President Obama and the Democratic leadership, as well as many of the Washington chattering class, seem to agree: Failure to throw even more money at the economy will prove disastrous for Democrats in November.
Politico quotes Howard Gleckman of the Urban Institute as saying, “The question is, can [Democrats] create the perception that they have done all these things to create jobs, or that they tried but the dastardly Republicans prevented them from creating jobs?”
Rather than blaming Republicans, Democrats ought to thank them. Had Republicans been able to stop the Democrats’ uber-spending spree even earlier, the economy might have come back quicker and unemployment might be trending down.
According to the government’s website that tracks stimulus spending, Recovery.gov, the government has spent $417 billion in tax benefits, contracts, grants, loans and entitlements. Mind you, that’s just the stimulus money. Others estimate that the administration has added about $1 trillion in debt in the past 18 months.
And yet unemployment has actually gone up since Obama made this his economy, from 13 million to 15 million Americans, for a net loss of 2 million jobs. So, just counting stimulus money, we’ve spent about $208,000 per job lost.
Maybe that’s why a new Rasmussen poll says that only 25 percent of voters nationwide believe the stimulus package created jobs. And 43 percent say it hurt the economy.
Now, seeing inverse relationships is always tricky in economics. But if Democrats have spent so much money with only increasing unemployment to show for it, why not try the opposite approach: Stop spending money and see what happens.
Or go one step further: If government spending can be positively correlated with lost jobs, maybe cutting spending would result in more jobs.
Since it doesn’t look like Democrats can get more stimulus spending passed, why not flip and embrace the alternative? They can still blame Republicans for stopping more stimulus spending—a criticism I suspect most Republicans would be happy to accept. And if cutting spending begins perking up the economy, the president and his party could truthfully, and finally, claim his policies worked.