Stimulating economic recovery. Now there’s a misnomer.
Remember that Bush stimulus early last year? It did nothing.
Obama went down that same path, albeit in a far pricier way, with essentially the same result. We’re still in recession with unemployment continuing its climb.
Because it didn’t work the first two times, there’s talk of yet another stimulus. Political logic…
Of course, somebody has to pay for all this government debt. The massive sale of additional bonds required to fund the debt appears to be diverting funds that might otherwise be invested in the launch or expansion of businesses – that create jobs. Club for Growth’s Louis Woodhill paints the picture:
Q4 2008: Federal deficit - $303 billion
Business investment same period fell by almost 22%
Q1 2009: Federal deficit - $650 billion
Business investment same period fell by 37.3%
Employment and private business investment are directly correlated. Keep an eye on the Bureau of Economic Analysis measurement of real nonresidential fixed investment. If that number keeps declining, it doesn’t bode well for the jobs outlook.
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