An Ohio State research team has released a study illustrating that the American Recovery and Reinvestment Act (ARRA) was the abject failure we knew it would be before it was ever implemented. Keynesian economics don’t work, have never worked, and are actually a negative. Let’s not forget the additional debt the American taxpayer has been saddled with to pay for this monstrosity of social engineering on top of the jobs lost.
estimate the Act created/saved 450 thousand government-sector jobs and destroyed/forestalled
one million private sector jobs. State and local government jobs were saved because ARRA funds
were largely used to o
set state revenue shortfalls and Medicaid increases (Fig. A) rather than
boost private sector employment (e.g. Fig. B).
Here is the direct link to the study.
It’s important to remember that even this type of ‘investment’ spending as Obama refers to it, is designed to be temporary as a boost where demand is lagging or credit is restricted. When conditions improve, the stimulus should be withdrawn. Instead, what we are witnessing is that this additional deficit spending is now a permanent part of the federal budget. Yet the states won’t receive the billions in handouts they did previously to temporarily salvage their own budgets.
Additionally, the stimulus cost needs to be extracted from the recovering economy and acts as a further anchor stunting any perceived recovery. It’s a vicious cycle with no hope of a positive outcome. None of this is any surprise to those of us who never bought into the sales pitch despite being denigrated at the time for not even giving the stimulus a chance. It’s not a new concept. It’s a tried and true proven failure. Hopefully, the American voter will pay closer attention next time at the ballot box.