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May 12, 2009

Forecast Unemployment Rates (Romer), with and without ARRA stimulus package The forty-fourth President of the United States, Barack Obama, is not a very smart man when it comes to money.

The latest evidence of that assertion comes to us from Geoff at Innocent Bystanders (HT: Ed Morrissey), who updated a chart produced by the Obama administration projecting what his top economic advisors believed would be the trajectory the U.S. unemployment rate would take through 2014, both with and without the increased spending provided by the so-called stimulus "recovery plan" (see the chart above).

We would have to say that at this time, it would seem the stimulus plan's system of directing large amounts of federal tax dollars to the biggest campaign contributors of the majority party of Congress and the Obama administration, rather than toward productive Americans, doesn't appear to be working very well. One might conclude that the wasteful spending is producing results little different than pouring the money down the drain.

Money Down the Drain That worse performance is being reflected in the federal government's tax collections, which are now projected to produce a larger deficit, some 5% higher than what the Obama administration had forecast in February 2009, when the stimulus package was being rushed through Congress.

The increase in the projected level of the federal government deficit this year is significant since tax collections, rather than "jobs created or saved" would be a truer measure of whether the increased spending of the stimulus recovery plan is successfully generating greater economic growth than would otherwise occur for Americans. "Jobs created or saved," as Greg Mankiw observes, is not an objective measurement.

By contrast, if the spending stimulus really worked, it would produce more tax collections through increased economic growth than would have been generated otherwise, offsetting a portion of the increased spending and producing smaller deficits.

But we're afraid that the current President of the United States is just not a very smart man when it comes to money.

Update: HEH. Via "the boss" (see here for managerial reference....)

Some Highlights from Barack Obama's History of Wastefulness

This isn't the first post where we've recognized that exceptionally poor judgment characterizes Barack Obama's relationship with money. Here are some highlights from our ongoing review of the President's sad history in fiscal matters:

Post Date Money Wasted Comment
How Much Was Obama's House Really Worth When He Bought It 30 October 2008 $ 222,170 Absorbing the latest information on the historic assessments of the property values in then-Senator Barack Obama's neighborhood, we updated our previous analysis to reveal that Barack Obama spent nearly a quarter of a million dollars more than the independent market appraisals indicated to be the value of his home in Chicago at the time he bought it. That the inflated price forced him to turn to shady characters to assist his purchase further suggests exceptionally poor judgment.
Where the Stimulus Money Is Going 8 February 2009 $ 365,629,525,000 We graphically presented where all the money for the then-proposed "stimulus package" would be going by government department. The number one category? "Appropriations" (aka "earmarks, aka "pork"), which accounted for roughly 47% of the final $787 billion cost of the package that no-one in Congress nor the White House could be bothered to read in its entirety before passing into law.
How to Know if the "Stimulus" Worked 10 February 2009 See "Stimulus Money" It became pretty clear that President Barack Obama really doesn't understand money all that well when he began pushing the "number of jobs created or saved" as being the measure by which he would determine if the stimulus package was a success. We helped our fiscally-illiterate President here by pointing out that if the stimulus package really worked, it would increase the federal government's tax collections more than expected and built a tool to see how much it would take to be considered to be successful.
Pouring Taxpayer Money Down the Drain 11 May 2009 $ 421,370,475,000 The amount of the waste we're counting here is the rest of the $787 billion of the stimulus package, which after the latest employment figures, suggests that even Barack Obama's number of "jobs created or saved" aren't going to be anywhere near the levels that his administration had used to rush the stimulus bill into law without review.

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