“Time to Admit Obamanomics Has Failed” is the title of a Washington Examiner editorial from Sunday that brings out in stark relief the monumental failure of the $1 trillion stimulus bill to stimulate anything except the greed glands in Democratic constituencies like labor unions and government workers.
The money graf:
The economy is stalling, unemployment seems stuck at European levels of idleness, the federal deficit and the national debt are at historic highs, public confidence in Congress is at its lowest-ever level and big majorities of Mainstream Americans say Obama has the country on the wrong path. Obamanomics has failed miserably and it’s time for everybody in this town to admit it so we can move on.
That’s only the half of it. Add on the following from the Troubled Asset Relief Program (TARP) and you begin to get the complete picture of how much this government has spent to “rescue” the economy and how little good it has done.
* $85 billion to prop up GM and Chrysler, as well as auto suppliers. GM is still “Government Motors” despite crowing about “repaying” the government loan that kept them afloat. Not only was the $6.7 billion GM gave back to the government only about $42 billion short of what they owed, they had the temerity to use part of the bailout money to do it. GM claims a healthy profit this past quarter, but taxpayers — who still own about 70% of the preferred stock in the company — shouldn’t be checking their mailboxes for dividend checks. This gift to the UAW has spawned the next adjective to describe product failure: the Chevy Volt.
* $70 billion for consumer and business lending initiatives. This was a program designed to jumpstart business and consumer lending. As with every other program that was supposed to shock the economy back to life, it has failed miserably.
* $75 billion to help those with mortgages that were underwater to stay in their houses. A recent study shows that the centerpiece of those efforts — the Home Affordable Modification Program (HAMP) — has a miserable success rate of 32%. That means that “about a third of the trial mortgage mods begun will be successfully converted to permanent ones, and won’t redefault.” Granted, if it were you or I who was helped by the program, we would declare the effort a success. But a redefault rate of 2/3, if looked at rationally, has to be considered an abject failure.
All of the above came out of the $700 billion TARP program signed by President Bush. Of course, no one who voted for the bill could have imagined the monies being used to bail out GM, throw money at lendees drowning in bad mortgages, or jumpstart the commercial and consumer loan industries. The bill may have originated with Bush — a desperate attempt, we were told, to buy up toxic paper from banks in order to stave off economic calamity. But Obama made this program his own, eschewing its original intent by vastly expanding the reach and power of the federal government, taking it into areas of the economy it had never ventured before. TARP’s failures are Obama’s failures.
And what of the hundreds of billions of taxpayer monies used to bail out banks? Much of that money didn’t go to eliminate the problem that caused the meltdown in the first place. Some estimates place the amount in toxic assets held by banks — still hovering in the background despite massive efforts to hide, write down, or otherwise resolve the value of these worthless securities and derivatives — at several trillion dollars face value. If another meltdown were to occur — a possibility not out of the question — we’d be back at square one with the big banks, risking depression and a blowup of the Western industrialized world’s financial system unless taxpayers repeated the agony of massive bailouts.