A few days ago I linked to a report that calculated the actual Keynesian “spending multiplier” associated with the Obama stimulus plan to be very close to 1 (no growth) or less than 1 (negative growth). I also noted that the lion’s share of the stimulus money was granted to the states in order to offset tax revenue shortfalls, and not to efforts that would actually spur the economy.
Powerline Blog just published a summary of yet another recent analysis of the American Reinvestment and Recovery Act which indicates — get ready for it — that government jobs made up the vast majority of those “created or saved”:
Our benchmark results suggest that the ARRA created/saved approximately
450 thousand state and local government jobs and destroyed/forestalled
roughly one million private sector jobs. State and local government jobs
were saved because ARRA funds were largely used to offset state revenue
shortfalls and Medicaid increases rather than boost private sector
employment. The majority of destroyed/forestalled jobs were in growth
industries including health, education, professional and business
Naturally, in the minds of government bureaucrats, such a result would be praised as a stunning success.
Taken together, these two studies perfectly illustrate the true weakness of Keynesian economic theory, which is the propensity of bureaucrats and politicians to use government largess to reward or bribe loyal constituencies and increase the scope of their own power, rather than designing a stimulus that actually puts money in the pockets of private enterprise and its employees. Like Marx, Keynes failed to understand the realities of human nature, and how those traits could potentially undermine his textbook-perfect economic theories.
It should now be clear that most of Obama’s stimulus dollars were used to ensure the “bought and paid for” status of Democrat special interest groups. If the Republicans don’t take these facts and vigorously hammer the Obama Administration with them during the upcoming election, then they will have deserved not to win.