After Three Years of Stimulus Failure, Dems Want Five More

February 17, 2012

Democrats Calling for More of the Failed Stimulus Ventures in Crony Capitalism that Have Left Americans with a Struggling Economy and Mountains of Debt

Today is the third anniversary of Democrats’ failed stimulus, but Democrats are the only ones celebrating. Americans are suffering the painful consequences of Democrats’ broken promises, with sky-high unemployment and a suffering economy.
Instead of learning from their failure, Democrats are now doubling down on more stimulus and more taxpayer funding for the disastrous ventures in crony capitalism that the first one funded.
Democrats are pushing for this additional stimulus money even as the national debt continues to climb, posing a growing threat to America’s economic prosperity.

Today is the third anniversary of Democrats’ failed stimulus, but Democrats are the only ones celebrating. Americans are suffering the painful consequences of Democrats’ broken promises, with sky-high unemployment and a suffering economy:

OBAMA SIGNED STIMULUS INTO LAW ON FEBRUARY 17, 2009: (Mimi Hall and David Jackson, “Stimulus Slammed as Dem Agenda,” USA Today, 2/17/2009)

12.8 MILLION UNEMPLOYED AMERICANS: (Table A-1, Bureau of Labor Statistics, 2/3/2012)

NEW CBO REPORT: “8%-PLUS UNEMPLOYMENT INTO 2014”: (David Jackson, “CBO Projects 8%-Plus Unemployment into 2014,” USA Today, 2/16/2012)

“LONGEST PERIOD OF HIGH UNEMPLOYMENT SINCE GREAT DEPRESSION”:(Alex Parker, “CBO: Longest Period of High Unemployment Since Great Depression,” U.S. News and World Report, 2/16/2012)

CBO: REAL UNEMPLOYMENT RATE IS 10%: “The rate of participation in the labor force fell from 66 percent in 2007 to an average of 64 percent in the second half of 2011, an unusually large decline over so short a time. … Had that portion of the decline in the labor force participation rate since 2007 that is attributable to neither the aging of the baby boomers nor the downturn in the business cycle (on the basis of the experience in previous downturns) not occurred, the unemployment rate in the fourth quarter of 2011 would have been about 1¼ percentage points higher than the actual rate of 8.7 percent.” (“The Budget and Economic Outlook: Fiscal Years 2012 to 2022,” Congressional Budget Office, January 2012)

WHITE HOUSE PREDICTED UNEMPLOYMENT WOULD BE ABOUT 6 PERCENT AT END OF 2011 IF $800 BILLION STIMULUS PASSED: (James Pethokoukis, “What the Plunging Unemployment Rate Really Means for Obama’s Re-election,” The American, 1/6/2012)

MORE THAN 3 MILLION “MISSING WORKERS” WHO HAVE DROPPED OUT OF LABOR FORCE: “There are currently over 3 million ‘missing’ workers who should be participating in the labor force but are not actively seeking work.” (“Jobs Preview 2012: The Year of the Missing Worker,” HPS Insight, January 2012)

15.1 PERCENT UNDEREMPLOYMENT: (Bureau of Labor Statistics, 2/3/2012)

13 PERCENT DECREASE IN AVERAGE HOME VALUES SINCE FEB. 2009: (“Real Estate Market Reports: Zillow Home Value Index,” Zillow, Accessed 2/15/2012)

NEARLY 7 MILLION MORE AMERICANS LIVING IN POVERTY: (p. 5, “Poverty: 2008 and 2009,” U.S. Census Bureau, September 2010; Table 1, “Poverty: 2009 and 2010,” U.S. Census Bureau, October 2011)

Instead of learning from their failure, Democrats are now doubling down on more stimulus and more taxpayer funding for the disastrous ventures in crony capitalism that the first one funded:

OBAMA INSISTED HE WOULD “DOUBLE DOWN” ON GIVING TAXPAYER MONEY TO COMPANIES LIKE SOLYNDRA: “We’ve got to double down on the clean energy that’s creating jobs.” (“Remarks by the President on the Budget,” The White House, 2/13/2012)

AFTER HE USED STATE OF THE UNION TO EMBRACE HIS RECORD OF FAILURE ON “GREEN” PROGRAMS LIKE SOLYNDRA: “Some technologies don’t pan out; some companies fail. But I will not walk away from the promise of clean energy.… It’s time to end the taxpayer giveaways to an industry that rarely has been more profitable and double down on a clean energy industry that never has been more promising. Pass clean-energy tax credits.” (“Transcript: Obama Delivers State of the Union Speech,” CNN, 1/24/2012)

REUTERS: “OBAMA UNVEILS BIG SPENDING ELECTION-YEAR BUDGET”: (Alister Bull and Laura MacInnis, “Obama Unveils Big Spending Election-Year Budget,” Reuters, 2/13/2012)

AP: NEW BUDGET “LADEN WITH STIMULUS-STYLE INITIATIVES”: “The president’s plan is laden with stimulus-style initiatives: sharp increases for highway construction and school modernization, and a new tax credit for businesses that add jobs.” (Andrew Taylor, “Obama Budget: New Spending with Recycled Tax Ideas,” Associated Press, 2/11/2012)

A RECORD OF CRONY CAPITALISM:

OBAMA’S “GREEN” PROGRAM “INFUSED WITH POLITICS AT EVERY LEVEL”:“Meant to create jobs and cut reliance on foreign oil, Obama’s green-technology program was infused with politics at every level, The Washington Post found in an analysis of thousands of memos, company records and internal e-mails. Political considerations were raised repeatedly by company investors, Energy Department bureaucrats and White House officials.

“The records, some previously unreported, show that when warned that financial disaster might lie ahead, the administration remained steadfast in its support for Solyndra.” (Joe Stephens and Carol D. Leonnig, “Solyndra: Politics Infused Obama Energy Programs,” The Washington Post, 12/25/2011)

CRONY CAPITALISM? WASHINGTON POST AUDIT FINDS $3.9 BILLION IN TAXPAYER MONEY WENT TO “21 COMPANIES WITH CONNECTIONS TO FIVE OBAMA ADMINISTRATION STAFFERS AND ADVISERS”: “During the next three years, the department provided $2.4 billion in public funding to clean-energy companies in which Wagle’s former firm, Vantage Point Venture Partners, had invested, a Washington Post analysis found. Overall, the Post found that $3.9 billion in federal grants and financing flowed to 21 companies backed by firms with connections to five Obama administration staffers and advisers.” (Carol Leonnig and Joe Stephens, “Venture Capitalists Play Key Role in Obama’s Energy Department,”The Washington Post, 2/14/2012)

“SEVERAL PLAYERS IN VENTURE CAPITAL” WHO BACKED OBAMA MOVED INTO OBAMA ENERGY DEPARTMENT IN 2009: “He was one of several players in venture capital, which was providing financial backing to start-up clean-tech companies, who moved into the Energy Department at a time when the agency was seeking outside expertise in the field.” (Carol Leonnig and Joe Stephens, “Venture Capitalists Play Key Role in Obama’s Energy Department,” The Washington Post, 2/14/2012)

A CONFLICT OF INTEREST? “INDUSTRY HAD A HUGE STAKE” IN WHICH FIRMS RECEIVED GOV’T SUPPORT: “At the same time, their industry had a huge stake in decisions about which companies would receive government loans, grants and support.” (Carol Leonnig and Joe Stephens, “Venture Capitalists Play Key Role in Obama’s Energy Department,” The Washington Post, 2/14/2012)

E-MAILS SHOW ADVISERS WITH CONNECTIONS TO VENTURE FIRMS “INFORMALLY ADVOCATED” FOR COMPANIES THAT RECEIVED LOANS: “White House officials stress that staffers and advisers with venture capital ties did not make funding decisions related to these companies. But e-mails released in a congressional probe of Obama’s clean-tech program show that staff and advisers with links to venture firms informally advocated for some of those companies.”(Carol Leonnig and Joe Stephens, “Venture Capitalists Play Key Role in Obama’s Energy Department,” The Washington Post, 2/14/2012)

BUNDLING FOR INFLUENCE? “VENTURE CAPITALISTS WHO HELD ADVISORY ROLES” WITH DOE “WERE GIVEN ACCESS TO OBAMA’S TOP ADVISERS”:“Thousands of agency and White House e-mails released as part of the Solyndra investigation show that venture capitalists who held advisory roles with the Energy Department were given access to Obama’s top advisers.” (Carol Leonnig and Joe Stephens, “Venture Capitalists Play Key Role in Obama’s Energy Department,” The Washington Post, 2/14/2012)

Democrats are pushing for this additional stimulus money even as the national debt continues to climb, posing a growing threat to America’s economic prosperity:

OBAMA CALLING FOR $350 BILLION IN NEW STIMULUS: “In his final budget request before facing voters in November, Obama called for $350 billion in new stimulus to maintain lower payroll taxes, bolster domestic manufacturing, lure jobs back from overseas, hire teachers, retrain workers and fix the nation’s crumbling infrastructure.” (Lori Montgomery, “Obama Offers Stimulus, But Cuts in State, too,” The Washington Post, 2/15/2012)

A $4.7 TRILLION INCREASE IN NATIONAL DEBT SINCE OBAMA TOOK OFFICE:(“The Daily History of the Debt Results,” TreasuryDirect.Gov, Accessed 2/13/2012)

OBAMA RECORD “THE MOST RAPID INCREASE IN THE DEBT UNDER ANY U.S. PRESIDENT”: (Mark Knoller, “National debt has increased $4 trillion under Obama,” CBS News’Political Hotsheet Blog, 8/22/2011)

NATIONAL DEBT STANDS AT $15.39 TRILLION, LARGER THAN THE NATION’S $15.29 TRILLION ECONOMY: (“The Daily History of the Debt Results,” TreasuryDirect.Gov, Accessed 2/16/2012; “National Economic Accounts,” Bureau of Economic Analysis, Accessed 2/12/2012)

DEMOCRATS’ RECORD OF TRILLION-DOLLAR DEFICITS: “The Congressional Budget Office on Tuesday predicted the budget deficit will rise to $1.08 trillion in 2012. … The deficit was $1.4 trillion in 2009, $1.3 trillion in 2010 and $1.3 trillion in 2011. The largest deficit recorded before that was $458 billion in 2008.” (Erik Wasson, “CBO Projects $1.08T Deficit, Higher Unemployment,” The Hill, 1/31/2012)

DEBT DRAGS DOWN ECONOMIC GROWTH:

“ECONOMIC DAMAGE BEGINS TO RISE” WHEN PUBLIC DEBT HITS 90% OF GDP:“Economists believe that when debt to GDP reaches 90% or so, the economic damage begins to rise. And this doesn’t include the debt that future taxpayers owe current and future retirees through the IOUs in the Social Security ‘trust fund.’” (Editorial, “The Amazing Obama Budget,” The Wall Street Journal, 2/14/2012)

STUDY SHOWS DEFICTS PUT A DRAG ON OUR ECONOMY: “The eventual effect of sustained fiscal imbalance is slower growth and greater risk of a fiscal crisis. Our estimates suggest that a 10-point increase in the debt/GDP ratio lowers growth four years later by 0.2 percentage point, and increases the probability of a debt crisis by 2.5% in the aftermath of a financial crisis like the recent one. (See No Rush for the Exit,” Global Economics Paper, No. 200, June 30, 2010 and “When One Crisis Leads to Another,” US Economics Analyst, 11/04, Jan. 28, 2011.) To avoid this, lawmakers must begin to identify deficit reduction strategies.

“Ultimately, what goes up must come down. In the case of the federal budget, this means that a deficit-financed boost to growth will eventually lead to a drag. While policymakers can try to smooth the transition by phasing in cuts and incorporating multi-year fiscal commitments, achieving a sustainable fiscal policy will inevitably be a painful but necessary process.” (Jan Hatzius and Alec Phillips, “Fiscal Restraint: A Question of When, Not If,” Goldman Sachs Global ECS U.S. Research, 3/2/2011)

MAJOR ECONOMIC STUDY LINKED GOVERNMENT DEBT TO SLOWER ECONOMIC GROWTH: “The sharp run-up in public sector debt will likely prove one of the most enduring legacies of the 2007-2009 financial crises in the United States and elsewhere… Our main finding is that across both advanced countries and emerging markets, high debt/GDP levels (90 percent and above) are associated with notably lower growth outcomes… Seldom do countries simply ‘grow’ their way out of deep debt.” (Carmen M. Reinhart and Kenneth S. Rogoff, “Growth in a Time of Debt,” American Economic Review Papers and Proceedings, 12/31/2009)