When Did the Public Sector Get Bailed Out?

I was just reading an article about a speech Mitt Romney gave in Iowa a few weeks ago.  The speech is supposedly the epitome of how Romney intends to tie the economy around President Obama's neck.  That's all fine and dandy, trust me.  The state of the economy is fair game, no questions asked.  But here's a snippet of what Romney told the attendees:

"America counted on President Obama to rescue the economy, tame the deficit and help create jobs. Instead, he bailed out the public-sector, gave billions of dollars to the companies of his friends, and added almost as much debt as all the prior presidents combined."

Bailed out the public sector?  What does that even mean?  The public sector has shrunk.  In fact the only thing growing is the private sector.  Besides, Obama's stimulus contained over $300 billion in immediate tax cuts to private citizens.  The largest contracts handed out went to private industry.  The overall public sector of the economy has done nothing but shrink under President Obama.  Saying that he bailed out the public sector is almost as bad as people actually believing that he bailed-out the public sector.

There's a lot to hammer the president on about the economy.  Saying he bailed out the public sector is one of the grossest distortions of reality ever spoken, however.

Not to mention the largest contributors to deficits that are adding to the federal debt that Mitt Romney and Republicans are now so concerned about are leftover Bush policies.  But we're not allowed to speak of that because it's all Obama's to fix.

Complain about the state of the economy by all means.  There's plenty wrong with it without having to make up lies.

More Details on Romney's Economic Stimulus Plan

Romney 4th Family Compound Home

Last August, Mitt Romney introduced his economic stimulus plan: A $12 million renovation of his southern California home.  As I reported back then, this stimulus plan would be a much needed boon for the San Diego region, especially for Mexican immigrant labor.

The reason for Romney's renovation was because the home was only 3,000 sq ft. and it was "inadequate for their needs."  Poor guy.  I mean my goodness, the guy only made $400,000 on speaking fees last year.  And as Romney himself says, that's "not very much" money.  The Romney clan needed a 12,000 sq ft. home to accommodate their other 4 houses.  As you can see, the renovation was a total necessity.

Now, today, Politico has a blistering report of the Romney Economic Stimulus Plan.  Reid Epstein writes:

"At Mitt Romney’s proposed California beach house, the cars will have their own separate elevator.

There’s also a planned outdoor shower and a 3,600-square foot basement — a room with more floor space than the existing home’s entire living quarters.

Those are just some of the amenities planned for the massive renovation of the Romneys’ home in the tony La Jolla neighborhood of San Diego, according to plans on file with the city.

A project this ambitious comes with another feature you don’t always find with the typical fixer-upper: its own lobbyist, hired by Romney to push the plan through the approval process.

An elevator for cars?  An outdoor shower?  3,600 square foot basement?  And it's own special lobbyist to consult the project to completion?  Oh my.

It turns out, too, that the hired lobbyist who has been paid thousands in fees already, also donated $1,000 to Romney's presidential campaign.  That's a kickback in every sense of the word.

When Romney says he's not concerned about poor people, it's understandable as to why.

Not Understanding Politics

There's no doubt Mark Thoma is profoundly more intelligent than me.  And it's not that I disagree with his premise that a much larger stimulus package in early 2009 would have helped all of us much sooner and kicked the recession to the curb much more effectively than what we were given.  I agree whole heartily with that.

But...but...the political reality was not there.  Even with a huge majority in the House and 59 seats in the Senate, the political reality was a $787 billion stimulus.  That's nothing to scoff at. Sure it was 1/3 tax cuts, but it was a huge spending bill, second only to TARP to be exact. So why keep hammering the administration for making a mistake for pushing through a smaller stimulus?

The best idea in the world does nothing for a democracy.  It's only as good as what you can get people to agree to.  Would a $1 trillion stimulus made that much more of a difference? Probably not.  Would doubling the size of it?  Yes, I think so.  The point being politics isn't a stage for ideas that work.  It's a stage for everyone getting as much as they can.  And sometimes what someone else wants is the exact opposite of what you want.  If the president could have pushed through a $1.8 trillion stimulus, he would done it.  He knew he couldn't.  He knew the limit of what the public would allow, never mind the benefits.  Never mind how many seats he had.  The politics of it all he was fully aware.

Put it this way.  If Einstein had to put his theory of relativity through Congress, his concept, as genius as it was, would have come out looking much different.  Luckily science is not a democracy.  Luckily, government is.

Say what you will about the math of the stimulus bill.  The politics behind it were pure genius. And that's why Thoma is not a politician.  Those who can, do.  Those who can't, teach.

Stimulating

Only watched part of the speech last night. But I did read the text of it this morning. Much bolder than I thought it would be. More specific than I thought it would be and it also included a mention about refinancing efforts, which I think is huge for mortgage holders to get out from under some debt. The chances of any of it happening are very slim, however. Republicans control the House and they do not want job creation. They want total failure so they can blame it on Obama. They want America in decline and won't be happy until no one has a job.

Don't Mess With Texas, Unless You're a Federal Handout Then They Can't Get Enough

I vividly remember being explained to by a friend that the more conservative states, especially that of Texas, were experiencing a lesser extent of the recession. Mainly, my friend stated numerous times, was because the Red States were utilizing conservative principles to guide their state budgets. Unlike how George W. Bush led the federal government, Republican governors were actually controlling spending while keeping taxes, unemployment and recession symptoms to a minimum.  You see, Bush simply didn't govern like a Republican.

I laughed the whole time my friend was explaining his economic theory to me. We were at a bar so it's not like I could bring up a document on the Internet to prove him wrong. The more I laughed the more he insisted he was right and that Texas was a microcosm for the whole nation.

My friend, of course, was mainly repeating what he was hearing in the MSM and from his hate radio.

Writing in National Review, Rich Lowry called Texas prudent and stable especially compared to the implosion of California, a disastrous model Lowry claimed President Obama wanted to follow.

Right wing hero, Republican economist Arthur Laffer, called Texas a counterexample to liberal economic policies.

Fruity Newty Gingrich, writing on the Bush-era famed website of the American Enterprise Institute, called Texas a "pro-business, anti-waste model that could be replicated across the country."

And Space Alien Man Child, Ross Douthat wrote on the most read op-ed page in America that President Obama should adopt Texas' Red State economic strategy for the rest of the country.

My friend was simply passing on information he had heard from Republican talking heads.  Information that is as inaccurate as saying Iraq had something to do with 9/11-- another favorite talking point by Republicans.

Turns out Texas was the state that depended the most on those very stimulus funds to plug nearly 97% of its shortfall for fiscal 2010, according to the National Conference of State Legislatures.

Texas, which crafts a budget every two years, was facing a $6.6 billion shortfall for its 2010-2011 fiscal years. It plugged nearly all of that deficit with $6.4 billion in Recovery Act money, allowing it to leave its $9.1 billion rainy day fund untouched.

"Stimulus was very helpful in getting them through the last few years," said Brian Sigritz, director of state fiscal studies for the National Association of State Budget Officers, said of Texas.

Even as Perry requested the Recovery Act money, he railed against it. On the very same day he asked for the funds, he set up a petition titled "No Government Bailouts."

I just wonder at what point does publicly decrying federal stimulus money while privately lobbying to get as much of it as you can to fix your state budget become psychotically delusional?

(h/t Jon Chait)

Quickies: Thanksgiving Break Edition

I'm on break so this is all you're getting...

• Former Republican House Majority Leader, Tom DeLay, convicted on all counts.  This should come as a shock to no one.
• Fox News, the beacon of journalistic excellence that it is, runs with a story from The Onion about President Obama without mentioning anywhere in the article that The Onion is a satire site and the story about the president was fake.  
• Republican Senator Jon Kyl slipped $200 million into a bill meant to have nothing to do with Kyl's earmarked funding.  Don't call it an earmark though.  Remember Republicans redefined what an earmark was shortly after promising to ban all earmarks.
• More proof the Obama stimulus package rescued America from the brink of economic disaster.
• This week's Thanksgiving edition of the right wing conspiracy theory in America: Pilgrims came to America to flee the satanic evils of socialism.  [not a link to The Onion either]

It's the Calculator Stupid

My Republican friend writes in to tell me that I can't be serious about plugging in Republican proposals in the deficit calculator(s) and not solve the deficit problem. In his world, the calculators are all biased.

Christopher, you almost hit the nail on the head when you said your liberal deficit calculators are "tricky" and don't let you fully apply GOP ideas. There is no button to repeal Obamacare. There is no button to rescind unspent stimulus money. There is no button to keep the Obama's from traveling on the tax payers dime. Joke all you want, until there's real consideration for Republican plans we'll never have true deficit reduction.

True enough I did lament the fact that the pretend budget calculators wouldn't let me abolish the Department of Education, the Federal Reserve and whatnot.  But those aren't real plans.  There's no chance of any of that happening.  The calculators were designed with actual, substantive, on the table policies in mind.  Tea bagger hard-ons are not based in reality.  I know it's difficult for Republicans to understand all that but going five minutes without Rush Limbaugh and Fox News could really help you cope with the reality-based community.

Furthermore, the Affordable Care Act reduces the deficit.  Repealing it would add to the red ink.  There's less than $300 billion left in the Stimulus.  Repeal it and HCR and you're still left with a $1 trillion deficit in the short term.  Total geniuses.

The Second Stimulus

I don't know if anyone is adding this up or not, but the Obama administration's current economic stimulation proposals sure do look a lot like a second stimulus plan. Take a look:

$50 billion for infrastructure
$100 billion research and development tax credit
$200 billion capital investment deduction
$30 billion fund for small business lending
$18 billion in tax breaks for small businesses
------------
$398 billion in economic stimulus


There's also the idea of extending the Bush tax cuts at least through 2012, which given the economic situation might not be a bad idea though I'm not fully convinced on the need to extend for top earners.

My biggest gripe with this latest round of stimulus is it's still too small. At least in terms of stimulating consumers. The $50 billion for infrastructure is remarkably a low number for what is needed in this country. I personally believe we need something in the realm of $500 billion just to get things moving again. I'm startled to think the Obama administration is serious about $50 billion when they know full well it's way too small.

Last year the State of Illinois passed a $31 billion jobs bill that provided over $14 billion in infrastructure projects.  And it's supposed to be big news the feds want to provide $50 billion for all states?

I suppose if you add in the $100 billion provided for infrastructure in the 2009 Stimulus Plan, the total infrastructure spending would equal about $150 billion.  Still well short of my $500 billion wishful thinking amount.

Obama: $50 bil more for jobs and infrastructure

President Obama, reluctantly I'm sure, unveiled a $50 billion infrastructure plan to try and create jobs over the long-term by rebuilding 150,000 miles of roads, 4,000 miles of rail, and 150 miles of airport runways.

Where was this 19 months ago?

On the other hand, here is our alternative. John Boehner (R-OH): "If we've learned anything from the past 18 months, it's that we can't spend our way to prosperity."

Boner's plan is entirely along the same lines as presidential candidate John McCain in 2008 when he proposed a cross the board spending freeze.   Of course, logically speaking, a spending freeze on everything but defense related is fantasy thinking.  Everyone knows once in office the GOP would do anything but shrink spending.  Not to mention, it's impossible to freeze federal spending, if not retarded during a recession.

There's no doubt the 2009 stimulus package saved America from the brink of a depression.  The data is way too strong to prove otherwise.  What the data also shows is the stimulus was too small.  Nearly half of the $787 billion package was tax cuts.  And I've always argued tax cuts are not stimulus, especially when you provide them in $20 increments like Obama did.  What was needed was $1 trillion spent entirely on stimulus.  We are seeing that now, which means Obama's newly proposed $50 billion plan is yet again way too small and merely campaign rhetoric.  Good job at playing right into the hands of your opposition.

Leading Economists: Stimulus Helped, But Bush Bailouts Helped More

An overlooked item in yesterday's USA Today:

Eighteen months later, the consensus among economists is that the stimulus worked in staving off a rerun of the 1930s. But the spending's impact was dwarfed by other crisis-fighting tools deployed by the Bush and Obama administrations, including costly efforts to stabilize crippled banks and the Fed's unconventional monetary policy.

"I think it was important for confidence. ... But fiscal stimulus was the least important of the three planks of the government's strategy," said Harvard University's Kenneth Rogoff, former chief economist of the International Monetary Fund.

thumbs up means it's not socialism

Seemingly this would be good news for the GOP that greatly opposed Obama's stimulus legislation. That would require Republicans to accept the fact that Bush's socialization of the insurance and lending industries actually happened. That might be too much reality for Republicans to grasp, however. My guess is they will try and say that Bush's policies helped more than Obama's without actually saying what Bush's policies really were. They'll probably try to say Bush's socialized bailout program was actually a fiscally conservative Patriotic approach to rescuing the economy and Obama's was a socialist-tyrannical takeover.

Remember these are the same people that proposed a numberless budget so no delusion is too much.

More Praise for Make-Believe Fiscal Conservatism

Anyone that could not have predicted this needs quick medical attention.

With the glowing Revolutionary! news out yesterday that the Republican Governor of Virginia has a budget surplus heading into the next fiscal year, it was only a matter of time before Republicans started holding it up as an example of patriotic fiscal conservatism.

The WSJ, which is also owned by News Corp, which also owns Fox News, writes that the surplus proves Republican economics works and should be used as a model for every state and the feds.  Nutjob retard, minority leader John Boehner, today briefly mentioned the Virginia surplus in his patriotic economic speech highlighting it also as a model that should be implemented throughout the country and as proof taxes should not be raised.

Yet no mention from the Journal or Boner about the more than $2.5 billion in federal stimulus funds that helped Virginia close the gaps in its budget.  Without the stimulus money there was no way McDonnell and his GOP cohorts would be bragging about creating a surplus.  This is the equivalent of the owners of the New Orleans Saints bragging about winning the Super Bowl without ever mentioning the players.  There is no way they would have won without Drew Brees & Co actually playing in the game.  Just like there is no way Virginia could have a surplus without Obama's stimulus legislation.

It's So Easy Being a Fiscal Conservative When You Get to Pretend!

Republican Bob McDonnell, true fiscal conservative

At the beginning of the last fiscal year, Virginia found itself in familiar territory, a huge $1.8 billion deficit. Like most states, Virginia had to tighten its belt. Republican Governor Bob McDonnell ordered cuts to social services and flagged general fund spending to 2006 levels.  Unlike most states, however, Virginia was able to produce somewhat of a surplus by the end of the fiscal year totaling over $403 million.  The moral of the story, as we all know, is that conservative values were put in place leading the state to bountiful monetary policy.  Gov. McDonnell even went on Fox News to proclaim that his state was a model for the federal government because of his “fiscal prudence and conservative budgeting."  This is great news!!

Just one thing to add:  The Commonwealth of Virginia received $2.5 billion in federal stimulus money to help patch the holes and recover from the recession.

So while Mr. McDonnell went around his state saying the president's stimulus plan was a waste of money and would do nothing to help the economy, even at one point refusing to accept the funds, he took billions of them and used it to balance his budget and create a partial surplus.  You think he would at least acknowledge the role the stimulus funds played at helping his state.  Of course he didn't.  Why would he when he instead gets to pretend that his bona fide fiscal conservatism rescued his state and that the federal government is still suffering from the recession hangover because it is not being run by a Republican.  Why would he own up when it's so easy to pretend none of it ever happened?

*Update:

Minority Leader Mitch McConnell can't figure out when tax cuts became something that should have to be paid for.  In their world, you get to create surpluses with federal stimulus money and cut taxes without paying for them and get to be labeled a fiscal conservative.  It's like paying for gas with your daddy's credit card.  You have no clue the actual costs of anything.  All you know is that when you swipe it, it all gets taken care of.  How dare someone suggest to Mitch McConnell that it has to be paid for.

Tax Refunds Are Up

According to the IRS, tax refunds have jumped about 10% from last year thanks in large part to President Obama's stimulus package.

Through March 12, the average tax refund was a record $3,036, up $266 from the same period a year earlier, Shulman said in a statement.

"The Recovery Act is a major factor behind these larger, record refunds," Shulman said. "About half of all Americans haven't filed their taxes yet, so we urge them to look carefully at these Recovery provisions." Some 69 million individual tax returns were filed through March 13, according to the IRS.

The Recovery Act provided a tax credit of $400 for workers, or $800 for married couples. Most workers who have taxes withheld from their paychecks received the credit through an adjustment in their withholding. But those who didn't receive the full credit through withholding will receive the balance in their refunds.

Since $266 isn't a large amount of money, many people don't notice the difference. This also leads people to forget President Obama cut taxes for 95% of Americans. The $787 billion stimulus package contained $288 billion in tax cuts. That's where the extra $266 is coming from.

I don't think any of us would argue that George Bush also cut taxes. When he did, people who qualified received rebate checks in the mail. Whereas Obama's tax cuts simply added about $20 to your paycheck. Mailing people an actual check from the Treasury is a great way to visually remind people that you have cut taxes. Lowering payroll taxes is another way, just much less noticeable and easily forgotten.

Stimulus Is Working

The graphs to the left demonstrate the economic stimulus package ushered in by President Obama has had some positive effects on the country. GDP is recovering, unemployment is slowly shrinking and on the verge of creating jobs, and the stock market has rebounded nicely.

None of this means we are out of the recession. It's shaky ground at best. But all data suggests the stimulus has worked. Via this Times article, it's worked better than anyone is willing to say.

*Update:

After a rough email from a friend whose opinion I do heavily consider, I want to clarify a few things.

Reader JL:

Chris, how's it working? We were told unemployment would be lower by this time. We were told, GDP would be higher. We were told green tech would be flowing. We were told super trains would be built all over the country. We were told broadband would be comparable to South Korea. And so far all I'm seeing are "grants" to people who mostly don't qualify. The only real construction projects are interstate jobs that states failed to fund because they are all still broke. Actually the construction projects are old projects some from as far back as 2001. Where's the new America we were promised? All the stimulus has done is add to the national debt billions. Job creation is abysmal. The entire stimulus is, the only part stimulating anything, is patch work on interstates. We have pot holes being filled dude. That's it. Where are these big projects that will rescue us all?

JL is a house staffer. And a friend. He's got a point too. I absolutely think the stimulus should have been bigger. It should have been about $1.5 trillion. No one had the balls to do that, however. But the stimulus has been very effective at rescuing the economy from the brink of total disaster. It was in free fall. It no longer is.

Let's consider the choices we were faced with in January 2009. The president's $787 billion stimulus, which has without a doubt saved us pot holes or not. Or the Republican's spending freeze, which would have been the final straw for what would have ushered in another Great Depression. Or do nothing, which is tantamount to a spending freeze. Standing up to Republican obstructionism and do-nothingism was the right thing to do. We are better off today for not listening to the people who got us in this mess in the first place. There's no need to listen to them now either.

A Note of Clarity

It seems the Obama administration's efforts, which have been less than stellar, to make stimulus spending open and transparent to tax payers is getting some heat from all sides including me. I wanted to clarify my disgruntlement if only slightly, however. Recovery.gov, the site used to monitor stimulus spending has, since its conception, been found to contain errors. I don't think it's intentional nor do I think it's some great conspiracy to hide the truth. I do think a majority of the errors are typos and problems with the end user entering the data, as the AP Fact Check demonstrates. These are definite problems no doubt. They should be corrected as soon as possible. Some of the errors, like non existent districts, look silly and can be corrected very quickly. There's no reason small things like that should be left on the site for the media and everyone to criticize. Monitor the information and fix it. It's that easy.

Apparently, Republicans are using ABC News' story (which I still think is excellent and I'm glad they did it) to invent conspiracy theories that Obama is listing "phantom districts" on recovery.gov in hopes to pull the wool over everyone. Republicans are saying Obama is spending stimulus money in districts that don't even exist, and thus spending money irresponsibly. There's no doubt Republicans know a thing or three about irresponsible spending, but these are typos and data entry errors not actual misplaced money.

Just for the record, I'm not on the side of falling off the cliff by cheering on "phantom districts." I just think the administration has to do a better job of keeping track of the data. They have to, there's no wiggle room on this.

Anything But Open and Transparent

ABC News did an excellent job the other day of reporting the failure of the Obama administration to keep up with its rhetoric on the American Reinvestment and Recovery Act, more precisely its use of recovery.gov and its many errors and untruths.

ABC News was able to locate several examples on the government's Web site outlining hundreds of millions of dollars spent and jobs created in Congressional districts that have been misidentified.

For example, recovery.gov says $34 million in stimulus money has been spent in Arizona's 86th congressional district in a project for the Navajo Housing authority, which is actually located in the 1st congressional district.

The whole site is filled with errors as ABC reports. There is no excuse for such incompetence by Team Obama. These are exactly the stories that need to be pointed out and exactly the stories the media was created to cover. If you can't run a website...

*Update:

Associated Press fact checks the phantom district claims.

Don't Dare Hold Them To Their Own Words

Big Bad super tough talking Republicans love the federal stimulus package. I know, I know, that is directly opposite of what they say in public in regards to federal spending or fiscal conservatism. One grand example of a Republican who loves to talk sexy about federal money and how he's a conservative is Texas Governor Rick Perry. Now a few months ago Perry was so against the stimulus package, so against any of that money coming to his state that he floated the idea of seceding from the Union in order to stop the federal expenditures. Drastic measure I know. But when you are against federal stimulus spending as much as Republicans are, destroying the nation is really only a small step to demonstrate just how "conservative" you really are.

Just like other Republicans, in reality Perry is actually all for stimulus spending. In the last couple of months, Perry has doled out about $100 million in law enforcement grants, mostly to agencies of his choosing. The money, of course, comes from President Obama's stimulus spending but Gov. Perry wouldn't dare let anyone know that. In his Fantasy World, every penny comes straight from him. Perry isn't alone in any of this either. Louisiana Governor Bobby Jindal loves him some federal money too. The only thing they like more than federal money is going on teevee talking about how much they hate federal stimulus spending and popping boners about seceding from the Union.

WSJ: Stimulus Is Working

The day after Republican Representative Eric Cantor said we should cancel the rest of the stimulus funds, the Wall St. Journal runs a story clearly stating stimulus spending is helping the U.S. economy climb out of its worse recession since the Great Depression.

I'm not trying to give off the wrong impression on this at all. The economy is slowly turning around. Things are not where they need to be but they are getting better. It will take time, sometimes more time than we have patience for. The Dow is up roughly 10% since Obama took office. Unemployment is finally starting to languish. The manufacturing sector grew in August for the first time in almost two years. Consumer spending is up. Consumer confidence soared at its fastest rate in years. Turn around is upon us. People going around saying we should cancel the rest of the stimulus, freeze spending and calling efforts at reform a failure, are defeatists. Eight months ago they would have been called anti-American. I won't dare go that route, but they are doing this country no favors at all.

Repubs Won't Block Clunker Extension

Of course they won't. Their nonsense that it's been so successful that it must be stopped is par for their course. Is it even possible to argue that something is too good to continue? Not to mention their total garbage about how they are worried about costs is a total lie. Take the money out of Bush's TARP. Or take it out of the stimulus. The money is there. But the main reason Republicans won't block the program is because they are the minority. They couldn't block if they wanted to.

Rubber Meets the Road

The Super Tough Macho Republicans, as we know, are totally against President Obama's stimulus spending he signed into law a little over 5 months ago. They've called it everything from failure, to socialism to fascism and the always on the tip of their tongues "fiscally irresponsible." For a while a few Republican governors were grandstanding that they were not going to accept the funding. Super Moral Crusaders like Mark Sanford, Bobby Jindal and Sarah Palin to name a few played it out as long as they could but eventually caved.

So what do Republicans do when that stimulus money actually hits their constituents and starts having some positive effects? They grandstand around their districts and pretend that it's all because of them.

• Republican Governor Bobby Jindal traveled to Anacoco, Louisiana to present a jumbo-sized check to residents of Vernon Parish. He even had his very own name printed on the check to give off the appearance the money was coming from him. Way to go you Warrior Tough Guy!

• Though Republican Congressman Mike Pence didn't personally take credit for the stimulus funds in his state (at least not yet he hasn't) the Evansville Courier reports more than 2,400 people are now at work on stimulus construction projects all across Indiana with hopes of more on the way. Pence is known for his publicly harsh criticisms of the stimulus.
  

In a response to Greg Sargent at The Plum Line, Pence's office chose to focus on his new found avocation of "fiscal responsibility in Washington" instead of addressing the stimulus directly. This from a guy who voted lockstep with George W. Bush. Somehow fiscal responsibility doesn't come to mind when actually looking at Pence's record.

Maybe it's just me but wouldn't someone who truly opposed these funds not go around handing out giant sized checks and smiling on teevee?