with varying and often inconsistent application of what was a full-time employee," the GAO said.
Due to the problems with the reporting of jobs “created or saved,” the GAO recommended that the OMB make its calculation methodology less subjective, “more explicit” and ensure that recipients report on only full-time equivalent jobs.
A December 18, 2009 memo to stimulus money recipients from the director of the OMB noted that they were scrapping the “saved or created” reporting due to the GAO concerns about the problems with this subjective figure:
“…recipients will no longer be required to make a subjective judgment on whether jobs were created or retained as a result of the Recovery Act. Instead, recipients will more easily and objectively report on jobs funded with Recovery Act dollars. This update aligns with GAO's recommendation to ‘[make] more explicit that ‘jobs created or retained' are to be reported as hours worked and paid for with Recovery Act funds.'”
Federal Government Assistance Rose
* Since stimulus was enacted, monthly federal government expenditures on Medicaid have increased by 29% (from $17 billion in Jan 09 to $22 billion in Jan 2010).
*The number of people receiving benefits under the Supplemental Nutrition Assistance Program (food stamps) increased by 5.672 million - a 17.3% increase (32.556 million in Feb 09; 38.183 million in 11/09).
*The amount federal government spends for benefits under the Supplemental Nutrition Assistance Program (food stamps) each month increased by $1.404 billion - a 37.91% increase ($3.703 billion in Feb 09; $5.107 billion in 11/09).
US Debt Has Increased
* US public debt outstanding increased by $1.562 trillion - a 14.47% increase ($10.790 trillion on 2/17/09; $12.352 trillion on 2/12/10).
* Since the recession began, China increased the amount of US debtit owned by $11.2 billion ($744.2 billion in 2/09; $755.4 billion in 12/09), but lately it has been decreasing its Treasury purchases to instead spend money on its own economic problems.
* Foreign governments have increased their ownership of US debt by $453 billion - a 14% increase ($3.161 trillion in 2/09; $3.614 trillion in 12/09).
* Foreclosure filings have increased +9%, with five million homes headed for foreclosure.
Banks Still Failing