Obama Stimulus Is Succeeding In Spite of Republican Claims and Obstruction

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A note on the economy. The Obama stimulus programs, including cash for clunkers are working.

It must seem as if there is no end to our haranguing the Republicans. But the truth demands it. The fact is that the Republicans are lacking in any sense of responsibility to the American People. Once again, instead of trying to create a debate over essential elements of economic growth, they have decided to whine and then take their ball, bat and glove and go home, complaining all the way. That doesn’t help. The country needs strong independent private industrial leadership to create jobs and move the country forward. The Republicans complain that the country is moving to the left, becoming more like the European countries. I wonder why that might be?

First of all, the average American worker made no gains at all in the last 20 years, except during the Clinton Administration. So workers are naturally skeptical of a Republican Party, of their think-tank supporters like the Heritage Foundation, Cato Insitute, Hudson Insititute, FreedomWorks, Club for Growth, and on and on. They have so much money that they can afford to launch new anti-American-people organizations almost on a weekly basis. They have been against a living wage, affordable health insurance for poor children, veterans’ benefits and VA improvements, health care reform, the stimulus and extensions in unemployment during this massive recession. They seem to be for cutbacks in government spending, when they are NOT in control. They set records for spending, for convictions for corruption in contracting and for creating the greatest national debt ever–even greater than Reagan. So, who are these people? Why do we listen to them? They want to teach non-science in schools, take us back to the stone age. Ridiculous. They are like the South before the Civil War, totally irrational. The South wanted slaves. They want indentured workers…which their corporations often find…in pitiful regions in Asia. They seem, like their predecessors to want to start another Civil War, calling a rational President like Obama a Nazi just as the South called a rational man like Abraham Lincoln a monkey. These are really nutty people, these current-day Neocon Republicans.

So once again they show an irresponsibiliity and a disregard for the facts…to the detriment of the country. The stimulus bill has worked, even though every single Republican voted against it and would not offer an alternative. Even though Republicans spend about half their time–when not trying to prevent Americans from having affordable health care–denouncing the stimulus plan, it is working. We have a long, long way to go. This is not a typical Republican generated recession.

Bush and Cheney…who can say whether it was deliberate…tried to shut down this country. They came within a hair’s breadth of doing so. Ben Bernanke and Hank Paulson, whatever else they have done, did the country a huge favor by plugging the huge hole in the dike that would have put this country underwater for at least ten years and perhaps changed our lifestyles forever. If you think ten percent unemployment is bad, try twenty percent! It could have been the end of our free enterprise system. It could have been anarchy.

Fox News, the propaganda arm of the Republican Party, CNBC, the Wall Street Journal both in print and on the air, and other Right Wing pundits and corrupt lobbyist-paid Republican Congressmen keep up the non-stop drumbeat that the stimulus has not worked…but they offer no economic evidence to back it up. Of course most of them are not established academicians in economics–many clearly do not even understand economics. They are often merely talking heads with no qualifications at all other than reading a teleprompter. Rush Limbaugh was barely hanging on as a p.r. man for a baseball team. Since he discovered the “white-trash” audience, there are people in the country that listen to his program merely to go on the air and correct the lies with which he litters the landscape every day. Perhaps now that 33 advertisers have walked away from Glen Beck, someone will put that idea into the heads of those who advertise on Rush Limbaugh.

So what is the evidence that the stimulus has worked so far? Well, first, even though no one should be enthusiastic about the economy based solely on the stock market, it has risen by 50% since the lows, which were at the end of last year, under Bush.

Has the government financial system, under Geithner and Summers and Bernanke done well? Let’s take just one example. The government’s loans to Wall Street firrms are already being paid back, and while the number continues to grow each day, two in particular are important. The first is Goldman Sachs. Goldman Sachs, at the core of the financial crisis, the former Treasury Secretary Paulson’s former company, repaid $11 billion plus interest, which with all factors involved came to something like 23% ROI for the government. The other was Citibank which repaid its funds, and the government’s preferred stock in Citibank is already worth $11 billion.

A review of some of the other bailed-out banks, although by no means all of them, shows a preliminary total repaid of over $20 billion. So in the first half of 2009, in the midst of the worst recession in over 70 years, about ten percent of the loaned money, even though it was loaned in crisis mode, has been repaid.

The stock market has rebounded from under 7,000 points to over 9,500 points. While the stock market is hardly a reliable measure of the economy, it most certainly is a key factor in the estimates of those who watch the economy on a daily basis. Whether it is justified or not, it is one of the factors that the financial “common wisdom” would consider in determining whether the economy is climbing.

What about the speed with which stimulus funds are being paid out? Well remember that a significant amount of money was going out the door to the states even in the first week after the stimulus was approved. This less recognizable amount has relieved the states from laying of fire and police, nurse and doctors in public hospitals, teachers and other indispensable civil servants. Even with this money, states are still in difficult, some even in disastrous, circumstances. About 35% or $80 billion of the $204 billion funds available for distribution to contractors for various projects has been allocated. About $3 billion went out in a two-week period in the “cash-for-clunkers” program that saw American automakers sell over 500,000 cars. Similar programs are under study for other items, perhaps major appliances.

While the news about the economy has been and will continue to be grim for some time, it is clear that the entire collapse of the economy was the result of wild spending policies, lax regulatory activity, outright corruption and deceptive reporting. All those things are gone. The 2009 projection is that the government will have a short fall of $1.58 billion. This is a recently revised figure, smaller by $262 billion than had been anticipated. This is just one example of beginning to understand how much information was kept from the American people in various legal but deceptive reporting techniques. Only when we know exactly the numbers for our revenues and expenses can we make intelligent decisions moving forward.