Congressional Budget Office Concludes That Obama’s “Stimulus” Would Actually Hurt The Economy

Oh, and the best thing for the government to do in the current economic melt down is to do nothing.

President Obama’s economic recovery package will actually hurt the economy more in the long run than if he were to do nothing, the nonpartisan Congressional Budget Office said Wednesday.
CBO, the official scorekeepers for legislation, said the House and Senate bills will help in the short term but result in so much government debt that within a few years they would crowd out private investment, actually leading to a lower Gross Domestic Product over the next 10 years than if the government had done nothing.
CBO estimates that by 2019 the Senate legislation would reduce GDP by 0.1 percent to 0.3 percent on net. [The House bill] would have similar long-run effects, CBO said in a letter to Sen. Judd Gregg, New Hampshire Republican, who was tapped by Mr. Obama on Tuesday to be Commerce Secretary.

I don’t necessarily buy into the “do nothing” solution. There are things Congress and the President could do to help the economy. Lowering tax burdens so that individuals and businesses can keep more of their own money would help significantly. Lowering regulatory burdens would decrease the cost and difficulty of creating more jobs and prosperity. Even just simplifying the tax code would go a long way toward easing some of the heavy compliance costs many individuals and businesses struggle with.
So there are things our political leaders could do to help with the economic down turn. But given that our nation’s current liberal leadership isn’t likely to do these things, “do nothing” is probably the best we can hope for.

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  • http://Array Matt

    $1,000,000,000,000 spent in a short time interval will trigger off runaway inflation !!!!

    Istria

  • Brent

    I foresee some people in the CBO “resigning” in the near future.

  • http://sayanythingblog.com/entry/america_is_back/#c397018 DINO

    We tried that and the results weren’t good. Do you people ever learn?

    A far better solution would be to pass the stimulus and make sure that no republicans or conservatives get a penny of it. Unless we invest in re-education camps for those sore-loser obstructionists.

  • carrick

    Dino:

    That story does not exist in the legitimate press.

    LAWL.

    Dino’s definition of “legitimate press” apparently is Obama’s website and new organizations that simply parrot it.

    By that standard, the WaPo isn’t legimate either:

    Stimulus Projects May Be Slow, CBO Says

  • Dino

    That story does not exist in the legitimate press.

    The stories I found predicted the stimulus would work.

    Typical con lying.

  • jk

    All cons are doing is drawing attention to what walking shitstains they are.

    That’s funny coming from a TURD.

  • LJ

    Just read on MSNBC that Obama’s spending bill will create or save 3 million jobs. Makes sense to me spend 800 billion dollars to save 3 million jobs. Isn’t that something like 267 million dollars per job. Obama is like my ex. She thought she could spend her way out of being broke and I am stll paying for that experiment. We will all be paying for Obama’s experiment for the rest of our lives. The Dem’s bitch about Bush spending 600 billion in Iraq but are drooling over spending 800 plus billion on top of the 850 billion that they spent late last year. I bet Bush is just sitting back smiling knowing that when Obama leaves office even Jimmy Carter will look like a great President compared to The Great One, Obama.

  • carrick

    Dino, nice job of bloviating, but even your own sources put to the lie your original claim

    That story does not exist in the legitimate press.

    You go on to say

    is old and has been discredited

    Once again you lie.

    It was a preliminary report, that was made clear by the WaPo article. It wasn’t discredited. It simply has been supplemented with additional analysis since then.

    All Dino has is to cling desperately to half truths that he hopes nobody will vet. Tough for me we’re smarter than he is, and much less lazy. I have never objected to doing my homework.

  • sayanything-4625

    The stories I found predicted the stimulus would work.

    I only believe stories that confirm my bias! Typical lefty!

  • http://ndgoon.blogspot.com/ goon

    But the CBO analysis appears to confirm the complaints of many Republicans and other critics, who have long argued that spending money on highway construction and other infrastructure projects is ineffective at quickly jolting a sluggish economy

    All we are going to have is a nice new road that no one can afford to drive on thanks to the dems driving the economy into the ground further.

  • carrick
  • http://ndgoon.blogspot.com/ goon

    good points Welder.

  • GrecRI

    About the kind of accuracy we can expect from someone who thinks Fannie & Freddie caused the meltdown.

    And I suppose you don’t think Fannie & Freddie had anything to do with the banking problem? Or the pressuring of banks to make loans they wouldn’t otherwise make; and telling them that the government will back them up?

  • Dino

    The truth is that the CBO report you stems are clinging to was never a real report to begin with.

    Subsequent REAL CBO analyses show that the stimulus money enters the economy quickly and provides many jobs. The only detrimental effect is PERHAPS 10 years down the road, and even then the effect on GDP is minimal.

    All cons are doing is drawing attention to what walking shitstains they are.

    I think that if I had caused the meltdown of my country I’d not draw attention to myself.

  • carrick

    From the WaPo:

    A report by the Congressional Budget Office found that only about $136 billion of the $355 billion that House leaders want to allocate to infrastructure and other so-called discretionary programs would be spent by Oct. 1, 2010. The rest would come in future years, long after the CBO and other economists predict the recession will have ended.

    &heellip;

    But the CBO analysis appears to confirm the complaints of many Republicans and other critics, who have long argued that spending money on highway construction and other infrastructure projects is ineffective at quickly jolting a sluggish economy

  • Bat One

    Traditionally, the Head of CBO is appointed by the Speaker of the House, as Peter Orzag was when Pelosi took the helm (sort of!) in January 2007.

    It shouldn’t be much longer before some of us are likely to conclude that Ronald Reagan got more support from a Democrat Congress than Obama is getting from these bozos of his own party.

  • http://sayanythingblog.com/entry/america_is_back/#c397018 DINO

    Hey Carrick, the WaPo article you quote, the one cons are holding onto like grim death, is old and has been discredited. It was based on a leaked CBO draft.

    CBO’s Non-Estimates of Stimulus Spending Rates

    It turns out that the media reports of spending rates from the Congressional stimulus package were taken from a preliminary CBO analysis of a bill that has since been altered. While opponents of the stimulus package have touted these estimates to claim that the stimulus will have little effect in the next two years, CBO produced nothing that can support this claim.

    About the kind of accuracy we can expect from someone who thinks Fannie & Freddie caused the meltdown.

    Here, try this one from US News & World Report. It’s two weeks NEWER than the WaPo story:

    CBO: Stimulus Bill Could Meet Obama’s Job Creation Goal in Short Term

    In an analysis of the $900 billion version of the stimulus bill currently being debated in the Senate, the nonpartisan Congressional Budget Office says that the bill could meet President Obama’s goals for job creation and increase GDP–at least in the short term.

    But by the end of 2011, the total number of jobs created would be half of what it was in 2010. And by 2019, the bill could actually reduce GDP, although by only 0.1 to 0.3 percent.

    Here’s an opinion on that small decline in GDP:

    First, a 0.1-0.3 percent net decline in GDP ten years from now is a pretty wild shot in the dark. Economists don’t have that great a track record at predicting GDP numbers for the next quarter, much less that far out. More to the point, it’s a minuscule amount. Just in the last fiscal quarter of 2008, a buildup in unsold inventory was responsible for a larger percentage of GDP growth.

    Second, there is a clear short term burst in output and job creation — the CBO’s most optimistic forecast suggests the potential of 3.6 percent GDP growth and 3.9 million new jobs by the fourth quarter of 2010. If the primary goal is to reduce the pain caused by a contracting economy right now with only a very minor decline in output over the long term as a result, then you can make the case that it’s a good deal.

  • http://sayanythingblog.com/readers/author/realitybasedbob/ realitybasedbob

    CBO said there is no crowding out in the short term, so the plan would succeed in boosting growth in 2009 and 2010.

    The agency projected the Senate bill would produce between 1.4 percent and 4.1 percent higher growth in 2009 than if there was no action. For 2010, the plan would boost growth by 1.2 percent to 3.6 percent.

    CBO did project the bill would create jobs, though by 2011 the effects would be minuscule.

  • http://www.willisms.com/ Zsa Zsa

    Basically, the so called stimulus plan is about 1 part stimulus and the rest pork. It is flat out nothing more than a stimulus for Socialism. Twelve zeros are a lot of zeros!

  • NoJelly

    This stimulus bill will, by historical accounts, be touted as a “common, honest mistake”.

  • carrick

    Goon that’s hardly the only reason we won’t be able to drive on it.

    They refuse to drill domestically, so we can expect gas prices to continue to spiral to infinity and beyond.

    They keep adding emissions regulations to new cars, so the cost of the car will spiral out of control as well.

    It’s the tripartite system…

  • carrick

    All of these studies are based on the Russian Roulette principle that we don’t trigger off runaway inflation.

    $1,000,000,000,000 spent in a short time interval may well just do that.

  • Bat One

    Brent,

    Dey gonna need a bigger bus with all dem bodies unnerneath.

  • welder4

    We’re never going to recover if we don’t get the $50 million for the National Endowment For the Arts, we may never recover if we don’t get $380 million in the Senate bill for the Women, Infants and Children’s program, we may never recover if we don’t get $300 million for grants to combat violence against women, we may never recover if we don’t have $6 billion for university building projects, we may never recover if we don’t have $1.2 billion to provide youth summer jobs, and this bill defines “Youth” to people up to the age of 24. You’ll be paying for those. We will never recover if we don’t have $2.4 billion for neighborhood stabilization activities. We may never recover if we don’t have $650 million for digital TV coupons. We may never recover if we don’t get $150 million for the Smithsonian. We may never recover if we don’t have $34 million to renovate the Department of Commerce headquarters. We may never recover if we don’t have $500 million for the improvement projects for the national institute of health facilities. We may never recover if we don’t have $44 million for repairs to the Department of Agriculture headquarters or $350 million for agriculture department computers. We may never recover if we don’t have $88 million to help move the Public Health Service into a new building, not for a new building. To help them move to a new building. We may never survive if we don’t have that $88 million for a moving truck! We may never survive if we don’t have the money to convert federal auto fleets to hybrids. This country may never recover if we don’t have a billion dollars for the census bureau. We may never recover if we don’t have $89 billion for Medicaid or $30 billion for COBRA extensions or $36 billion for expanded unemployment or $20 billion for more food stamps. We may never recover if we don’t have $850 million for Amtrak, a train that hasn’t turned a profit in 50 years. America as we know it may never recover if we don’t have $87 million for a polar ice breaking ship, never recover. Let’s not look too deeply into why we would need a polar ice breaking ship if the poles are melting and won’t have any ice! We may never recover if we don’t have $1.7 million for the national park system or $55 million for the historic preservation fund. We may not survive if we don’t have $7.6 million for the rural advancement program or $150 million for the agriculture commodity purposes or $150 million for producers of livestock, farm-raised fish and honeybees. We may never survive. We may never recover unless we have $160 million for paid volunteers at the Corporation for National and Community Service for the community volunteers, the National — wait a minute. Why are we paying the volunteers?

    Look, we may never survive if we don’t get serious about renewable energy. Our planet has a temperature. It’s very sick. We have to do everything we can. For instance, would be ridiculous for, you know, me, the president, to take Air Force one out on its maiden flight, to take a 747 jumbo jet from Washington D.C. for an out-and-back excursion to the House Democratic caucus retreat at the Kings Mill Resort and Spa in Williamsburg, Virginia, where the 747 is parked in Virginia. It would be crazy to take a 157-mile trip in a 747 jumbo jet when you’ve got teleconferencing there in the White House, because the Earth has a temperature and that’s why America may not ever recover if we don’t act now and pass $2 billion for renewable energy research or $2 billion for clean coal power plants in Illinois or $6.2 billion for a weatherization assistance program which basically is weatherstrips for underneath your door! We may never survive if we don’t have $3.5 billion for energy efficiency and conservation block grants or $3.4 billion for the state energy program or $200 million for state and local electric transport projects or $300 million for the energy-efficient appliance rebate program or $400 million for hybrid cars for state and local governments or $1 billion for the manufacturing of advanced batteries or $1.5 billion for green technology, loan guarantees or $8 billion for innovative loan guarantee program or $2.4 billion for carbon capture demonstration projects or $4.5 billion for the electricity grid or $79 billion for the state fiscal stabilization fund. We may never recover if we don’t do these things right now. Don’t think. Do it now! Or we may never recover. Is anyone insulted?

    this is off the Glenn Beck show or web site ,read it and weep .

  • axxkicker

    i personally, would like to welcome the Congressional Budget Office to the actual world, and would kindly ask what they might have been doing the past 8 years?

    playing uno, perhaps?

  • http://unreligiousright.blogspot.com/ UNRR

    This post has been linked for the HOT5 Daily 2/6/2009, at The Unreligious Right

  • Mickey

    PORK, PORK, PORK. Don’t punish the past by damaging the future.

    A real stimulus is easy and we would not have to borrow from our future. It’s simple, Cut ALL waste spending in government and cut ALL taxes in half for TWO YEARS. Do this and the country will prosper, income will prosper, the deficit will be cut in half and everyone wins. Everyone, even lazy libs.

  • sayanything-2483

    Like the mentally ill liberal socialist he is, if he believes it, it must be true.
    Is he on drugs?

    A far better solution would be to pass the stimulus and make sure that no republicans or conservatives get a penny of it. Unless we invest in re-education camps for those sore-loser obstructionists.

    And enjoys being a Nazi too!!

  • sayanything-2483

    I think that if I had caused the meltdown of my country I’d not draw attention to myself.
    Dino on February 6, 2009 at 03:52 pm

    And how bad did you have it over the last 8 years?

  • http://sayanythingblog.com robport

    Obama is like my ex. She thought she could spend her way out of being broke and I am stll paying for that experiment.

    LMAO

  • http://intensedebate.com/people/romeromi3 romeromi3

    I don't think so obama will come up with some new idea that would definitely raise the economy…as he have done so many things for the US people…

    body massage

  • http://croatiaistria.com/ Istria

    I don’t like the way, Obama administration is working on the economy problem!

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