President Obama is doing his best to ratchet up the pressure on Congress to pass the American Jobs Act. But if history repeats itself, the ones getting “jobbed” will be American taxpayers.
The facts speak for themselves. According to the Congressional Budget Office (CBO), the president’s first stimulus package — signed into law in February 2009 and carrying a price tag of $821 billion — may have saved or created an estimated 1.4 million jobs nationwide. That sounds pretty impressive until you do a cost-benefit analysis. In this case, CBO says each of those jobs cost taxpayers an astonishing $586,428.
Need more proof? Then consider this: At the time the stimulus was enacted, Mark Zandi, chief economist at Moody’s Analytics — and now an outspoken cheerleader for the American Jobs Act — predicted that “with the stimulus, there will be 4 million more jobs and the jobless rate will be more than 2 percentage points lower by the end of 2010 than without any fiscal stimulus.” At the time, unemployment nationwide was 8.2 percent. Today it stands at 9.1 percent with 14 million Americans struggling to find work.
But one of the biggest red flags can be found in my home state of California, where Solyndra went belly up after squandering a $535 million federal loan. Less than six weeks after assuring Congress that its finances were improving, the company laid off more than 1,000 workers, declared bankruptcy and was raided by the FBI as part of an ongoing fraud investigation.
Unfortunately, this is what often happens when there’s a rush to pump huge amounts of federal money into the economy: corners are cut, mistakes are made, and taxpayers are left holding the bag.
Today, instead of learning from these mistakes, the president is asking Congress to approve a second massive stimulus — this one costing taxpayers $447 billion, with Zandi now saying it will “cut the unemployment rate by a full percentage point.” Sorry, but we’ve heard that story before.
Shovel-ready jobs, as the president puts it, are elusive. Before any infrastructure improvements can actually begin, there’s a long list of potential delays, including engineering and design, environmental reviews, permitting, public hearings, and land acquisition.
Ten months into the first wave of stimulus projects, the Associated Press conducted a nationwide analysis and found that “a surge in spending on roads and bridges has had no effect on local unemployment and only barely helped the beleaguered construction industry.” And yet, here we go again.
Albert Einstein once said the definition of insanity is doing the same thing over and over and expecting different results. President Obama spent $821 billion on his first stimulus plan — that’s 20 times more than the federal government spends each year on highway construction — and America’s unemployment rate still went up. How is spending $447 billion more going to be any different? It won’t.
When the president unveiled his new plan before Congress, I listened attentively and truly hoped that he would offer a serious plan to tackle the biggest problems facing America today. Instead, he gave us more of the same old, same old.
Simply put, this administration’s failed “pay now, suffer later” fiscal policies are driving our economy into the ground. President Obama has three simple solutions for every problem facing America — spend, spend, and spend. Wrong. The best way to jumpstart our economy is to cut. That’s what American families do when times are tough. That’s what the federal government should be doing, too.
Since President Obama took office, we have lost nearly 2.5 million American jobs, and we have had 30 straight months of unemployment at 8 percent or higher — the longest such stretch since the Great Depression. When you look at how many people are out of work today, it is equivalent to the entire population of Illinois.
So, Mr. President, please resist that urge. Spending more money recklessly, as in the case of Solyndra — and going deeper and deeper into debt as a nation — surely isn’t the answer. Within 25 years, interest on the U.S. debt, as well as entitlement spending on Social Security, Medicare, and Medicaid, will surpass all federal revenues, threatening to bury our once-vibrant economy.
Instead, Mr. President, let’s work together to free American innovation and ingenuity — long-held hostage by a regulatory regime which is as great a threat to our future prosperity as any foreign regime.
Today, American businesses are holding tight onto more than $1.8 trillion in cash reserves. Let’s give them a reason to invest that money in America’s future by reforming a hard-to-understand U.S. Tax Code and our oppressive Code of Federal Regulations — now 150,000 pages long.
Let’s do a better job of protecting intellectual property. Let’s also ramp up domestic energy production. And let’s put an end to runaway federal spending before it is too late to recover.
If we don’t do these things to help our economy, Mr. President, and soon — then be sure to keep those shovels close by. We’re going to need them.
Rep. Mary Bono Mack (R-CA) is the chair of the House Subcommittee on Commerce, Manufacturing and Trade.