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This morning, President Obama held a press conference to outline his second multibillion dollar stimulus proposal. Unlike the administration's $787 billion "stimulus" bill which has fallen short of its goal to "save or create" millions of jobs, this proposal aims to really "save or create" jobs. And, as is to be expected from the Obama White House, the plan to solve the problem that $787 billion in spending could not fix is to throw even more taxpayer money at it.
[The President stated that] the nation must continue to "spend our way out of this recession" until more Americans are back at work.
Without giving a price tag, Obama proposed a package of new spending for highway, bridge and other infrastructure projects, deeper tax breaks for small businesses and tax incentives to encourage people to make their homes more energy efficient.
But, cost-benefit analysis of spending from the first stimulus reveals the flaws associated with government spending.
The Obama Administration is touting that their stimulus program has saved or created 640,329 jobs since it was enacted back in February through the end of October... That amounts to $246,436 per job based on the $157.8 billion that has been awarded so far! Total compensation earned by the average payroll employee during October, on an annualized basis, was $59,867. If the government had simply used the funds awarded so far to pay for a year’s worth of labor, that would have paid for 2.6 million jobs!
This means that the government spends $186,569 more per stimulus funded job than the average worker earns annually. When considering such staggering figures, one can only assume that spending billions more on job creation will lead to more waste and inefficiency. It will not lead to more jobs.
Worse still, the Administration plans to pay for its new stimulus with taxpayer money originally intended to go to the failed banks who received TARP funds. Mr. Obama stated:
This gives us a chance to pay down the deficit faster than we thought possible and to shift funds that would have gone to help the banks on Wall Street to help create jobs on Main Street.
Such a statement reveals the president's intentions to take TARP funds-- which were meant to be one-time emergency funds aimed at freeing up credit markets-- and to turn them into a "$700 billion revolving slush fund" to be spent on whatever project the White House's deems necessary.
But maybe if the president and his allies in Congress hadn't forced through a $787 billion spending bill without reading it and had instead focused on real reforms aimed at helping small businesses, lowering taxes and inciting job creation, there would be no need to even discuss a second stimulus bill. Maybe if they had spent the past year focused on the job creation and not on a trillion dollar healthcare nightmare and a job-killing cap and trade bill, unemployment wouldn't be in double digits.
Since they haven't, Mr. Obama's only solution is to "spend our way out" of trouble.