An analysis just released by Associated Press has found that federal economic stimulus spending on such things as roads and bridges has done little to nothing to alleviate unemployment at the local level. Whether we look at construction or transportation, the money spent by the federal government has had no significant effect on local unemployment.

President Barack Obama has said he wants another stimulus package this year — intended also to generate spending on local roads and bridges. Such projects are, in the president’s words, “at the heart of our effort to accelerate job growth.” One wonders why a new economic stimulus bill would succeed while its predecessor failed.

Emory University economist Thomas Smith observed, “As a policy tool for creating jobs, this doesn’t seem to have much bite.”

Worsening unemployment continues to thwart economists’ efforts to convince a reluctant public that the worst recession since the 1930s ended in last year’s third quarter. Numbers indicate upticks in consumer spending in such areas as housing and new automobiles, as well as the steady rise in the Dow, but according to the federal government’s own payroll survey, the U.S. economy shed 85,000 jobs in December.

This is the figure being reported in the mainstream media. A separate report, a household survey incorporating the effects of faulty seasonal adjustments, yields a considerably higher number of job losses: 589,000!

The “official” unemployment rate stands at 10 percent (down slightly from 10.2 percent at the end of November). According to broader measures of unemployment which include discouraged workers who have given up looking for a job for as long as a year, as well as part-time workers seeking full-time work, counted as employed for the government’s statistical purposes, unemployment in America is considerably worse. John Williams, of Shadow Government Statistics, estimates that if all workers who have relinquished the search for work are accommodated (who were included before the Clinton Administration changed the definition of unemployment), the real unemployment rate stands at around 21.9 percent!

Last year’s economic stimulus package was the largest in U.S. history. Eventually, the money will run out. President Obama knows this, but sees the solution to the government’s battle with raging unemployment as still more stimulus money — which will require either an enormous tax increase on those still working or keeping the money-printing engine going full steam ahead. Given the unpopularity of tax increases, the government has taken the latter route despite its long term effects, diminishing the value of the dollar. Yet clearly the present course — pretending that government spending can create and sustain a jobs base — hasn’t worked. Several authors, Einstein among them, defined insanity as doing the same thing over and over again and expecting a different result. If that is the case, then the present administration — and the Keynesian economists it employs — all fit the Einsteinian definition of insanity to a tee.

Steven Yates earned his Ph.D. in philosophy in 1987. He is the author of one book, Civil Wrongs: What Went Wrong With Affirmative Action (San Francisco: ICS Press, 1994) and numerous articles both in academic journals and elsewhere. He has taught philosophy at Clemson University, Auburn University, Wofford College, the University of South Carolina, Southern Wesleyan University--Columbia, and Midlands Technical College, and has held fellowships with or worked on projects with the Institute for Humane Studies, the Heritage Foundation, the Heartland Institute, and the Acton Institute for Religion and Liberty.

 

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rprew said:

	Roads and bridges Joe Arpaio can build roads and bridges much more economically than the PRO & Associates Construction Company! About the only thing another stimulus can alleviate is "excess" weight in your wallet and the wallets of your children, grand-children, and great-grand-children. (PRO: Pelosi-Reid-Obama)
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January 11, 2010
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DDW said:

	As always rprew, you are right on target.
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January 11, 2010
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January 15, 2010 | url
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