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Caracas on the Potomac

Welcome to the Banana States of America.

by
Stephen Green

Bio

May 15, 2009 - 12:00 am
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The numbers would be bleak if they weren’t so scary. A budget deficit four times bigger than last year’s record red ink. One year’s debt equal to 13% of GDP. A record $3,550,000,000,000 budget. And 46% of that spending will be “paid” for by new borrowing.

But wait — there’s less!

There have been 5.7 million jobs lost since December. A lousy Treasury bond auction last week signals slower growth and higher inflation. And retail sales just dropped for the second straight month.

But don’t fret, dear reader — the stimulus has arrived. Or has it? Really, how stimulating is President Obama’s big package? Not very. Even the New York Times reports that “the stimulus bill has directly injected around $45.6 billion into the economy.” That’s as stimulating as a Merchant-Ivory reboot of Indiana Jones.

To keep the math easy, let’s round those dollars up to $50 billion. Then we’ll round the size of the U.S. economy down to $12 trillion. So the stimulus has, thus far, provided a jolt to the economy equal to 0.004% of GDP. That’s four tenths* of a single percent. Feeling stimulated yet?

Look at it another way. Assume 200 working days a year, of eight hours each. That’s about $60 billion each work day produced by the U.S. economy. So Washington has stimulated the economy to the tune of not-quite seven hours of work from each American with a job. If the president had just asked everybody to go in to work one Saturday, we could have added the same amount to our current GDP — all without borrowing it from our kids.

Oh — and I almost forgot to mention that the president’s economists agree that the worst of the recession is over. They expect growth to resume in the second half of the year, which, by my rough calculations, begins on July 1. Now might also be a good time to mention that most of the “stimulus” spending has been social service spending support to the 50 states. In other words, welfare payments the states would have made, regardless. So, really, if we’d have all just worked a little late a couple of days last week, we could have slept in on Saturday.

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